Economic Crisis in East Tennessee

Tegrant buys Greenvile plant, slams the doors

30-40 people will lose their jobs by end of August 2008. This Tegrant plant supplies "protective packaging products and speciality components" at this 80,000-square-foot plant. Many of the employees have worked there for 10-20 years. Tegrant bought the plant from SCA North America in March.

Yet Randy Harrell, president of the Greene County Partnership, said, "The economy continues to take a toll on Greene County's local industries. The news that Tegrant Corporation will close their operation in late August saddens me. The cost of transporting product due to high fuel prices must have played a role in their ultimate decision. Once again, quality workers will be displaced and dedicated employees will be out of a job due to no fault of their own. I plan to meet with local company representatives next week and discuss what role the Partnership can play in providing assistance. We will do what we can to help them find jobs." Ref www.greenevillesun.com July 31, 2008.

Nissan offers "buyouts" (cans) 6000 Tennessee workers

Nissan North America Inc. will offer buyouts to about 6,000 employees at the company's two Tennessee plants and eliminate a night shift at one plant...The technicians and salaried employees at the assembly plant in Smyrna and powertrain plant in Decherd will be offered a lump sum of $100,000 or $125,000 depending on tenure, as well as medical and car purchase benefits...it (Nissan) does not plan any layoffs. (What exactly is this, an extended vacation without pay?) Ref. Associated Press August 31, 2008.

More bad news for Tennessee: State layoffs seem inevitable

Gov. Phil Bredesen "was pleased" even though a state buyout program fell short. "The buyout program was intended to save the state $64 million, which was one element of a wider $468 million in budget reductions due to slowing revenues...The lackluster interest in the buyouts increased the likelihood that the state will lay off employees next year. The governor said Tuesday that one way or another, the state must reduce its payroll by $64 million...The offer includes four months of base salary, $500 for each year of service, and six months of subsidized health coverage with an option to pay for an additional year. The benefits also include tuition aid at Tennessee colleges and universities, and a one-time payment for those 65 and older." Tennessee even before this was a poor, low-wage state as it was.

Tennessee is "seeing revenues fall and demand for services rise...29 states are experiencing budget shortfalls this year...15 states that are reducing their payrolls this year by eliminating jobs or not filling them when they become vacant...At least 12 states are raising revenue with new taxes, a path that Tennessee has opted not to take..." Raising taxes in Tennessee for any reason tends to bring out lynch mobs. Ref. August 6, 2008 The Tennessean

Shelves are bare at Hunger First

If the measurement of tough times could be gauged by bare shelves and empty freezers, there are people in the region who are struggling. "I know people are out there hurting and are struggling just for the essentials. I can see it with the number of people coming in here," said Cindy Risk, director of Hunger First, a donation point in downtown Kingsport that helps people with food and clothing...Donations that can come from local churches, civic organizations or financial contributions from businesses or private citizens.

But Hunger First's shelves are now bare...Rising food costs are among the reasons people need help, Risk says. "I think people are being priced out of the supermarket. I know everything's higher nowadays, but food is something that everybody has to have. That's one place where you can't cut back..." Hunger First is seeking donations of all types of food to meet the growing demand. Any contributions can be made during regular business hours at 829 Myrtle St. For more information call (423) 677-0065. Extract Kingsport Times-News July 29, 2008

Second Harvest Food Bank seeks produce from farmers

Second Harvest Food Bank of Northeast Tennessee, which serves eight counties, will gladly accept any extra fresh fruit and vegetables. The produce will be redistributed to 200 food pantries, soup kitchens, children's programs and other non-profit charities that feed the hungry in the area. According to their official, "Our charities that we serve, they report to us every month how many people they serve. Over this last year, the number of people that receive food assistance...is 2,000 more people a month. Last year at this time, it was 25,000 people. This year it's 27,000 per month for food. Most people don't have a concept about that, but that's the way it really is." Any fresh produce donated to Second Harvest will be distributed that same week. For more information call Second Harvest at (423) 477-4053 or visit www.netfoodbank.org Ref. Kingsport Times-News Aug 4, 2008. (extract)

The reality of Minimum Wage

In May 2007, Congress approved legislation raising the minimum wage to $7.25 per hour by the end of 2009. The second phase of the increase - which raises the wage from $5.85 to $6.55 in July. Ten thousand workers in Tennessee and 5,000 workers in Virginia earned the minimum wage in 2007, according to the U.S. Bureau of Labor Statistics. A total of 70,000 people in both states earn less than the minimum wage last year because their incomes are based on tips, but they will also benefit from the increase. Minimum wage earners were paid a base salary of $10,712 last year before any wage increases went into effect. Thursday's increase will bring their base annual salary to $13,624.

But let's take another look. $10,712 in 1997 should be $14,604 in 2007 just to keep up with inflation, not counting exploding inflation of 2008. The inflation calculator shows $5.15 an hour in 1997 should be $6.74 in 2007.

$2.00 in 1974 would be $9.24 in 2007;
$3.10 in 1980 would be $8.75 in 2007;
$4.25 in 1991 would be $6.66 in 2007;
$5.15 in 1997 would be $6.74 in 2007.

Yet, minimum wage just went to $6.55 in 2008! $2.00 an hour in 1974 should be $9.24 in 2007. Even at $6.55 in 2008, minimum wage has lost almost one-third of its value since 1974 as of 2007. The working class is being hammered from all directions.

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