Since the recession started, the staff of the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) has worked to keep abreast of the situation and keep Tennessee decision-makers informed, the organization announced.
“As a means of communicating this information, TACIR is collaborating with Middle Tennessee State University’s Business and Economic Research Center to provide a website, mtsu.edu/berc/tacir, to track the state’s economy during the recovery from the recession that began in December 2007,” the groups’ website states. “The site allows the reader to follow labor-force status including employment and unemployment numbers, housing data including a housing price index and construction activity, and sales tax collections.”
The National Bureau of Economic Research (NBER), a private, nonprofit research organization that includes academic and non-academic economists, dates the expansion and contraction of the U.S. economy. NBER has dated the latest recession as beginning in December 2007 and ending in June 2009.
“While the recession may have ended in 2009, satisfactory job growth has eluded the national and most local economies,” the report continues. “To follow the progress of the Tennessee economy, indicators of economic activity are tracked going back at least until 2007.”
Tennessee Gov. Bill Haslam released the Jobs4TN plan earlier this month as a road map for the future of the state’s economic development.
According to a report published in Tennessee’s Business Spring 2012 issue, the plan focused the efforts of the state’s Department of Economic and Community Development on strategic business clusters where Tennessee has a distinct competitive advantage.
“Jobs4TN emphasized aiding existing Tennessee businesses to grow and expand in addition to adding resources and senior leadership talent to accomplish the long-standing goal of recruiting new businesses and jobs to the state,” the issue states.
According to the publication, the Jobs4TN plan lays out the Haslam administration’s economic development strategy resulting from a review of the department of Economic and Community Development, focusing on: prioritizing the strategic recruitment of target industries; assisting existing Tennessee businesses in expansions and remaining competitive; supporting regional and rural economic development strategies; and investing in innovation and reducing business regulation.
“My top priority is for Tennessee to be the No. 1 location in the Southeast for high-quality jobs,” Haslam said. “Our Jobs4TN plan is a blueprint for doing just that. By leveraging our existing assets in each region, we will be able to attract new businesses to the state while helping our existing businesses expand and remain competitive. We will also be making significant investments in innovation to position Tennessee as a national leader well into the future.”
In 2010, expansion of existing business accounted for nearly 86 percent of new jobs created in Tennessee, the report states.
The mining, logging and construction industry in the Nashville Metropolitan Statistical Area experienced year-over-year employment growth in January and February at 12.2 percent and 8.2 percent respectively, data from BERC shows.
Professional and business services witnessed growth during the same time period, with 7.6 percent in January and 5.9 percent in February. Most industries showed modest growth with the exception of non-durable goods, which shows a 2.3 percent year-over-year decrease in January and 1.9 percent decrease in February. Wholesale trade, information and government also experienced decreases during the same time period.
David Hayes, an adjunct professor at MTSU who serves on the Tennessee Workforce Development Board, discussed Job Creation: What Really Works? in the issue.
He writes, “In publishing, editors often speak of repurposing articles from past issues of magazines. They will pull them from the archives, dust them off, update some of the words and all of the illustrations and data, and then push them out to the public as if they were the newest thing.”
“That’s a lot of what we’re seeing now – that plus a lack of the most basic knowledge of economics. It could spell trouble, or one of these proposals may work, or maybe we’ll just wait long enough for the economy to fix itself,” he said, suggesting that part of our current unemployment is structural, not cyclical, and that the solution is centered in the marketplace, not in Washington.
Hayes noted the role of the government as crucial.
“Whether you believe the government should add capital into the system to stimulate the economy or remove regulations that may be restricting the market, you can’t avoid its importance,” he said.
What does stimulus money really do?
“If you give a large amount of cash to your cousin who is too much in debt to buy necessities, he will buy some groceries, but mostly he will pay bills. This may be good for the person he owes, but he still doesn’t have an income,” Hayes continued. “If the person he pays doesn’t have to pay it forward, he may spend it, but if he has sufficient resources, then the stimulus money will just sit there until some good reason to invest it comes along.”
Without a reason to do otherwise, Hayes says, stimulus dollars will inevitably end up in a wealthy person’s or company’s corner. If there were a good reason to do otherwise, there would be no need for a stimulus.
“What is missing from this approach is demand,” he said. “If you can create demand and need government help to create supply, the tax code, guaranteed loans, and other incentives move the market toward satisfying the demand.”
To read more about BERC or Tracking Tennessee’s Recovery, visit mtsu.edu/berc.