There are reasons to be optimistic about employment in the Tri-Cities

 Steve Hawkins and I chatted late last week about the Tri-Cities employment and some local labor market trends.  The discussion airs Monday morning at 92.9 FM.

At one point in the discussion I was discussing some upward movement in employment and non-farm jobs. It’s too early to be a trend just yet, but the almost two-year decline just might be turning. Steve asked me why I was optimistic if the numbers didn’t back up a trend reversal.

There’s a lot more behind it than what the monthly number show for several reasons.

Writing about commercial real estate for the Business Journal for the last year-and-a-half has forced me to take a longer view of topics than the short-term, reactive focus that’s a daily journalism staple. For instance, the Johnson City MSA has taken the brunt of the labor market double dip that began about two years ago. True, the three-month rolling average for both employment and non-farm jobs hasn’t been turned upward in that MSA by gains this year. But if you look deeper you’ll see the rate of decline is slowing.

And there things that BLS and Census reports can’t show.

Washington County Economic Development Council CEO Mitch Miller discussed some of them Saturday on “Business Matters” on WETS.  While discussing the proposed industrial park in Gray he pointed out that Johnson City has four industrial sites (100,000 sq. ft. or more buildings) that are under contract.  No announcements yet, not jobs yet but when that situation culminates Johnson City will have expended a big part of its stock of industrial site product. When you add that to the momentum that has been announced you can’t help but be optimistic.

And it’s not just Johnson City. The business and jobs spinoff from the Pinnacle in Bristol, TN is  beginning to take hold.  Although  Eastman’s corporate office expansion  has overshadowed, other progress  Kingsport is seeing and continues to focus on infill. By the way, the Eastman expansion is the third largest office expansion in the nation.

Of course there are some rough spots.

The area has a labor force and underemployment problem just like the rest of the nation. Much of that is driven by our aging demographic. Since our median age is older than the national median we’re getting the brunt of some of that before the rest of the nation.

One way to get a handle on the labor force issue is comparing a pre-recession labor force – employment relationship to what exists now. To do that you have to go back to 2007. We didn’t enter the recession until 2009, but 2008’s numbers were already showing some of the effects. We were seeing an atypical in-migration cause by the recession. While the rest of the nation was shedding jobs in 2008 our labor market was still strong. So, a bunch of former residents who lost their jobs or couldn’t find jobs moved back home to weather the recession with relatives. You can see that effect on the chart’s labor force lines in 2008.

As the jobs picture improved some of those folks have moved away, but our labor force – employment relationship is still nowhere what it was in the 2007 benchmark. The total labor force is down almost 2% (4,735 people) while the number of employed people is down 4.5% (10,420 people).

Some of that is caused by people retiring or being forced into retirement. Another part is people dropping out of the labor force. There’s also a skilled labor gap that can only be filled with education as a long-term fix.  A telling bit of data that we don’t have on a current basis is the labor force participation rate. It’s available on the national level, but the most current local data is from 2012. I did a 2008-2012 comparison earlier this year and will do a follow-up when the next Census numbers are released.



Tri-Cities annual jobless rates, labor force participation by age group 2008 v. 2012 



I think there’s reason for optimism, but this isn’t a recovery that treats everyone equally. Some are benefitting from today’s economy, so are still wondering when things will get better.


This is not your father’s recovery 

labor market tri





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