Brutal, just not as brutal: Northeast Tennessee job losses, unemployment spike not as bad as many spots

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Job losses have been steeper in other parts of Tennessee and nationwide compared to Northeast Tennessee.

(WJHL) – The number of people employed in Northeast Tennessee’s eight counties dropped by more than 16,000 between March and May, driving the area’s unemployment rate from 4.3 percent to 10.1 percent.

Those figures are ugly and they represent grave economic challenges facing many area families, but in relative terms they’re better than state and national numbers. They also compare favorably to the state’s longtime hotbed for job growth, the Nashville area.

Compared to the state, nation and “Northern Middle” Tennessee — representing 13 counties around Nashville and accounting for a third of the state’s workforce — this region has had the lowest percentage of people exit the labor force, the lowest percentage of job loss and the mildest rise in unemployment rate.

In March, 216,165 people in the region had jobs. That figure had dropped by 7.4 percent in May, to 200,103. The two largest counties had seen decreases of 8.4 percent (Sullivan) and 7.9 percent (Washington). Smaller decreases in the area’s smaller counties accounted for the 7.4 percent total.

The region’s two largest counties have shed more than 10,000 jobs between them in two months, even after a slight May bounceback from April.

Statewide, job numbers were off 9.0 percent, while they dropped 11.3 percent in the Nashville region and 7.9 percent in the Knoxville region. Nationally, almost 18 million fewer Americans were employed in May compared to March, a decrease of 11.4 percent.

That translated into smaller increases in the unemployment rate regionally as well, particularly since labor force was impacted less.

The region’s jobless rate in March was 4.3 percent, while in May it stood at 10.1 percent. That’s a 135 percent increase.

The red-hot Nashville market, meanwhile, saw a 283 percent increase in its unemployment rate, from 2.9 percent to 11.1 percent. The state’s rate was up 197 percent (3.7 to 11.0).

Nationally, the 13.0 percent May unemployment rate was 189 percent higher than the 4.5 percent March rate.

Retreat to rural ahead?

The numbers are all relative, and every community is suffering economically. Larger urban centers have generally fare worse since the COVID-19 pandemic began laying waste to the economy.

The relevant question is whether Northeast Tennessee, which has long been falling behind other parts of the state in job growth, will see more than a temporary cushion from the current pain or whether the region can outperform its recent past when recovery settles in.

Long-touted quality of life, low cost of living and other apparent advantages to Northeast Tennessee and Southwest Virginia yielded little in the way of growth after the Great Recession.

The Tri-Cities lagged the rest of the state and the U.S. when it came to labor force growth (and job growth) after the Great Recession.

What it will take to capitalize on the region’s assets and reverse stagnation and decline — in the way of marketing social capital, economic development and government structure and the like — is a question for regional leaders to sort out.

Whether even the best strategy and regional collaboration can make much difference is unknown. A late April Brookings Institution study on what post-COVID America might look like referenced a prediction that cities will have difficulty recovering from “temporary migration of some urban dwellers to less dense areas to achieve social distancing.

“The assumption is that as we navigate a recession, such density-driven out-movement will become more permanent, irrespective of the many amenities and agglomeration economies urban centers have to offer,” the report states.

Over and against that, the Brookings study points out that after the Great Recession it was urban areas that thrived the most. And it says “Gen Z” may ultimately call the shots on whether out-migration could truly benefit areas such as Northeast Tennessee and Southwest Virginia.

That generation is well-educated, racially diverse and has strong urban roots, the study says.

“(If) they follow in the footsteps of millennials during a similarly dim period, they could help to invigorate city growth—especially if opportunities dry up elsewhere.”

News Channel 11 will follow the data regardless where it leads.

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