Tennessee may not sport the worst record in the country for high unemployment, but the Volunteer State and its neighbors make up a regional pocket where lots of people are having a hard time finding work.
Five of 10 states with the highest unemployment rates in the U.S. touch Tennessee’s borders. Of other nearby states, Virginia, home to many federal employees who work in and around the nation’s capital, is the only one among those states with the lowest jobless rates in the country.
Gov. Bill Haslam reasons that the high level of joblessness is related to low college graduation rates.
“If you look at this recession, it’s hit particularly hard on those folks with lower education attainment. Even in Tennessee, if you have a college degree, unemployment is 5 percent or less. If you don’t have a high school degree, it’s over 20,” he said, citing figures from the Bureau of Labor Statistics.
“I think if you compare college graduation rates across the country … by and large, graduation rates are lower in the South, and that’s been part of the issue.”
There’s some truth to that.
According to U.S. Census data, Tennessee and half of its neighboring states have both lower percentages of adults with post-secondary degrees and higher unemployment rates when compared to the nation’s average. Those states include Alabama, Georgia, Kentucky and Mississippi.
Arkansas and Missouri both have fewer adults with some sort of college diploma but their unemployment rate is lower than the U.S. average of 9.2 percent. North Carolina and Virginia have graduation rates that meet or exceed the country’s 34 percent average, although North Carolina still has a high percentage of jobless workers.
Haslam’s assessment was echoed one Tennessee economist.
“The skill issue is one that’s critical,” said Mhurat Arik, associate director of the Business and Economic Research Center at Middle Tennessee State University. “It may not be in the commonly used unemployment rate, but when you look at the broader picture … many don’t have the educational skill to perform in the current market.”
Add that to a lack of certainty among business owners in the economy’s recovery, and you have a recipe for persistently high unemployment in the South, Haslam said.
Tennessee’s June unemployment rate was 9.8 percent and has been gradually rising for three months.
In fact, Tennessee’s employment picture hasn’t been all that rosy for quite some time, going back well into former Democratic Gov. Phill Bredesen’s time at the helm.
But that shouldn’t negatively reflect on Bredesen’s administration, Tennessee’s top Democrat in the state House of Representatives told TNReport this week.
“Those jobs lost are because these companies have exited us for this super-cheap labor,” said Rep. Craig Fitzhugh, D-Ripley. “We lost those manufacturing jobs, and we’re in that downturn of trying to replace those jobs with the new 21st-century jobs.”
Growth in white-collar jobs — which have helped drive down other states’ unemployment numbers — aren’t making making much of a dent in Tennessee’s joblessness rates, according to Chris Cunningham, a statistician for the U.S. Bureau of Labor Statistics.
Before the recession, Tennesseans held 333,700 jobs in industries like architecture, engineering and businesses that generally require higher levels of education. As of June, there were 26,000 fewer white-collar jobs, although that number is slowly shrinking.
Employment in the transportation industry is beginning to expand, but it’s still at pre-recession levels. Meanwhile, growth in manufacturing is stagnant as communities watch companies like Goodyear pack their bags and hit the road.
“Any growth that you’re having is not very strong. Until some of these larger sectors start to really take off, the unemployment rate is going to stay pretty high,” Cunningham said.
From May to June the total number of employed Tennesseans fell by 3,900 people, according to the state Department of Labor and Workforce Development. However, an additional 1,800 people joined the labor force.
Indeed, more people are moving to Tennessee or re-entering the labor force looking for work, said Arik. Those additions are creating a larger pool of workers seeking jobs, driving the rate up.
The state’s jobless rate hit 10.8 percent in the summer of 2009. Since then, it’s dipped as low at 9.4 percent last fall.
Nearby states are seeing much of the same trend, but states in the West and Midwest — like the Dakotas, Nebraska, Wyoming, Iowa, Kansas and Minnesota — all have relatively low unemployment rates.