This post is by OK Policy intern Emily Callen. Emily is a senior at the University of Tulsa, where she is pursuing a major in Biology and a minor in Economics. A longtime wonk-in-training, Emily has for years been boring her college friends by quoting statistics at parties.
When I grow up, graduate college, and get a job (in two months), I want to live in a state with an abundance of job opportunities. That’s why I’ve decided to stay in Oklahoma. Despite rumors about the mystical, job-creating powers of eliminating the income tax, the numbers show that Oklahoma is attracting businesses and creating jobs, income tax and all.
According to the Bureau of Labor Statistics, in December 2011, the unemployment rate was 8.5 percent for the nation as a whole. In Oklahoma, it was 6.1 percent. In Texas, our notorious neighbor, the unemployment rate was 7.8 percent. Oklahoma’s personal income growth rate remains among the highest in the nation. Between the first quarter of 2010 and the third quarter of 2011, Tulsa was one of only 5 of the 100 largest metropolitan areas to experience manufacturing employment growth greater than 10 percent. Oklahoma City had manufacturing growth between 5 and 10 percent in the same period, according to Brookings.
OK Policy has compiled job-creation data for the past three years (2009-2011) from Oklahoma Department of Commerce quarterly reports and press releases that provide a picture of Oklahoma’s strong job-creating performance. It is important to note that these data are based on announced company projections and may not match the exact number of jobs created. Since 2009, companies have announced projected expansions of 26,000 jobs in cities and towns across Oklahoma. Of this total, 20,000 were added at existing facilities in Oklahoma, while over 6,000 were created at new facilities.
That Oklahoma has an income tax must come as a shock to companies who have chosen to locate and expand here!
The fact is, we do not need to slash the income tax to attract businesses to Oklahoma. Initiatives like the Quality Jobs Program (QJP) already provide incentives to companies that create new jobs. QJP gives quarterly cash rebates to employers who meet specified job number and wage thresholds. Many new and expanding companies have taken advantage of QJP, and the average wage for jobs created under the program was $68,805 in the first half of FY 2012, or nearly 77 percent higher than the state average wage, according to the Oklahoma Department of Commerce.
The Boeing Company is among the businesses expanding its facilities in the state. Boeing estimated that an expansion at its Oklahoma City plant would add 255 new jobs. Two Tulsa companies, NORDAM and Spirit AeroSystems, Inc. will manufacture parts for Boeing aircraft. Spirit AeroSystems expanded to add about 200 new jobs last year. That expansion followed an even larger one, in 2009, which added 500 new manufacturing jobs. Oklahoma ranked second nationally in manufacturing employment growth in 2011. Despite the recent American Airlines layoffs, aerospace manufacturing is alive and well in Oklahoma, and according to the National Association of Manufacturers, “manufacturing compensation is nearly 50 percent higher than other nonfarm employers in the state.”
Jobs have also been created in other sectors. In 2010, the discount clothing retailer Citi Trends announced the opening of a new distribution center in Roland, OK. The facility is expected to create 200-250 jobs.
Oil and gas exploration and extraction are also driving job growth. Employment in the Mining and Logging sector, which in Oklahoma primarily means energy, is approaching pre-recession levels. Last year, Chesapeake Energy Corporation added 350 jobs. Devon Energy Corporation, also based in Oklahoma City, added 60 new jobs in Weatherford last year. Both companies were ranked in Fortune’s 100 best companies to work for in 2011.
Business is booming in Oklahoma. New and expanding companies are already choosing to locate here. We do not need to slash the income tax and bankrupt state services to draw the business that will drive the state’s economy; they’re already here.
More details about job creation in the state can be found in a spreadsheet compiled by OK Policy.