Many Tri-Cities private sector workers’ buying power still in low gear


July was another down month for private sector wages in the Tri-Cities – Northeast Tennessee for that matter.


Data source: Bureau of Labor Statistics

Kingsport-Bristol workers saw their average drop for the 10th straight month when compared to the same months of the previous year.  The Johnson City MSA extended its losses to six straight months after a 0.05% improvement in January – a one-month break in a long string of year-over-year losses.

The chart of the private sector wage year-over-year percent gain/loss shows Kingsport-Bristol wages began softening in September of 2012 and have moved lower since. The downtrend began in the three-county Johnson City MSA in November 2011.  Both are showing improvement, but neither has managed anything more than flirting with positive territory on the short-term.

The buying power for workers making the average wage is 10.6% less when compared to their July 2008 wage  adjusted for inflation.

Of course that comparison is for workers making the average wage. Some are doing better, but the MSA monthly Bureau of Labor Statistics reports don’t offer a media wage.  Still, the existing tool does help track the short-term trend until annual averages area available. It also helps add context to the larger question heard in some segments of the labor force. That question is, “When will this recovery, feel like a recovery.”

A tight labor market where those doing the hiring can afford to be very choosy and where employers have all but stopped offering internal training unless it comes during an unpaid internship is part of the issue. So is lagging wages. It’s no big secret that the middle-classes started seeing wage stagnation long before the Great Recession. The most current 5-year census studies of family wages in the Tri-Cities shows the median was down $97 a month from 2008 when adjusted for inflation. At the same time the average inflation adjusted family income was up $39 a month. The difference is an indicator of shifts in the sectors and even thought the numbers of those in the top categories may be smaller their higher wages raises the average above the median.


See The state of family incomes in Johnson City, Kingsport and Bristol, TN 2007 v. 2012

So far this recovery has seen jobs and pay raises go to selected groups. If it were like past recoveries gains would be seen across all sectors. But that’s not the case for the Great Restructuring which is sometimes fragile and spotty.

growth rage comparisonMost of the bigger raises have gone to workers with specialized skills in industries that are booming.  Energy, transportation, health care and technology are examples. Those in retail or government have been less fortunate. Locally that sweeps two of the Tri-Cities’ largest job sectors into the low-pay gain category.

Another lagging example for both the economy and jobs is construction. Tri-Cities new home construction saw the second worst July year-to-date total in 10 years measured by year-to-date single-family permit pulls.  The sector is among those that have not recovered the jobs lost during the recession.  Some of the skilled workers needed to build homes abandoned their jobs to find other careers after the housing bust. Many have not returned even as demand has increased.

According to recent AP reports some economists think the outlook for broader pay gains has brightened. More people are quitting jobs than at any time in six years, a sign of confidence. A third of small businesses say they plan to raise pay within six months, double the proportion a year ago.

How much and when remains to be seen.  The local labor market – like the economy – is still struggling for maintain a sustainable toehold on the road to recovery.

Here what July’s average weekly wage looked line from the national level down to the state levels.

US $844
Nashville $817
Memphis $757
Knoxville $730
Tennessee $729
Chattanooga $743
Jackson $656
Morristown $647
Cleveland $613
Kingsport-Bristol $596
Johnson City $603
Clarksville $530

©Don Fenley


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: