Southwest Virginia Job loses 2010-2020.

Three Decades of Job Losses in Southwest Virginia

by Lewis Loflin

Thirty years of job losses decimated Southwest Virginia and East Tennessee.

Likely, 100,000 jobs have disappeared between Roanoke and Knoxville. Many "new" jobs are marginal, low-paying service and retail jobs.

I have been tracking this issue since 1999, and the links below tell a story of how the government, on the one hand, follows policies favorable to helping businesses that destroy American jobs. In particular, this benefited multinational companies over domestic companies.

Domestic companies resorted to the same destructive practices as the multinational companies - a crushing war on labor through outsourcing jobs to low-wage hellholes or poor communities in America, sub-contracting, hiring illegal aliens, etc., plus automation.

Most of these would go to automation eventually. Still, without the ability to wholesale destroy millions of jobs overnight, the process would have been more orderly and less destructive to workers. Workers would have time to transition. Instead, it was a mass replacement.

President Clinton signed NAFTA, and it went into force in 1994. Majorities of both parties supported it.

Manufacturing had already been declining and exploded. In just one quarter alone, we lost 8000 jobs in Tri-Cities.

Update September 3, 2019. Based on data from Dr. Steb Hipple, an economist at East Tennessee State University (retired), his data goes to the 3rd. Quarter of 2016. The job losses in Tri-Cities are staggering, worse than what I thought.

(The Tri-Cities Consolidated Statistical Area comprises the Kingsport/Bristol MSA and the Johnson City MSA.).

The Bristol TN-VA, Kingsport, and Johnson City Urbanized Area Labor Market lost thousands of jobs shrinking the labor force that shrank the unemployment rates. The above table shows a decline in the labor force by almost 18,000. But it gets worse.

Includes: Johnson City, TN, Carter County, Unicoi County, Washington County.
All workers BLS:
2016 78,140 workers, Median hourly wage $14.47, Annual $40,140
2018 77,020 workers, Median hourly wage $15.38, Annual $42,740
Labor force fell 1120 jobs in 2 years.

Kingsport-Bristol-Bristol, TN-VA MSA includes: Bristol city, VA, Hawkins County, TN, Scott County, VA, Sullivan County, TN, Washington County, VA.

All workers BLS:
2016: 118,470, Median hourly wage $15.27, Annual $41,050
2018: 116,150, Median hourly wage $16.50, Annual $43,480
Labor force fell 2,320 in 2 years.

That's not the worst of it still. For Tri-Cities, the total labor force is 193,170. During a so-called boom, the labor force shrank by 3,440 jobs in 2 years.

In 2009 the labor force was 247,965, minus 193,170 equals a staggering loss of 54,795 fewer people are working in 2018 than in 2009!

I can't believe this myself. Anyone working here knows it is terrible.

High poverty and disability rates and many retirees leaving the labor force can't explain this.

Precise data is kept confidential. When we look at the national labor force declines, this makes sense.

The Atlantic article "Did NAFTA cost or create jobs? Both" Mar 22, 2017. He paints a rosy picture claiming GDP got a boost, etc. He is an apologist for NAFTA. Here is how he sees it. To quote,

A good example of this is fabric and clothes. As part of NAFTA, the U.S. made a deal with Mexico. It said, "Listen, we will drop barriers on Mexican clothes if you use American fabric to make them." So that way, Mexico would get jobs making clothing, and America would get jobs making fabric.
The result?

"Fabric production in the United States rose substantially after NAFTA," said Noel Maurer, associate professor of international affairs and business at George Washington University. "But jobs continued to decline because automation was wiping out jobs."

So those jobs went to robots. Not really NAFTA's fault.

The above claim is deceptive. In this case, I'm sure we sold plenty of cloth because that is easy to automate and hires few people. They even cut the fabric before shipping it south of the border to be sewn. That is where the jobs are and can't be automated - yet.

So Maria in Central America faces employer abuse while sewing for 80 cents an hour. So American companies replaced most of their employees with foreign wage serfs.

NAFTA enabled companies to replace workers. That is all it ever was. It got worse in 2001 when DotCom blew up. China entered the WTO and had plenty of wage serfs, even cheaper than Mexico. NAFTA, automation, and outsourcing were drowning American labor. The promised "high-tech" jobs to replace the old ones never materialized.

The government tried every silly scam to create a real economy in Southwest Virginia. Politics, class warfare, and incompetence doomed the effort from the start.

They refused to address the policies that assured their failure. Economic development became a jobs program for high-salaried white-collar bureaucrats, consultants, and contractors. China made an already destructive system even worse.

"The Elusive 'Better Deal' With China" by Gabe Lipman August 14, 2018 writes,

"By letting the country into the World Trade Organization back in 2001, Washington laid the groundwork for the tensions roiling relations with Beijing today."

On the labor side:

In retrospect, the United States wasn’t ready for the dislocation caused by the unprecedented scale of China’s economic rise. Smaller than France in 2001, China is now the world’s largest economy by some measures, and its preeminent trading power. Economists now acknowledge that the confluence of two factors—China’s rapid economic rise, and increased American exposure to Chinese exports that followed its membership in the WTO—adversely affected the employment and wages of many American workers in the early 2000s.

A landmark study by the MIT economist David Autor attributed the loss of 985,000 manufacturing jobs in the United States from 1999 to 2011, or about 20 percent of the total job losses in the sector during this period, to the so-called China shock...With its vast supplies of cheap labor, China had ready-made advantages when it came to churning out low-cost manufactured goods for export.

Like NAFTA China was about cheap labor which is de-facto government policy. See Government War on American Labor Good for Commerce

Southwest Virginia Population decline 2010-2018.

Government efforts to help made matters worse

Our ruling class sees commerce at any cost as positive. GDP is a god; the rest of you can like it or burn in hell.

The excuse was the government would help you find new jobs, or would create them for you.

Their efforts only made matters worse - most failed outright. Note the region's substantial population losses and poverty rates—hundreds of millions in subsidies and corporate welfare, excellent four-lane highways, new broadband infrastructure - nothing.

The political and corporate war on labor is raging on still.

Now throw in millions of immigrants and illegal aliens while this is happening. The opposition to mass immigration is about economics, not about race.

The problem was so severe that the New York Times noted ZERO private sector job growth from 1999 to 2009. In 2009 the housing bubble imploded, driving the labor participation rates through the floor. There has been no recovery in 2019.

Mass layoffs across entire industries negated the DotCom Bubble. Then China increases the bleeding, then near collapse with the housing bubble.

See No US Job Creation 1999-2009

Call Centers Are Terrible Employers

Let's take an example. Call centers are among the worse-paying, unstable jobs out there. Southwest Virginia has poured millions into bringing in call centers, promising thousands of new jobs.

Not only do they seldom produce the promised jobs, but most also pull out, in some cases, in less than a year.

When the call center relocates, they fire their existing workforce and come here expecting a lower-wage labor force. VCEDA call center jobs average $11 an hour in Southwest Virginia.

$11 an hour is the minimum wage, $1.60 in 1970, and adjusted for inflation, is $10.46 in 2018—over $12 an hour in 2022.

The company gets millions in other subsidies from government-subsidized buildings, etc., to outright cash gifts for the jobs.

This corporate welfare allows the company to under-bid other call centers costing those people their jobs.

Bristol Virginia population 17,835 in 2010, 16,482 in 2018. A loss of 1,353 people or -7.1%.

Bristol Virginia is 88% white, 21.3% poverty rate. It also has 13 public housing projects at last count.

With a disability, under age 65 years, percent, 2013-2017 16.3% or ~2,687 people.

Persons without insurance in Bristol Virginia 13.8% or ~2,275 people.

Per capita income in past 12 months (in 2017 dollars), 2013-2017 - $21,589.

A look at 2 decades of cable ready socialism in our region:
Cable Ready Socialism
How CGI-AMS and Northrop Grumman Failed Russell County
How Cable Ready Socialism Failed Southwest Virginia
Sprint Jumps State Line Collects Millions
U.S. Solutions Dumps Bristol Virginia for Bristol Tennessee
Travelocity Fails Dickenson County

History, Causes of Poverty in Southwest Virginia

"The most corrupt region is Southwest Virginia...more indictments for political and public office corruption have happened in this region than all other parts of the state combined." Larry Sabato, director of the University of Virginia's Center for Governmental Studies.

"It's a little-known fact that roughly 20 percent of the children in Southwest Virginia live below the poverty line and go hungry every night." Kevin Crutchfield, President Alpha Natural Resources, January 15, 2009

Congressman Rick Boucher and President Obama

To quote LENOWISCO Broadband Study Warned against Call Centers (PDF file):

"The region has been replacing traditional (better paying) manufacturing jobs with (low paying subsidized) call center jobs, which provide limited advancement and work opportunities. Call centers represent the factory floor of the Knowledge Economy; they are an important part of a diversified economic development strategy, but the region must be careful not to rely too heavily on them, as the work is easily moved to other regions and/or other countries."

No US Job Creation 1999-2009

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