April Tri-Cities unemployment rates drop to levels not seen since the late 1990s, early 2000s

Tri-Cities unemployment rates dropped to numbers locals haven’t seen for 20 years and it’s begging the question: Are we at full employment? If the answer is yes, it’s full employment or a natural employment level for a restructured economy that bears little resemblance to the one of 20 years ago.

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Employers added 1,400 nonfarm jobs in April and the region’s unemployment rate dropped to 4%. Johnson City had the lowest city jobless rate – 3.6%.

Preliminary, non-adjusted numbers from the Bureau of Labor Statistics’ payroll survey show the bet year-over-year job growth gains in the four-county Kingsport-Bristol MSA were in construction; professional and business services; leisure and hospitality; and government.

Job growth in the three-county Johnson City MSA wasn’t as strong across the board, but there has been a big gain in professional and business services. Trade, transportation and utilities and government also posted strong year-over-year gains. Johnson City also had more nonfarm jobs in April than it did in April 2008 – the monthly pre-recession benchmark.

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Preliminary numbers from the household survey show April employment 1% higher than April last year, and the labor force is up 0.6%.

Some of the glow of April’s good news comes off when the numbers are compared to pre-recession highs.

While employment is up, there were 1,898 fewer people with jobs, and the labor force is 22,666 below the pre-recession high. And, there were 1,700 fewer nonfarm jobs in April than there were in April 2008 – the year before the Great Recession’s full effects hit the local labor market.

A longer view shows the nonfarm job creation rate trend continued its slow upswing, but April’s year-over-year rate was less than half of what it was in April last year.

So, what is the new natural or full employment here in the Tri-Cities?

There’s no simple answer to that question because the term defines a condition where all the people who can easily or usefully be hired are working, and new hires occur by luring people from other jobs by offering them higher wages.

The Economist recently added a new consideration to the normal employment question this way, “If robots can easily replace lots of workers (and it increasingly seems that they can) then full employment is not simply a matter of making sure the economy is growing fast enough so that all willing workers have a job. It will also depend on the decisions societies make, regarding when workers can be given the means to refuse poor, low-pay jobs which could instead be done by machines.”

A rapidly aging population creating a wave of retirements, technology that has decimated the manufacturing sector and conversion to a service-oriented economy have dramatically changed the local labor market and economy. Some – primarily those with higher education levels and skill sets – have prospered. Others continue to struggle on a playing field where the economy has rendered the region’s strong blue-collar, middle-class benchmark lifestyle to nostalgia status.  Today’s economy is increasingly about the haves and the have-nots where local governments struggle to create and preserve jobs by attacking the structural underemployment problem with training and education. All of that is happening at the same time when the region has to depend on attracting new residents to sustain its population base. The natural population problem can be simply defined this way: For every 10 live births, there are 13 deaths.

Here’s a drill-down capsule view of April’s labor market reports with year-over-year comparisons:

TRI-CITIES   

Unemployment rate – 4%, the lowest since December 2000.

Nonfarm jobs – 203,500, up 0.4%. 1,700 fewer than pre-recession high.

Employment – 218,440, up 1%. 18,898 fewer than pre-recession high.

Labor force – 227,520, up 0.6%. 22,686 fewer than pre-recession high.

JOHNSON CITY MSA

Unemployment rate 3.9%, the lowest since September 1998.

Nonfarm jobs – 81,300, up 1%. 100 more than pre-recession high.

Employment – 86,830, up 1.5%. 9,105 fewer than pre-recession high.

Labor force – 90,380, up 0.9%. 10,980 fewer than pre-recession high.

KINGSPORT-BRISTOL MSA

Unemployment rate – 4%, the lowest since December 2000.

Nonfarm jobs – 122,200, no change from last year. 1,800 fewer than the pre-recession high.

Employment – 131,610, up 0.7%. 8,498 fewer than the pre-recession high.

Labor force – 137,140, up 0.3%. 11,738 fewer than the pre-recession high.

BRISTOL TN

Unemployment rate – 3.8%, the lowest since December 2000.

Employment – 11,090, up 0.5%. 1,104 fewer than pre-recession high.

Labor force – 11,530, down 0.7%. 1,356 fewer than pre-recession high.

JOHNSON CITY

Unemployment rate – 3.6%, the lowest since December 1998.

Employment – 30,190, up 1.5%. 1,094 fewer than pre-recession high.

Labor force – 31,330, up 1.02%. 1,451 fewer than pre-recession high.

KINGSPORT

Unemployment rate – 4.1%, the lowest since December 1999.

Employment – 21,570, up 0.5%. 647 fewer than most recent high.

Labor force – 22,500, down 0.1%. 1,745 fewer than most recent high.

+ Kingsport’s employment and labor force are reported from the most recent high because that market recovered from pre-recession highs in 2011 then began slowly arching lower.

 + Since April’s jobs and employment numbers are preliminary expect adjustments with next month’s report. The monthly adjustments are typically small. The major adjustments are made in an annual adjustment.

 

 

 

 

 

Johnson City workers see higher wages, Kingsport-Bristol avg. wage continues slide

April’s private-sector wages saw a continuation of a Tri-cities trend that has become all too common.
Workers in the Johnson City Metropolitan Statistical Area saw an increase while those in Kingsport-Bristol saw a decrease. The trend roughly follows the pattern of private sector job creation. Employers are still adding jobs, but the year-over-year growth rate is declining.

JOHNSON CITY MSA

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April’s average weekly private-sector wage was $644.33, up 6.9% from April last year. It was the 21st straight month the weekly average has increased in the three-county region. Those improvements follow a four-year decline in the annual average. Last year’s annual average was (up 4.2%) was the first annual increase since 2011.

Here’s how April’s average stacks up against some benchmarks and an annual wage basis.
– $2,600 higher than the 2016 annual average.
– $10,209 higher than the median pay per job.
– $6,196 lower than the median pay for a full-time male worker.
– $4,749 more than the median pay for a full-time female worker.

The private sector wage is lower than the MSA’s total average weekly wage, which is reported quarterly with a three-month lag by the Census Bureau. It’s lower due to the number of non-private sector jobs.

Here’s what the total average wage looks like in the MSA’s three counties.
– Washington Co. – $736
– Carter Co. – $640
– Unicoi Co. – $829

KINGSPORT-BRISTOL

April’s weekly average was $629.30, down 4.1% from April last year and the fourth straight month it has dropped below the same month of the previous year.

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The year-over-year wage growth rate has declined since February last year at dropped into negative territory the first of this year. At the same time, the year-over-year private sector job growth rate had been softening since March last year. I dipped below zero one month last year, regained minor growth for two months then dropped back to negative territory in March.

There were 400 fewer private sector jobs in the MSA in April than April last year.

Here’s how April’s average stacks up against some benchmarks on an annual wage basis:
– $996 a year below the 2016 annual average.
– $6,621 higher than the annual median wage for workers.
– $9,251 less than the median annual wage for a full-time male worker.
– $1,199 more than the median annual wage for a full-time female worker.

Kingsport-Bristol average total pay is also higher than the average monthly private sector wage. Here what that total looks like for the four counties in the MSA:
– Sullivan Co. – $889
– Hawkins Co. – $779
– Scott Co. VA – $592
– Washington Co. VA. – $699

Both of the local metro areas are well below the state average weekly private-sector wage of $805 a week.
Kingsport-Bristol had the lowest average in the state in April and Johnson City was the fourth lowest.
In Northeast Tennessee, Knoxville had the highest April average ($929). That was also the highest in the state.
Morristown’s average was $692 a week.

It has to be pointed out that a contributing factor in the average wage decline in Kingsport-Bristol mirror’s the area’s rapidly aging demographic. A growing number of workers – and higher-level executives – are retiring. Some of their replacements come in at a lower wage, and some are not replaced as part of a trend toward a contracting labor force.

Picture the Tri-Cities with 10,000 fewer retail workers

The job sector that some Tri-Cities residents love to hate is going through an unprecedented change and localization on a new study helps put a better face on it. It’s not a new story. Call it Version 2.0 of How Technology Drove the Tri-Cities’ Great Labor Market Restructuring.

Technology – not NAFTA – neutered manufacturing as the Tri-Cities’ leading job provider. And retail is on the way to becoming the next major sector to feel the bite. A study by the Cornerstone Capital Group, a financial services firm, predicts that use of technology in retail will put between 6 million and 7.5 million jobs at risk during the next decade. That accounts for 38% of the jobs in today’s retail sector.

Apply that locally, and you’re talking about almost 10,000 fewer Tri-Cities retail jobs. That’s 5.8% of the total regional private sector labor force. It would move retail from its current position as the region’s fourth largest jobs provider to the seventh place – just ahead of mining, logging, and construction. Ironically that sector ranked slightly behind retail as the sector that took the hardest hit in the Great Recession. April’s Bureau of Labor Statistics tables were used to baseline for the sake of the example.

Much of retail’s woes are focused on Amazon and e-commerce. But look closer and you can see other signs that are already so common they’re accepted as normal. They may not look like Optimus Prime or R2-D2, but they are robot workers all the same. Think of the self-checkout stations at Walmart and grocery stores, or the kiosks popping up on the tables at local restaurants. They are the children of the ATMs that put many bank tellers and clerks on the street looking for new jobs. It’s not really a new story. Remember telephone operators?

Anyone who reads the business news knows that retail is staggering under tectonic changes that have seen over 3,000 store closings and a growing list of bankruptcies. E-commerce and the overbuilding of retail outlets are getting most of the media’s attention as this phase plays out. But the bigger backstory is technology/automation. Here’s how Cornerstone’s head of research, John Wilson, described it for CNN “automation will drive more job losses than store closings in the next decade.”

And the bottom line should play out just as it did in manufacturing. Total output increased, but with fewer workers. That good for Wall Street and the higher ups at corporate offices, but not so good for Main Street and local economies.
It’s also bad news for women because they dominate the ranks of cashier positions, which are the most automatable jobs in the economy.

This phase of the labor force restructuring will also create some new jobs. And just like it happened in the manufacturing sector many of the newly created jobs will be of a higher quality than those they replace. But it won’t be a one-for-one trade, and the folks who get those new jobs will have to have a lot higher skills set than the retail workers that are replaced.

RELATED STORIES

Retail Automation: Stranded Workers? Opportunities and risks for labor and automation.
All the talk about how retail jobs have sucked the life out of the local jobs economy is more myth than fact.
Johnson City MSA retail GDP up 29.4% – Kingsport-Bristol up 5.7% since 2001
Kingsport-Bristol, Johnson City MSA manufacturing real GDP better than it was in 2001 with a lot fewer employees
Tri-Cities business pattern shows retail trade, construction firms biggest losses since recession

The good, the bad and the ugly about NE Tenn. bridges

The April data update from the National Association of Counties is the good, the bad and the ugly about bridges.
Here in Northeast Tennessee, there are 1,473 bridges that’s the good. It’s hard to get around without bridges.
The bad is 211 of those bridges are functionally obsolete.

The ugly is 101 are structurally deficient.

Carter county leads the region for the most structurally deficient bridges while Sullivan tops the list with the most bridges that are functionally obsolete.

The Washington Post ran a story with an interactive graphic that lets users pinpoint the problem bridges. You can find that map by CLICKING HERE

Some of the bridge woes will be resolved with the recently passed transportation funding reforms. The other side of that story is the local lawmakers who voted against the reforms are on the punishment list. At least that’s what former Lt. Gov. Ron Ramsey says.

And yes, the reality of that is while the local no-voting lawmakers may be punished by their GOP colleagues in Nashville, local resident will pay the price.
Here’s a capsule look at the number of functionally obsolete bridges followed by the number that are structurally deficient from NACo.
Carter Co. – 26 – 36.
Johnson Co. – 18 – 7.
Hawkins Co. – 24 – 11.
Greene Co. – 35 – 7.
Sullivan Co. – 59 – 16.
Unicoi Co. – 11 – 17.
Washington Co. – 38 – 17.

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