(WJHL) – As he reviewed an array of less-than-stellar data about the region at an economic summit in September, East Tennessee State University professor Jon Smith warned against comparisons between the Johnson City and Kingsport-Bristol metropolitan statistical areas (MSAs).
The most accurate “compliment” an outside observer might give to Johnson City in comparison to Kingsport, Smith said, would be “well, you’re not nearly as ugly as your brother.”
Throw the MSAs’ cousin, Southwest Virginia, into the mix and the regional picture looks even worse. Smith addressed the numbers in a recent interview.
“The numbers that I have looked at and my colleagues have looked at that cause us concern are relative to the other communities not only in Tennessee but in the region,” said Smith, who oversees ETSU’s Bureau of Business and Economic Research.
The numbers are indeed grim across a wide range of indicators. From labor force and population to per capita “real GDP” growth and funds deposited in banks, the region has lagged other MSAs, its respective states of Tennessee and Virginia, and the nation during this decade.
“You look at the numbers, and even though there are positive short-term trends, it’s concerning — deeply concerning,” Smith said.
Smith said regional growth has been ” relatively modest, certainly compared to some of the more robust MSAs in the region like Chattanooga, like Knoxville.”
As goes the population, so go productivity, workforce and capital
Smith said the region’s growth in “real GDP,” a measure of economic output and productivity, has also lagged compared to most metro areas with which the Tri-Cities would compete for jobs, retail development and other growth.
“When you take things like labor force and you add that in, which reflects a productive capacity of the community, and you look at one measure of community wealth, which is gross domestic product per person, we look less successful than many of the other MSAs in our state and in our region.”
Tennessee’s labor force has grown by 5 percent since 2010. Nationally, that number has ticked up by 5.3 percent and Chattanooga’s workforce has grown by 4.7 percent and Asheville, N.C. has 11.7 percent more workers than it did in 2010.
Locally, the Johnson City MSA has seen a 4.1 percent decline and the Kingsport MSA has lost 5.3 percent over the same period.
Look north to the 10 Virginia counties from Grayson and Smyth west to Lee and the numbers are downright distressing. Overall, the workforce there has declined by 9.8 percent since 2010, from 140,042 to 126,342.
The worst figures are in the Lenowisco Planning District comprising Lee, Wise and Scott counties and the city of Norton., which has seen a 17 percent drop. Compounding the problem is the area’s labor force participation rate, which is by far the lowest of any region in the state, meaning fewer working-age people are either working or looking for work. For example, Wise County’s rate fell from 56 percent in 2010 to 41.9 percent last year, while the state’s overall rate is 65.6 percent.
Yet the area still maintains unemployment rates that, while low by historic standards, are among the highest in Virginia.
When population shrinks and labor force and employment decline, capital flight often follows. That’s reflected in shrinking deposits in the region’s banks and other FDIC-insured financial institutions.
All the declining numbers show the region has quite a hill to climb, Smith said. But glimmers of hope exist. Population decline has slowed the past few years, and Washington County, Tenn. has added almost 6,000 people, or 4.6 percent to its population since 2010. Sullivan County lost 600 people between 2010 and 2016 but has gained 1,400 since.
Smith said labor force numbers also appear to be bouncing back some the past few years. “Where we are now relative to where we were in 2016 is a much more positive picture.”
The area is at a crossroads, Smith said, and without a greater push toward regionalism, the chance of those barely positive trends reversing are higher. He cited his home metro of Meridian, Miss., which hasn’t taken a regional approach to economic development and has seen steady population decline.
“If you think things are going to get better and you don’t do anything, trust me, I’ve seen it go the other way,” Smith said.
Conversely, the Tupelo, Miss. metro has experienced steady growth since 2000 and has practiced strategic regional economic development.
That won’t happen here without everyday people buying into a vision that extends beyond economic development to environmental sustainability and community health, Smith said.
“We have some visionary community leaders. I can’t put words in their mouth (but) I think they are trying to influence the most important step, which is the individual resident in the community.”