published Tuesday, December 7th, 2010

Manufacturing jobs shrink while health care grows

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    Staff File Photo by John Rawlston/Chattanooga Times Free Press James Turner, center, works on an assembly line of hydraulic excavators at the Komatsu America International manufacturing plant on Signal Mountain Road.

Chattanooga, once billed as "the Dynamo of Dixie" for its manufacturing strength, shed nearly one of every three factory jobs over the past decade — most of them during the recession that began crippling the economy in 2007.

A new economic study by the Ochs Center for Metropolitan Studies said Hamilton County suffered its worst job losses in modern times during the recent recession, losing 18,499 jobs in manufacturing, transportation and construction from 2001 through 2009.

"In many ways, this was a lost decade for job growth, not only in the hardest-hit areas like manufacturing and construction but in a whole array of other sectors of the state economy," said Matt Murray, a University of Tennessee economist who serves as associated director of the Center for Business and Economic Growth in Knoxville.

"The length and depth of this wrenching recession, combined with the jobless recovery we had following the last recession in 2001 and 2002, created a perfect storm," he said.

But while most industries were battered by adverse economic winds of change, jobs in heath care grew at a very healthy pace, jumping by nearly 53 percent, or 7,525 jobs in Hamilton County, the report shows. And so far this year, manufacturing employment is showing signs of growth both in Chattanooga and across Tennessee.

"We're becoming a much more diversified economy than the industrial town we once were in Chattanooga," said David Eichenthal, president of the Ochs Center for Metropolitan Studies, which will release its study on the Economy of the Chattanooga Region today. "The strength that we have because of VW, Alstom, Wacker Chemical and others is that we're demonstrating an ability to retain certain manufacturing jobs in a way that other communities have not.

"But for communities like ours that were once heavily manufacturing based, the question becomes: What are you doing in addition to your industrial roots to promote your economy?" Eichenthal said.

The potential of locating distribution facilities in Chattanooga and Cleveland with nearly 1,500 full-time jobs — and the prospect of hundreds of other part-time and related transportation jobs in the area — illustrates Chattanooga's success in the service and retail sector to balance its manufacturing strength, some economic experts say.

"I think Chattanooga is ahead of the curve in dealing with the changing job market compared with most communities," said Ron Harr, a senior vice president at BlueCross BlueShield of Tennessee and chairman of the Chattanooga Area Chamber of Commerce.

"Certainly, manufacturing is important to Chattanooga and will continue to be with Volkswagen others expanding here," he said. "Health care is on the rise with people living longer and there is an upside to that in terms of employment opportunities."


But many workers displaced by the drop in manufacturing are still trying to adjust to the new economy.

Dale Little, 61, fears his career as a saddle maker ended last year when Big Horn Saddlery shut down and ended his job of 14 years.

"Nobody is hiring right now and I'm just hanging on now another eight months until I can get my Social Security benefits," he said Monday outside the local unemployment office.

Bruce Buntain, 44, lost his job as a national sales account manager in September when appliance equipment maker Kingston Inc. closed its plant in Smithville, Tenn.

"I was hoping we were going to make it because I know the job market is rough and it's very hard to be unemployed looking for work right now," Buntain said after applying for work at the Tennessee Career Center in Brainerd. "But as more and more appliance manufacturers have moved offshore, there was a real whiplash effect on everybody in that supply chain."

In metropolitan Chattanooga, manufacturing employment grew by about 500 jobs so far this year, according to the U.S. Bureau of Labor Statistics.

But manufacturers report mixed results as the economy begins to recover, Chattanooga Area Manufacturers Association President Tim Spires said.

"There are some companies that are holding on and a few that are doing good, but there are a lot that are still struggling," he said. "Competition has really changed and companies have learned to do more with less. They're not likely to replace all of the jobs that have been shed even once the economy recovers."


Eichenthal said job opportunities are the best for those with an advanced education — either college degrees or technical school training in growing fields.

"Education is the best predictor of income — and whether a family falls into poverty," he said.

In the most recent data available from 2006 to 2009, the Ochs study found only 3.1 percent of those with a four-year degree have income below the poverty level. But among those without a high school diploma, 25.8 percent live in poverty, the report shows.

Those without a high school diploma were more than three times as likely to be unemployed as those with a college degree and a survey of area residents by the Ochs Center found the greatest job frustration was for those without a high school diploma.

In the past decade, the job losses in Hamilton County were concentrated in the private sector, where overall employment fell 6.2 percent. In contrast, government jobs grew from 2001 to 2009 in Hamilton County by 0.6 percent despite recent cutbacks, the Ochs study reported.

In the six-county Chattanooga metropolitan area, Hamilton County continued to pay the highest average annual salary to workers — $39,569 in 2009. Last year's average pay in Hamilton County was up 26.7 percent since 2001, or $1,725 when adjusted for inflation.

Dade County workers enjoyed the biggest average boost in pay from 2001 to 2009 with a 41.1 percent gain to $30,911, according to the Ochs Center's analysis of government wage data.

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sideviews said...

No wonder health care costs are out of control. What evidence is there that anyone in Chattanooga is any healthier than a decade ago. Indeed, by some measures we are less healthy than we were in 2001 when 7,000 fewer people worked in health care jobs in Hamilton County. The number of people working in health care is up nearly 53 percent since 2001 with no evidence of any improvements. People who complain about government inefficiency should look at our private sector health care industry. Arguably, it is the least efficient industry in America -- and getting worse every day. Where are the cost controls? Where in the market discipline? Where is BlueCross in trying to represent consumers in holding down costs? We're not that much older and sicker than a decade ago. Our economy can't survive simply on having everyone working on taking care of each other at doctor offices and hospitals.

December 7, 2010 at 10:25 a.m.
TeaParty330 said...

If you think health care is too big and expensive today wait until the government tries to make it free.

December 7, 2010 at 7:11 p.m.
sideviews said...

You create wealth by making goods, growing crops or digging minerals out of the ground. Unfortunately, those making things and generating wealth in factories and on construction work sites are losing jobs in Chattanooga. Those trading services around like in health care, information and food services are the only growth sectors in the employment market. That's not sustainable.

December 7, 2010 at 7:21 p.m.
fairmon said...

You got it sidevies. Wealth is only created through manufacuring, mining, farming or fishing. There is no way on earth to create wealth that doesn't fall into one of these categories. All others just move it around and skim some of it off. Chattanooga just kicked our businesses in the teeth again by increasing property taxes, sewer fee, water run off, permits and inspection fees and other less known to citizens. Our local government is close to being a socialist form of government.

December 7, 2010 at 8:26 p.m.
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