Tri-Cities region loses 439 jobs in first quarter 2008; cycle starts again

by Lewis Loflin

The Tri-Cities has never really recovered from the massive downturns of 2001-2005. Government, minimum wage services, and construction dominated by illegal alien labor have been the big gains. Good paying private sector jobs continue to disappear. "Kingsport lost 174 of those jobs, and its unemployment rate grew 10.18 percent to 4.83 percent.

Bristol lost 94 jobs in the first quarter, while its unemployment rate rose 6.95 percent to 4.86 percent. And Johnson City gained 32 jobs, but its unemployment rate climbed a whopping 19.10 percent to 5.19 percent in the quarter." The real unemployment rate is much higher. So how does a community gain jobs but the unemployment rises? See The truth about unemployment.

ETSU economist Steb Hipple said the region's employment trends shifted during the period. Job gains were reported in education and health (paid for by government for the most part), construction, leisure and hospitality, finance, and information services.

"Job losses were reported in durable and non-durable manufacturing, professional and business services, wholesale trade, government, and transport and utilities." My comment: this is across the economic spectrum. In the past government has been a major job engine in this region while manufacturing continues to tumble.



"And job levels remained stable in retail trade, mining and other services." My comment: retail is also low-paying. "Nationwide, job levels remained virtually unchanged in the first quarter vs. the same period of 2007, following 21 consecutive quarters of job growth. Meanwhile, the nation's unemployment rate jumped 10.2 percent to 5.28 percent, representing the first double-digit increase since the 2001 recession."

Comments by residents:

Wayne 2008-05-08 had this to say of Mr. Hipple:

The Fed has been desperately trying to prop up a broken system. The interest rate cuts have only been used to shore up balance sheets of financial institutions. Interest rates that are paid by consumers have actually risen during the time of these rate cuts. In other words, things are much more desperate for our economy than it seems to most people. But Mr Hipple never met a Republican policy he didn't like. I never have understood why he is considered such an authority. Jobs in this region have dried up, and if you find one it is a low paying one without benefits. Don't believe me? Just browse the classified's in any regional newspaper. Compare it to the same paper from a few years ago. The numbers are telling. Just my opinion.

Joe 2008-05-08:

You can define a recession any way you want but if you're unemployed and can't afford to drive around to look for work because gas it almost $4 a gallon, then I'd say you might be in one.

Ref. 05/07/2008 Kingsport Times-News

$2M in the hole for Kingsport Schools

Budget problems have forced Kingsport City Schools to make some cost-saving measures for the 2008-2009 fiscal year, and those cuts included both existing and proposed personnel positions...The system's original budget included approximately $61 million in operating costs. However, a new budget approved on June 5 was slimmed down by nearly $2 million to a $59 million total operating budget.

Of the $2 million cut, a reduction in proposed positions saved nearly $800,000. Other reductions included three existing teacher and system wide positions, one technology position and personnel in adult education (community education, not GED)...Despite the budget crunch, KCS will be hiring some new teachers. Instead of 55 or 60 that are normally at new teacher orientation, however, he expects between 25 and 30. Ref. Kingsport Times-News June 19, 2008.

It should be noted that the region's colleges graduates between 200-300 teachers per year according the Bristol Herald Courier in 2007. Even then, only 40-50 positions in Tri-Cities ever came open, due mostly to retirements. The rest were forced to relocate or flip burgers. To quote,

"To make those cuts work without sending someone to the house without a job, we've just tried to do it through attrition."

Goody's Bites the Dust

Kingsport Store Falls Victim To Goody's Bankruptcy. The Goody's Family Clothing Store in Kingsport will soon shut its doors, one of 69 Goody's stores that will close. The Knoxville company filed for Chapter 11 protection and couldn't immediately say how many of its 12,000 employees will lose their jobs. Goody's operates 355 stores in 20 states. June 10, 2008

What's going on?

For years this website has warned against depending on sales taxes as revenue and retail and tourism as economic development. This has included a borrowing binge by most local governments trying to buy prosperity or to handout as corporate welfare. These are both unstable and produce low-wage jobs. The races at Bristol Motor Speedway earlier in the year were bad, we hope due to bad weather. The merchants I talked to at the track believe it's the high gas prices, etc. Also note the move of Sam's Club from Sullivan County to Bristol, Virginia would have caused some of this problem. Some info from the Kingsport Times-News (5-24-08) confirmed what I already knew:

Sullivan County sales tax revenues still slumping

Not even spring race weekend could pull countywide sales tax revenues out of a fiscal year slump...sales tax revenues in Sullivan County are running about $661,000 below last year at this point...Hardest hit appears to be the Kingsport city area, where sales tax revenues are about $862,322 below last year at this point...It's the seventh time this fiscal year that monthly sales tax revenues fell short of the same month last fiscal year.

How the system works with a two-month lag between collections and when the local government gets their cut:

Sales tax revenues are generated when money is spent on goods and services at businesses throughout the county and its cities. The money is used by local governments, largely, to support school systems. When a consumer pays sales tax locally, it is sent to the state, which redistributes it back to the county and its cities based on collection site...

Local option sales tax revenues are split 50/50 - with half going to school systems in the county, and the other half going to the local government where the collecting business is located. Each $1 of local option sales taxes collected in Kingsport, for example, generates 50 cents for the county's three school systems (the money is split based on average daily attendance) and 50 cents for city coffers...Total August through May totaled nearly $38.34 million, down from $39 million for the same period last year.

This is reason why Kingsport, Bristol, and Johnson City all annex any commercial property they can grab.

Update June 23, 2008 Kingsport Times-News: Sullivan County sales tax revenues down $510,000

Hardest hit appears to be the Kingsport city area, where sales tax revenues are about $743,500 below last year at this point...Sales tax revenues received by local governments in Sullivan County from August through this month totaled nearly $42.07 million. That's down from about $42.58 million for the same period last year.

Kingsport issues another $20 million in bonds

To pay for a variety of capital projects Kingsport has borrowed a t total of $19.85 million. The money will go for the Kingsport Center for Higher Education, the Regional Center for Health Professions and a new fire station on East Stone Drive. This includes $1.2 million for various water projects. Moody's Investors Service gave King sport's bonds an A1 rating. Ref. Kingsport Times-News June 16, 2008.

Press Congressman David Davis http://daviddavis.house.gov/

Alexander, Corker, D. Davis: City of Kingsport Receives $1.5 Million Workforce Development Grant

Washington, DC -- U.S. Senators Lamar Alexander (R-Tenn) and Bob Corker (R-Tenn) and U.S. Representative David Davis (R-Tenn.) today responded to the announcement from the Economic Development Administration (EDA) of the U.S. Department of Commerce that the City of Kingsport has been awarded $1.5 million in grant funding to support construction of the Kingsport Higher Education Center, a workforce development training facility. The center, which will be built in accordance with the United States Green Building Council Leadership in Energy and Environmental Design (LEED) standards for environmentally friendly and energy efficient construction, will help train workers in the high tech fields of the 21st-century global economy. According to information released by the EDA, this funding will aid in the creation of 714 jobs and help leverage $530 million in private investment...

This is just more pork. This only duplicates what ETSU, Northeast State Technical Community College and King College already do and many of their students are forced to relocate because they can't get jobs.

Quoting a Sullivan County official, he confirmed again what most in power here will not address: "I was in no way casting dispersions on the level of education at ETSU. When I said that "we have ETSU students flipping burgers," I was pointing out that we do not have the level of jobs in this area to sustain the number of graduates from our local colleges. Therefore, they are forced to either leave the area or take what jobs are available to them, which in most cases are in the service area," The trouble is there are no decent jobs even in trades as the Tarnoff report revealed. See: Sitgreaves: 'Burger' comment aimed at lack of white-collar jobs in Tri-Cities.

To quote Tennessee Gov. Phil Bredesen:

"Well, I don't think our community college system does a wonderful job of aligning what it's doing with the real needs of the workplace. One thing I'm interested in exploring is any kind of joint effort where a community college can help train people in exchange for some honest attempts on your part to employ them when they're done."

See Why your college degree is worthless in Tennessee

The big picture is what will Bristol Motor Speedway due later this summer. Posted June 26, 2008.