When Unemployment Becomes Right-Sizing
by Lewis Loflin
Update 2015. The update on the Tri-Cities labor force and continued job losses for 3rd. quarter 2014 is at the bottom. Sadly I was proven right again that crony capitalism doesn't work.
July 17, 2009 (AP) The June jobless numbers are out for Tennessee, and the unemployment rate grew slightly last month. The unemployment rate for June was 10.8 percent. That is a .1 percent increase from May, where the rate was 10.7 percent. According to politicians this is good because it wasn't as big as it could have been. This failed to mention those dropped from the rolls due to benefits running out and failing to factor in thousands reduced to part-time or forced to take "voluntary" unpaid leave. The real unemployment rate is between 15% to 20%.
May 14, 2009:
The Tri-Cities' job market lost a "staggering" 8,303 jobs during the first quarter, when compared to the first three months of 2008, states a report released today by East Tennessee State University. Just 407 jobs were lost in the fourth quarter of 2008, according to the report from ETSU's Bureau of Business and Economic Research.
After a weak fourth quarter, the market "imploded" in January, February and March, driven by large losses in manufacturing and construction jobs, the report states. The jobless rate rose to 8.6%. Job growth occurred in education & health, professional & business services, government, and retail trade. Large employment declines were reported by durable manufacturing, construction, and nondurable manufacturing. Smaller job losses occurred in wholesale trade, other services, information, finance, leisure & hospitality, and transport & utilities.
Employment in the small mining sector was unchanged. In other words government grows and vulnerable manufacturing jobs continue to disappear. This is according to Steb Hipple economist at East Tennessee State University.
May 18, 2009:
Bush Hog Manufacturing in Washington County, Tennessee will slam the doors in Telford. They will be gone by July 4. Bush Hog notified the Tennessee Department of Labor and Workforce Development about the closure today. 142 employees will join the tens of thousands across the region looking for a job.
June 18 2009: Region still getting hammered on jobs. The Times-News is reporting another pending plant closure this time in Johnson City. German company Robert Bosch will dump 140 workers, another victim of the declining auto industry. As usual local economic development hacks were caught with their pants down. Economic Development Board Director P.C. Snapp says, "This came sort of out of the blue. On one of our visits about two months ago we went there, and production was great. They had the manager there and he was pretty confident."
The company claims the reason for the shutdown as "cost competitiveness and the layout of Johnson City's facility." In other words not enough cheap labor or corporate welfare they could get somewhere else in my opinion. This is a union plant, which I'm sure local officials would like to be rid of. In NETWORKS the "Sullivan Partnership"
Chief Executive Officer Richard Venable seemed upbeat if not delighted it seemed to me on all the job losses during an appearance on local TV back in April. He called this economic meltdown "right-sizing" and claimed this would leave Sullivan County in a better position to compete globally. I guess an unemployment rate of 10.7 precent in Tennessee creates a more third-world labor climate in Tri-Cities.
It must be really working out well at NETWORKS. They have nothing to show since that TV appearance in April according to the Times-News June 18, but new jobs are on the horizon they claim. They claim to have created all kinds of jobs in the past, but refuse to disclose locations, details, pay scales, or how they derive these figures. I'm still waiting for an answer Mr. Venable, formally of the Sullivan County Commission. Keith Wilson publisher of the Kingsport Times-News is the present chairman.
In June Utility Trailer announced it is planning to rehire about 160 workers they canned earlier in the year. They are located in Washington County Virginia. Politicians and economic developers called this "new job creation."
Job Loss Update Tri-Cities Bristol 2014
Update for 2015 quoting Dr. Steb Hipple Tri-Cities Labor Market Report East Tennessee State University - Third Quarter 2014 where job losses have continued for eight consecutive quarters:
Existing labor market trends dominated the Tri-Cities Consolidated Statistical Area (CSA) in the third quarter. Compared to the same period in 2013, regional employment was lower by 1.7% to 218,244, while unemployment fell 10.3% to 16,664 as discouraged job seekers continued to leave the regional labor force. The summer unemployment rate for the metro area was 7.1% (compared to 7.7% a year earlier). With the labor force shrinking by 2.4%, the falling jobless rate is a sign of labor market weakness.
During the July to September period, employment was lower in all three cities - falling 2.2% in Kingsport, 2.0% in Johnson City, and 1.2% in Bristol. Matching the regional pattern, large numbers of unemployed workers are exiting the labor market in each city. This has lowered the jobless counts, contracted the labor force, and reduced the unemployment rates. The percent of workers unemployed was 7.0% in Kingsport, 7.1% in Johnson City, and 7.1% in Bristol. As in the metro area, the lower rates in each city reflect labor market weakness.
Return History, Causes of Poverty in Southwest Virginia
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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