A new radio ad from Pennsylvania Gov. Tom Corbett boasts that he “created 150,000 new private sector jobs,” a feat called “remarkable” in a Web ad on his campaign website. Not really. Pennsylvania ranks 46th out of 50 states in the rate of private sector job growth during the three years Corbett has been in office. In fact, the growth rate is less than half the national average.
Corbett makes the jobs claim in a series of statewide radio ads that take shots at several of his Democratic challengers.
One ad asks voters to compare Corbett’s qualifications with those of some of the leaders in the Democratic field, and touts that Corbett “created 150,000 new private sector jobs.”
Corbett radio ad: Finally, Tom Corbett. He’s saved us over a billion in taxes, reduced the size of state government to its lowest in 50 years, eliminated $43 million in state cars and created 150,000 new private sector jobs. Game. Set. Match.
In another ad, Corbett himself repeats the claim about private job growth, and credits his policies of holding the line on state income taxes and reducing small-business taxes.
Corbett in radio ad: I’ve kept my promise not to raise your income taxes even one cent and to cut taxes on small businesses. That’s resulted in Pennsylvania today having over 140,000 more private sector jobs than the day I took office.
According to the Bureau of Labor Statistics, Pennsylvania has added a net 138,300 private sector jobs between January 2011, when Corbett took office, and December 2013, the latest figures available. The December figures are projected, and Corbett’s office said it looked at the numbers from January 2011 to November 2013, which show a net gain of 151,100 private sector jobs.
Corbett’s comments focus on private sector job growth. During his time in office, the number of government jobs has declined by a net 42,000 (most from local government jobs). When looking at all jobs, including government jobs, Pennsylvania has gained 96,300 total jobs under Corbett – a 1.7 percent job growth over three years, ranking the state 46th in total job growth among the states.
Corbett’s numbers on private sector job growth are accurate, or pretty close if using December figures. But a much different picture emerges when the job growth is put into a national context.
Although a Web ad on the campaign website describes the private sector job gains as “remarkable,” Pennsylvania’s rate of private sector job growth during Corbett’s governorship was 2.8 percent. That ranks 46th out of 50 states. In fact, Pennsylvania’s 2.8 percent increase is less than half the national average of 5.8 percent during that period. In other words, private sector job growth in Pennsylvania is not so “remarkable” when compared with the performance of most other states around the country (see the chart below).
Gary Burtless, a former economist at the U.S. Department of Labor who is now at the Brookings Institution, told us via email that it’s more meaningful to compare a state’s performance with that of others in its region. In Pennsylvania’s case, he said, it might be helpful to see how it fared compared with neighboring states like New York, New Jersey, Ohio, Maryland and West Virginia. The rate of Pennsylvania’s private sector job growth lagged behind all of those states, again using the January 2011 through December 2013 figures from BLS.
The Corbett campaign argues that Pennsylvania didn’t fall as hard as most other states in the recession, so its recovery doesn’t look as pronounced as in states that did. And there’s something to that argument. According to BLS data, Pennsylvania lost 246,100 jobs during the recession – from when it started in December 2007 to when the national employment numbers bottomed out in February 2010. That was a loss of 4.2 percent, which was below the national average of 6.3 percent. The U.S. during that time lost nearly 8.7 million jobs. So, Pennsylvania’s rate of job loss was not as great as the nation, on average. Pennsylvania ranked 12th in terms of job losses.
Economists also warn that governors often take too much credit for job gains during prosperous economic times, and too much blame from their opponents for job losses during poor economic periods. Gains and losses are largely driven by national trends.
“If Gov. Corbett has only been in office three years, it’s doubtful whether changes in state-level policies have had a big impact yet,” Burtless said in an email. “Probably 80 percent to 95 percent of the ‘private’ employment trend in Pennsylvania is explainable by the overall trend in the U.S. private economy (a trend state governors have little influence over) and by the distribution of industries in the state.”
Corbett’s campaign provided a list of several small-business tax cuts championed by the governor that the campaign says have helped boost job growth, including: the elimination of a state inheritance tax on small family businesses; a repeal of corporate loan taxes and an increase in the net operating loss cap; a phasing out of the capital stock/foreign franchise tax; and the elimination of state inheritance taxes on farms. Some of the tax cuts listed by the campaign didn’t kick in until 2013 or later, however.
“There is a lot of disagreement among economists about the connection between tax policy and job creation,” Tara Sinclair, a George Washington University economics professor, told us via email. “As the U.S. has been recovering from a deep recession over the last few years, you would expect that some of the job creation in Pennsylvania would be due to the national economic recovery, not to idiosyncratic state-level policies. … Comparing across-state performance would help support the claim. So, if Pennsylvania saw faster job creation than other states without the ‘low tax policy’ but with otherwise similar characteristics, then that would bolster the governor’s claims.” But based on the state-by-state data we provided about the percentage of private sector job gains, she said, “that relative comparison doesn’t look good for the governor.”
We’re not going to wade into the economic battle about whether tax cuts, as a general policy, are good for job growth. And the point is largely moot for Corbett’s argument anyway, because Pennsylvania’s job growth is lagging behind all but four other states in the country, and is well below the national average. The Corbett campaign makes a valid argument about Pennsylvania’s improvement relative to other states being somewhat muted by the fact that Pennsylvania was not as hard hit during the recession. Still, when the job gains Corbett boasts about in the ads are put into a national context, there’s less there than the ads let on.
– Robert Farley