Employment figures mask real truth

Kingsport Times-News August 17, 2004

"Tri-Cities Employment Numbers Up'' (Aug 11) is more nonsense to allow our politicians to ignore the real issues. The unemployment is calculated by methods if used in a corporate setting that would lead to arrests for fraud. Only those actively collecting unemployment benefits are counted. When the benefits run out, they disappear from the rolls. Wait long enough, 100 percent employment. The numerous "early retirements" are just layoffs the figures ignore. They also treat a part-time job held by children or retirees the same as real jobs, ignoring the massive amount of underemployment and underpay in this area. When a good job paying $15 an hour becomes two part-time jobs paying $6 an hour, to quote Steb Hipple, "the overall payroll is shrinking despite the number of jobs."

Also according to Dr. Hipple, a good job creates an additional 1-2 jobs in services. The loss of another 450 jobs at Quebecor will cost an additional 500 other jobs. Most of these 2,700 new jobs are mainly low-wage services and temp agencies. Temp agencies create scores of new jobs. Hire 50 people for 89 days, lay them off and hire 50 more. Thus we created 100 new jobs.

The real employment rate is directly reflected in the poverty rate (between 20-30 percent in the Tri-Cities). Other indicators are free lunch (46 percent in Bristol), and world records at Rural Area Medical (RAM) in Wise. Seventy-five percent of those on food stamps are employed. Quoting Diane Wise of the Tennessee Commission on Children and Youth, "We've had so many plants and industries closing down, and people have moved to lower-wage jobs. We do not have the high-paying jobs that we need in this area.''

That's the reality we must deal with and phony accounting on employment won't change that.

Lewis Loflin Bristol, Va.

Tri-Cities employment numbers up

August 11, 2004 MATTHEW LANE

KINGSPORT - The Tri-Cities region - from April to June - saw the strongest growth in employment levels and the lowest unemployment rate in 18 months, according to a labor market report released Tuesday.

Steb Hipple, professor of economics at East Tennessee State University, released the Tri-Cities Labor Market Report for the second quarter of 2004 on Tuesday.

According to the report, the labor market in the Tri-Cities region registered a strong gain in employment, which marked a second quarter of consecutive job growth in more than a year.

Hipple said regional employment increased by 1.3 percent to 220,601, a gain of more than 2,700 jobs compared to a year ago. The number of unemployed workers decreased by 14.6 percent to 11,516, while the jobless rate for the Tri-Cities metro area during the April-to-June period was 5 percent compared to 5.8 percent a year ago.

All three cities saw significantly higher employment levels during the second quarter, Hipple said.

Bristol saw the greatest increase with 1.3 percent, followed by a 1.2 percent gain in both Johnson City and Kingsport.

In line with regional trends, all three cities reported much lower unemployment levels, Hipple said.

The second quarter jobless rate was 4.8 percent in Johnson City, 4.9 percent in Kingsport, and 5.4 percent in Bristol (compared to the regional rate of 5 percent).

Hipple said the report shows strong economic performance across the board.

"The national economy is finally generating enough new jobs to reduce the level of unemployment, and the strong national performance has helped the regional economy," Hipple said. "After a dismal 2003, employment is rising and unemployment is falling in the metro area and the individual cities."

Hipple said the most significant improvement is that job growth is spreading to a majority of the industrial sectors at the national and regional levels.

The national economy dropped to a 3 percent growth rate in the second quarter, and Hipple said this could delay further improvements in national labor market conditions.

"Three percent is the long-term growth rate, and that means you're creating enough new jobs to absorb both productivity increases as well as account for population growth," Hipple said. "If you grow slower than 3 percent, you're going to have a shortfall in the number of jobs created."

Hipple said there are still serious weaknesses in the labor market situation. In particular, the growth rate of the national economy has slowed, and the critical manufacturing sector continues to lose jobs.

"Real growth in the second quarter is below what was expected. We hope that it's just a one-quarter blip and we'll be on a stronger growth pattern in the third quarter," Hipple said. "And manufacturing is continuing to lose jobs, but we may turn the corner there soon."

Hipple said the business outlook for the nation and the region can be raised to "positive."

"The economic recovery is well under way and is expanding to include more industrial sectors and regions," Hipple said. "Most analysts expect that the national growth rate will rebound in the third quarter and that employment growth will expand to the depressed manufacturing sector by this fall.

"With this in mind, the outlook for the Tri-Cities region is very good over the remainder of the year."

The job-quality debate

Are newly created jobs the equivalent of those that were lost?

By Lou Dobbs
CNN

(CNN) -- The domestic debate this election season has centered on job creation, with both candidates using Labor Department statistics to support their own arguments. But now that the economy has been added nearly 2 million jobs since last summer, economists are looking critically at the quality of these new jobs, to determine whether they are paying less than the ones we've lost.

A new study from the University of California at Berkeley, using the most detailed classification of jobs and distribution of wages so far found that, since 2001, job categories that are growing pay an average of 10 percent to 12 percent less than jobs categories that are shrinking. A new full-time position would therefore pay about $4,000 a year less than one of the jobs that were lost.

Compared with overall job creation, data on the quality of jobs are not as straightforward. There are no official government statistics on the pay of jobs lost versus the pay of jobs gained. That's why there has been a sudden flurry of studies rebutting one another on the issue of job quality.

"The shortcoming thus far has been to not do a full, comprehensive analysis of the jobs," said Arindrajit Dube, an economist at UC Berkeley's Institute of Industrial Relations and the author of the latest study. "But if one doesn't do it comprehensively, you can cut it different ways and draw different conclusions."

A June study by USA TODAY and Economy.com concluded that lower-wage jobs were growing faster than higher-wage jobs, based on analysis of lower and higher-paying industries. Morgan Stanley's chief global economist, Stephen Roach, drew similar conclusions in his July study by industry.

It's possible, however, that generally lower-paying industries, such as the restaurant industry, are adding more higher paying jobs such as chefs and managers, researchers at FactCheck.org noted. In a July study, FactCheck.org used new Bureau of Labor Statistics data to conclude that a more detailed breakdown of occupations within industries suggests that job quality is actually increasing.

The Economic Policy Institute countered by using the same BLS data to arrive at the opposite conclusion. The FactCheck.org study forgot to weight its sectors by their contribution to overall employment, the EPI pointed out.

Dube's study attempted to overcome each of these flaws and anticipate others. He looked at both occupations and industries to create 440 job categories. Rather than just use average earnings, he looked at the entire distribution of jobs and the wages they pay. And to back up the findings, Dube showed his conclusions were consistent over various time periods within the nearly four-year scope of the study. The result, he said, is a clear picture of a wage gap between growing and shrinking jobs.

In one positive sign for job growth, however, Dube's study showed jobs in the middle sector, such as electronics manufacturers and clerical workers, have been recovering from large losses during the 2001 recession.

"The good news is that finally there seems to be some growth in jobs at the middle," Dube said. "But the bad news is that growth in jobs in the bottom third outpaces those in the middle by roughly two to one. The other bad news is that finally middle-wage jobs are growing, but that's typically at the expense of higher-paying jobs."

Add to this the past year's trend of stagnant wages, which Dube also shows in his study, and a difficult employment environment prevails. After all of the slicing and dicing of employment data, one conclusion is incontrovertible: this economy, despite strong economic growth, is still not creating a sufficient number of jobs, high paying or otherwise. Therein lies the challenge for the next administration, whomever is elected on November 2.

Tri-Cities gains 2,500 jobs in third quarter
11/17/2004

By SHARON CASKEY HAYES

The Tri-Cities gained nearly 2,500 jobs in the third quarter this year, marking the third straight quarter of employment growth across the region.

Meanwhile, the U.S. manufacturing sector began adding jobs for the first time in years during the quarter - a trend that could eventually trickle down to the Tri-Cities, according to the latest labor market report issued Tuesday by East Tennessee State University.

"The labor market nationally, with the turnaround in manufacturing, is one of the most significant events that has happened in a long time," said ETSU economist Steb Hipple. "It's the best national scenario we've seen in some time. And even without manufacturing gains here in the Tri-Cities, we are managing to create employment."

The Tri-Cities metro region - covering Sullivan, Hawkins, Washington, Carter and Unicoi counties in Tennessee and Scott and Washington counties in Virginia - reported a collective gain of 2,448 jobs in the third quarter, as employment increased 1.1 percent to 221,295.

Job gains were reported in leisure and hospitality services, retail trade, wholesale trade, government, construction and other services.

Job losses were felt in professional and business services, nondurable manufacturing, durable manufacturing and finance. Employment was steady in mining, transportation and utilities, information services, and education and health services.

Among the three cities, Johnson City posted the best employment gain with 590 new jobs in the quarter.

Kingsport gained 536 jobs in the period, while Bristol grew its employment base by 272 jobs.

The job gains were reflected in the region's unemployment rate, which dipped to 4.9 percent for the July-to-September period versus 6.1 percent a year ago.

The unemployment rate fell a whopping 25.62 percent in Kingsport to 4.74 percent in the third quarter.

In Bristol, the unemployment rate was 4.83 percent in the period, down 28.46 percent.

And in Johnson City, the unemployment rate declined 3.55 percent to 4.98 percent.

Nationwide, the economy gained 2 million jobs in the third quarter, up 1.5 percent from the year-ago period. The nation's unemployment rate fell 9.71 percent during the same time to 5.40 percent.

Hipple said the data reflects the best performance of the national labor market since the recession of 2001. Twelve of the nation's 14 industrial sectors posted job gains during the quarter. Only nondurable goods manufacturing and information services reported job losses in the period.

Hipple said the most significant development nationally in the quarter was the growth in durable goods manufacturing, which reported job gains for the first time in several years.

"In fact, the employment increase in durable goods is quite large, and it is one of the top industrial sectors for employment growth in the third quarter," Hipple said.

He said the job gain in durable goods manufacturing was large enough to offset job declines in nondurable manufacturing, allowing the nation's overall manufacturing sector to experience a net increase in employment.

"After years of decline and a loss of over 2 million jobs, the U.S. manufacturing sector is actually adding jobs," Hipple said.

Still, the local manufacturing sector - which consists mainly of nondurable goods - continued to post job losses during the quarter. Hipple said that could change once the nondurable goods manufacturing sector begins to post gains on the national level.

"Once the national turnaround in manufacturing reaches our area, we can expect an even further boost in labor market performance," Hipple said.

The labor market report is based on the 2003 Benchmark of the Current Population Survey of the U.S. Department of Labor. The report is available online at http://faculty.etsu.edu/hipples.

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