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Unemployment rate holds steady as economy remains sluggish

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Michael Phelps talks with Shay Stewart about a job with Ozburn-Hessey Logistics on Friday at a job fair. Phelps has been looking for work since mid-June when he was laid off from the Smyrna Water and Sewer Department. (Photo by M. Willard)
Unemployment in Tennessee has dropped more than 4 percent since the onset of the Great Recession in 2007, but newly released data shows national recovery to be sluggish.

Compared to the rest of the country, Tennessee is about average; The Volunteer State wasn't ranked in the top increased or decreased unemployment rate changes.

Tennessee Commissioner of Labor and Workforce Development Karla Davis announced Tennessee's unemployment rate for July increased to 8.4 percent, up from the June revised rate of 8.1 percent. The national unemployment rate for July 2012 was 8.3 percent, 0.1 percentage point higher than the June rate.

State employment and unemployment data released last week by the Bureau of Labor Statistics show that the continued lack of momentum in the national labor market is translating into sluggish job growth and slowly rising unemployment for the majority of states, according to a report by David Cooper of Economic Policy Institute.

"Job growth throughout the states over the preceding three-month period (April 2012 to July 2012) was mixed, with 32 states and the District of Columbia adding jobs and 18 states experiencing job loss," he wrote Friday. "However, even the job growth in states that gained jobs over this period was not strong enough to prevent increases in the unemployment rate for all but six of these states (California, Kentucky, Massachusetts, North Dakota, Ohio, Oklahoma and Utah) and the District of Columbia."

Three states – California, Nevada and Rhode Island – continue to have unemployment rates above 10 percent. The number of states with unemployment rates between 9 percent and 9.9 percent rose from five states in June to seven in July.

While nearly all states have added jobs and reduced unemployment over the past year, the most recent figures underscore the risk of letting the nation's economy slip back into neutral.  Without action at the national level to accelerate lagging growth, state policymakers will face an uphill battle to bring down unemployment levels, Cooper said.

Rutherford County may be in better shape than the rest of the state, as two big employers – Murfreesboro's Amazon.com warehouse and Smyrna's Nissan plant – fill newly created posts.

Jobseekers in Middle Tennessee began applying at Tennessee Career Centers in early-August for jobs at Amazon's fulfillment centers in Lebanon and Murfreesboro. These new fulfillment centers will fill customer orders for Amazon and the many third-party sellers from Tennessee and around the country that use fulfillment by Amazon.

Amazon is working with Tennessee Career Centers to conduct initial screenings to fill several hundred full-time positions at their new facilities.  Interviews will begin right away, so applicants are encouraged to apply immediately. The facilities are expected to begin operations this fall.

"We're very excited to partner with Amazon to help employ qualified Tennessee applicants at their fulfillment centers," said Labor Commissioner Karla Davis. "This is a tremendous opportunity for our community."

Warehouse associates pack and ship customer orders and are empowered to troubleshoot problems. According to Tennessee's Department of Labor and Workforce Development website, ideal candidates possesses a strong work ethic, attention to detail, ability to meet deadlines, and a commitment to customer service as it relates to product fulfillment. Warehouse associates are expected to understand all aspects of production and adhere to strict safety, quality, and production standards.

Nissan announced a week ago that it would fill more than 50 maintenance technician positions at its vehicle assembly plant and new battery plant.

The company invites candidates with a minimum of five years experience and a background in programmable logic controllers to submit their resumes online at www.nissan.jobs.

Local home sales have been improving and inventory is decreasing, but until new home construction gets past the planning stages, Rutherford County won't experience the surge of construction employment.

According to an analysis by the Associated General Contractors of America of Labor Department data, construction employment declined in 31 states from July 2011 to July 2012 and in 28 states in the past month. Tennessee fared better than most with the addition of 700 construction, mining and logging jobs combined for a 0.6 percent point gain from June to July and 4.1 percent year-over-year increase.

Association officials noted that construction employment decreased in the majority of states as public construction funding continues to shrink, offsetting gains in homebuilding and nonresidential construction.

"Public construction cuts in particular are taking their toll on construction employment in many parts of the country," said Ken Simonson, the association's chief economist. "With economic growth remaining sluggish, there is a chance construction employment will begin to slip in even more places."

Additionally, association officials cautioned that construction employment would continue to suffer from the impact of ongoing cuts to public construction budgets. Worse, if economic growth slows as businesses worry about future tax uncertainty, private demand for construction is likely to lag.

They urged officials in Washington to act quickly to provide employers with tax certainty and enact long-delayed infrastructure measures for water and other systems.

"The longer Washington waits to act on vital tax and infrastructure measures, the more construction workers will lose their jobs," said Stephen E. Sandherr, the association's chief executive officer. "The best way to boost employment and help the economy is to invest in basics like clean water and set predictable tax rates."

In last week's Jobs Picture, Economic Policy Institute economist Heidi shirehouse detailed analysis shows that this month's bright spot dims as racial and ethnic minorities continue to be hit particularly hard by unemployment.

Unemployment in July was 14.1 percent for African American workers and 10.3 percent for Hispanic workers, compared with 7.4 percent for white workers.

Education and gender also factor into unemployment rates, according to the report.

Unemployment in July was 8.7 percent for those age 25 and older with a high school degree but no additional education, and 4.1 percent for those age 25 and older with a college degree or more.

Among workers younger than age 25 who are not enrolled in school, unemployment over the last 12 months averaged 21.0 percent for those with a high school degree, and 8.2 percent for those with a college degree (annual averages are used here since seasonally adjusted data are not available for workers under age 25 by education).

"These numbers show that young workers have been particularly hard hit by unemployment," Shierholz reported. "They also show that workers with higher levels of education have lower unemployment. However, workers at all levels of education have seen their unemployment rates roughly double since 2007, showing that demand for workers has dropped at all levels of education."

Men saw a much larger increase in unemployment than women did during the recession, but have seen stronger improvements in the recovery.

The unemployment rate reached its pre-recession low in late 2006 and early 2007, at 4.4 percent for men and 4.3 percent for women. Male unemployment peaked at 11.2 percent in October 2009 and has since fallen to 8.4 percent.

Female unemployment continued to rise for about another year, when it peaked at 9.0 percent in November 2010, and has since fallen to 8.1 percent.
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Business, Jobs, Taxes, Tennessee, Unemployment
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Members Opinions:
September 13, 2012 at 10:24am
It would be interesting to see stats on discouraged workers who dropped off the map. Most people who talk about unemployment rates neglect the fact that discouraged workers are not counted in the labor force. So claims like “unemployment went from 8.3 to 8.1 percent,” are entirely misleading because the shrinking the total labor force and skewing the true unemployment. I wonder how many people stopped looking in Tennessee?

Any government employment is not “job creation.” It's wealth redistribution with possible return, assuming the projects aren't a total waste. Solyndra anyone? Sandherr complains that the federal government isn't redistributing subsidies for construction workers to keep their jobs. The last thing we need to be doing is spending more tax dollars on building projects that aren't demanded by the market. Creating jobs for the sake of creating jobs is extremely irresonspible.

“Education and gender also factor into unemployment rates, according to the report.” Isn't that the purpose of education? To broaden your employment opportunities? Gender factors in, because men and women make different choices with regards to employment. Ever seen a female plumber? Me neither. Women typically go into fields heavily subsidized by the government. Social work, teaching, nurses, cafeteria ladies? So it's not surprising when men have slightly higher unemployment.

If you want to create jobs, especially for minorities and other unskilled laborers, then remove minimum wage and hiring penalties.
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