Now at SEVEN quarters of consecutive job losses - losses accelerate (Kingsport: middle-class, sales)

[Serious Conversation]

Job losses continue to accelerate in the Tri-Cities. Why can't the area get back on the right track?

Tri-Cities Labor Market Report for Fourth Quarter 2013

[Ted Bear]

If I understand the demographics correctly, population growth in the area has been zero for quite some time. Like many years. Perhaps decades.

Some technology jobs swelled the employment picture for a while, as did some manufacturing. Then, most recently, there was the health care swell as the previous two groups faded.

At then end, it all amounts to the status quo.

I would suggest that the health care jobs are perhaps more stable, although at present the super normal growth of the last decade in that area is leveling off, and perhaps consolidating. Simply put, there are only so many medical facilities the area can support. More doctors, sure, but consolidating the administrative side of the health care business simply makes economic sense.

We are on the precipice of a period of deflation. It could be serious, but may take some time to unfold given the massive stimulus at the Federal level.. The Tri Cities area 'ought' to weather that consolidation better than some other areas, simply because whatever else, we need health care. Should there be some (unlikely) mass exodus of people, even that industry could suffer. But, where are you going to run to?

[jchometeam]

For this particular quarter, job market performance weakened both regionally and nationally. Unemployment rate in the Tri Cities decreased, but that is a very flawed number.

[Page2]

Originally Posted by Ted Bear

If I understand the demographics correctly, population growth in the area has been zero for quite some time. Like many years. Perhaps decades.

Some technology jobs swelled the employment picture for a while, as did some manufacturing. Then, most recently, there was the health care swell as the previous two groups faded.

At then end, it all amounts to the status quo.

I would suggest that the health care jobs are perhaps more stable, although at present the super normal growth of the last decade in that area is leveling off, and perhaps consolidating. Simply put, there are only so many medical facilities the area can support. More doctors, sure, but consolidating the administrative side of the health care business simply makes economic sense.

We are on the precipice of a period of deflation. It could be serious, but may take some time to unfold given the massive stimulus at the Federal level.. The Tri Cities area 'ought' to weather that consolidation better than some other areas, simply because whatever else, we need health care. Should there be some (unlikely) mass exodus of people, even that industry could suffer. But, where are you going to run to?

Washington and Unicoi are the only two NE Tenn. counties with a natural population growth ie the birth rate is higher than the death rate. That's true of 1/3 of the counties in the U.S. Growth has come with migration. Health care jobs began contracting almost a year ago when Welmont cut its medical transcription offices then outsourced the service. The momentum is increasing. The larger issue is the nature of jobs and who creates those jobs is changing. Much of the problem is structural employment and that's solved by upgrading the skills and education levels. It's a slow process for sure. While some high-quility, high-paying jobs are being created there are more part-time, low-paying jobs being created. Another factor is demographics. A back of the envelope calculation shows that in just the Kingsport-Bristol MSA 10 people a day reach the age of 67 and that will continue for the next 17 years. Of course that is based on everything being constant from the 2012 population data. Another thing to remember is although jobs are a huge driver of the economy there are other elements. The region went into the recession late and came out early with strong jobs growth then began a second dip. The recovery has been very good to some people and very hard or others. The number of households with $100,000 or more in family income has increased, but the core "middle-class" household incomes have declined. At the same time the housing market is at or very near pre-recession levels and retail sales tax collections have not made a nose drive. All in all this doesn't show the economy is managing some growth.
This rounds out some of the issues.
Is there a bottom-line to the Tri-Cities jobs situation?

[Page2]

Originally Posted by jchometeam

For this particular quarter, job market performance weakened both regionally and nationally. Unemployment rate in the Tri Cities decreased, but that is a very flawed number.

The unemployment is extremely flawed. It would be interesting if the U6 report was broken down to the local level.

[Serious Conversation]

I agree with most of the essay above, but I think it's flawed in a few areas or needs some points added.

He's spot-on with point 1.

Yes, some employers are still creating good jobs. However, I can tell you by having worked at Eastman and knowing many Eastman employees and contractors personally that wages and benefits for many occupations are well below those for companies of a similar size in areas with a similar cost of living, especially for new hires. Working at Eastman certainly isn't as lucrative as it used to be. I've interviewed with Wellmont and had an offer from MSHA back in 2011 or 2012. Both of those were also well below the market rate. If compensation is well below the market rate, even in other areas with similar cost of living, how in the world will the area attract talent?

While Mr. Fenley is right that mobility is the best option, for many older workers, those with homes that won't sell, or those who have a lot of strong family and social roots in the area, it's difficult to move. I can also attest that many locals have a strong "sense of place" and can't see themselves ever leaving, no matter how bad it gets.

The quality of jobs in relation to the educational attainment of the population is kind of a chicken-and-egg thing. If the locals are uneducated and unskilled, companies will relocate those jobs to healthier areas. However, if there are few jobs where an education is mandatory or even useful, the locals will view education as unnecessary, and possibly with contempt and suspicion. While I applaud the governor's efforts, simply educating people isn't going to create jobs in an area that has had little need for education historically.

Neither will cutting taxes and loosening regulations further. It's harder to think of an area where regulations are more lax and taxes/wages lower than east TN. This has NOT seemed to help our growth. We are certainly business friendly and that alone has not helped.

[jchometeam]

Originally Posted by Emigrations

I agree with most of the essay above, but I think it's flawed in a few areas or needs some points added.

He's spot-on with point 1.

Yes, some employers are still creating good jobs. However, I can tell you by having worked at Eastman and knowing many Eastman employees and contractors personally that wages and benefits for many occupations are well below those for companies of a similar size in areas with a similar cost of living, especially for new hires. Working at Eastman certainly isn't as lucrative as it used to be. I've interviewed with Wellmont and had an offer from MSHA back in 2011 or 2012. Both of those were also well below the market rate. If compensation is well below the market rate, even in other areas with similar cost of living, how in the world will the area attract talent?

While Mr. Fenley is right that mobility is the best option, for many older workers, those with homes that won't sell, or those who have a lot of strong family and social roots in the area, it's difficult to move. I can also attest that many locals have a strong "sense of place" and can't see themselves ever leaving, no matter how bad it gets.

The quality of jobs in relation to the educational attainment of the population is kind of a chicken-and-egg thing. If the locals are uneducated and unskilled, companies will relocate those jobs to healthier areas. However, if there are few jobs where an education is mandatory or even useful, the locals will view education as unnecessary, and possibly with contempt and suspicion. While I applaud the governor's efforts, simply educating people isn't going to create jobs in an area that has had little need for education historically.

Neither will cutting taxes and loosening regulations further. It's harder to think of an area where regulations are more lax and taxes/wages lower than east TN. This has NOT seemed to help our growth. We are certainly business friendly and that alone has not helped.

Everyone has a choice to make. If someone (like me) has a strong "sense of place" therefore is not as mobile as others, than the local area is your market rate. Either take that wage or change careers. If, for example, you are going to stay here no matter what, and someone gets a job from the only two health care companies, the higher of those two would be your market rate. Sometimes, its even better to take less than that so that you can work in an environment that is free of drama, less stressful, etc.

I applaud the efforts to encourage people to go to the applied schools of technology. However, the idea of placing the community college system ahead of the state universities and private four year institutions is very short sighted in my mind.

[Serious Conversation]

Originally Posted by jchometeam

Everyone has a choice to make. If someone (like me) has a strong "sense of place" therefore is not as mobile as others, than the local area is your market rate. Either take that wage or change careers. If, for example, you are going to stay here no matter what, and someone gets a job from the only two health care companies, the higher of those two would be your market rate. Sometimes, its even better to take less than that so that you can work in an environment that is free of drama, less stressful, etc.

I applaud the efforts to encourage people to go to the applied schools of technology. However, the idea of placing the community college system ahead of the state universities and private four year institutions is very short sighted in my mind.

The problem is that this "market rate" tends to be lower than other areas with a similar cost of living, not to mention quality of life. I don't consider working at Eastman and sitting in that unpleasant smell a good quality of life for the people down there in it. Low income is its own stressor. While you personally may be doing well, many locals are struggling to stay off assistance programs, even if they want to make an honest living.

Granted, some people are doing very well. One of my party buddies back home owns a small business he inherited from his in-laws and spends most of his days golfing and socializing. If I was him, sure, I'd stay.

There were rumors this week that Eastman was laying off more personnel. Does anyone know anything about it?

[jchometeam]

I agree with you- the going rate is lower than many of the other areas. Again, personal choice. Move, or take the lower paying job. Don't be bitter about the choice though if you choose to stay- or get a sense of entitlement and think that you are worth more than you are being offered.

[Serious Conversation]

Originally Posted by jchometeam

I agree with you- the going rate is lower than many of the other areas. Again, personal choice. Move, or take the lower paying job. Don't be bitter about the choice though if you choose to stay- or get a sense of entitlement and think that you are worth more than you are being offered.

This kind of attitude of "take it or leave it" is one of the reasons the area is stuck in the funk it's in. Your attitude is very common among the natives. How will it ever attract anything but retirees when the prevailing attitude to newcomers is "here is your pay - we know it's way lower than pay in normal areas, but you can either take it or move on to the next place."

You'd have to be an imbecile to relocate to a place with that kind of attitude.