The month of May’s unemployment measurements were near record-book territory, not just across the State of Tennessee, but in Scott County as well.
Statewide, May marked the first time ever that 94 of the state’s 95 counties recorded unemployment rates below 5.0 percent, according to Commissioner of Labor & Workforce Development Burns Phillips. In Scott County, May’s unemployment rate of 4.2 percent was the second-lowest ever recorded — trailing only May 2001’s 3.9 percent.
In fact, May 2017 marked just the eighth month since the state’s unemployment records became publicly available in 1973 that Scott County’s unemployment rate was below five percent.
On the surface, those statistics paint a picture of a booming local economy. Yet, a plurality of Scott Countians will readily tell you that the economy here is anything but booming. An analysis of the numbers reveals that the truth is probably somewhere in the middle.
Rising employment vs. declining work force
There were 7,480 Scott Countians gainfully employed in May, according to the state’s data. That was up slightly from April, when 7,410 Scott Countians were working, and about 200 more Scott Countians were working in May than in January.
But for some added perspective, total employment in May 2017 trails total employment exactly one year ago. In May 2016, some 7,570 Scott Countians were at work — the highest total since the Great Recession tightened its grip on the region. Yet the unemployment rate in May 2016 was 5.8 percent, well above the current unemployment rate of 4.2 percent.
The reason is in the estimated total work force. In May 2017, the total work force in Scott County — a sum of the number of people who are gainfully employed and the number of people either receiving unemployment benefits or seeking work — was 7,810. That was down more than 200 workers from May 2016, when the local work force was estimated at 8,040.
Or, to put it another way: even though there were 90 fewer Scott Countians employed in May 2017 than in May 2016, there were also 140 fewer Scott Countians listed as unemployed — 330 in May 2017 versus 470 in May 2016.
The conclusion? A not-insignificant reason for Scott County’s falling unemployment rate is because people are dropping out of the work force.
A steady recovery
If, on one hand, Scott County’s unemployment rate is dropping because people are leaving the work force, the other hand reveals an undeniable positive trend in the local employment picture over the past five years.
Things hit rock-bottom in 2012. More than 1,800 Scott Countians were counted as unemployed in July of that year, and the unemployment rate hit 21.8 percent — the highest it has ever been in the modern era. By August of that year, total employment had bottomed out at 6,460 — the lowest it had been since the administration of President George H.W. Bush in the early 1990s.
But as 2013 began, something strange happened with the start of the new year. When the Tennessee Department of Labor & Workforce Development released its jobless numbers for January, Scott County’s total employment mysteriously jumped from 6,490 to 7,350 — an increase of almost 12 percent. The estimated local work force also jumped significantly, from 7,900 to 8,820, an increase of more than 10 percent.
Clearly, there had not been nearly 1,000 jobs added in Scott County in the span of just one month. Had the state reconfigured the way it was tallying its numbers? Had Scott Countians who were working outside the county been counting towards that county’s work force, and had that suddenly changed?
The Independent Herald reached out to the Department of Labor & Workforce Development at the time, but there was no clear answer for the dramatic changes.
Regardless, the number of working Scott Countians has risen by 130 — from 7,350 to 7,480 — since that time, even as the estimated local work force has shrank from 8,820 to 7,810.
And while the local manufacturing industry took a significant blow during the recession — for all intent and purpose, Armstrong closed its Oneida operation, and HBD Industries is a shell of its former self, to select but two — it has recovered somewhat in recent years. Takahata has undergone a series of expansions, is set for another one, and is currently hiring. JDS Technologies has also increased its work force while undergoing several expansions. Tennier Industries and Great Dane have maintained their work force, as well.
The best of times, the worst of times and somewhere in between
The late 1990s and start of the 2000s will forever be viewed as Scott County’s economic peak — at least until the local economy exceeds that level sometime in the future. The dot-com bubble was about to burst, and while the surge of tech jobs that had fueled that bubble might not have been found in Scott County, the prosperity had trickled down. In November 1999, Scott County’s estimated work force reached 9,440 — an all-time high. In May 2001, there were 8,620 Scott Countians at work — also an all-time high.
Armstrong was churning out Hartco-brand wood flooring at its Oneida plant and shipping it all over the world. It was a nationally-recognized brand; the same flooring that real estate mogul Donald Trump — the man who would later become president — had chosen for part of his famed tower in New York City. Jim Barna Log Homes, meanwhile, was billed as the world’s largest manufacturer of log homes. Unemployment was at historic lows. Some joked that there were as many fast food restaurants as churches in Oneida. Walmart had just opened its brand-new super center on the Four Lane, and no one envisioned at the time that the new store might soon lead to the closure of the town’s other major grocery, Food City.
It was a far cry from where Scott County had found itself just a decade and a half earlier. When coal went bust in the 1980s, more than one in every four Scott Countians were listed as unemployed. In July 1985, unemployment surged to 28.3 percent. Nearly 2,300 workers stood in the unemployment lines.
Things generally improved after that. There were setbacks — unemployment surged to greater than 18 percent in June 1992 in the midst of economic recession, for example — but the worst of times appeared to be in the rearview mirror for good.
As the ‘90s progressed, Scott County’s unemployment rate was in single digits more often than double digits — an accomplishment, however small it might have been. By the late ‘90s and early ‘00s, the unemployment rate was in single digits for 49 out of 52 months.
After the Sept. 11, 2001 terrorist attacks and the national economic recession that had already begun, Scott County’s economy never made it back quite to where it had been. But most who wanted a job continued to have one. When the Great Recession began in December 2007, Scott County’s unemployment rate had been in single digits for 53 consecutive months — a record length of time.
A little more than two years later, Scott County was rocked by news that Armstrong was shuttering its Oneida operations. A little more than two years after that, more than one in five Scott Countians were back in the unemployment column. Along the way, there was a hospital closure, the loss of Oneida’s oldest business — its Jellico Grocery warehouse — and an assortment of mom-and-pop establishments closing their doors for good.
Today, the local jobs picture isn’t nearly as bad as it was five years ago, in 2012, but also not as good as was 10 years ago, in 2007. Total employment is struggling to get back to where it was then, when just over 8,000 Scott Countians were still employed, and the work force is considerably smaller, down from 8,590 back then.
Across the board declines
While it is easy to point to Scott County’s declining work force as a defining reason for lower unemployment rates, former County Mayor Jeff Tibbals often took exception to that, pointing out that work forces are down across the board.
Tibbals was not wrong. Declining work forces are a trend across Tennessee and the nation. Part of that is due to the advancing age of America’s Baby Boomer generation. Other reasons can only be speculated.
Scott County’s work force since 2010, the point at which unemployment rates generally began to improve across the state, is down from 8,460 to 7,810, a decline of about eight percent. But compare that with some surrounding counties: Anderson County’s work force over the same period of time has declined by almost nine percent. Campbell County’s is down a whopping 15 percent, as is Fentress County’s. And the work force decline in Morgan County is closer to 16 percent.
In other words, Scott County’s work force has declined in number as its unemployment rate has improved, but the decline here is less than any of the counties with which Scott County shares a border — in some cases, substantially less.
Also interesting is the number of employed workers in those same counties over the same time period. Scott County’s employment has increased by about eight percent since 2010. All the other counties have had a decline in employment. The number of working Anderson Countians is down about three percent since 2010. In Campbell, Fentress and Morgan counties, the decline in the number of working adults is closer to nine percent during that time period. To be fair, the peak of the recession’s impact was different in each community. But against the same measurement of time, Scott County has faired far better than its neighboring counties.
Figuring an unemployment rate
So what exactly goes in to an unemployment rate? With some lingering community misconceptions about the way unemployment is tabulated, the Independent Herald reached out to the Department of Labor & Workforce Development for a better understanding.
One common misconception is that a worker is no longer counted as unemployed once his unemployment benefits run out. That is not necessarily true, according to Labor & Workforce Development spokesman Chris Cannon.
“If a person’s unemployment benefits end, but they are still making an effort to find work, that person is still considered unemployed and a member of the work force,” Cannon said.
In other words, it is only after a person has stopped searching for a job that they come off both the unemployment tally and the work force estimate.
As for how the work force tally and the number of employed workers is derived, Cannon said it is a combination of factors. Primarily, the statistics come from the U.S. Census Bureau’s household survey or current population survey, unemployment claims data and total non-agricultural employment, the latter of which is reported by businesses across the state each month.
Another misconception is that a worker who travels outside the county to reach his job site is not counted towards Scott County’s number of employed workers. That is also untrue, Cannon said.
“For example, if a person works in Morgan County but lives in Scott County, his or her employment counts towards Scott County’s total,” Cannon said.
Cannon said the state’s latest breakdown available shows that of about 7,600 working Scott Countians, a little more than 5,500 work in Scott County, while about 2,050 travel outside the county for work. That means right at 27 percent — or just over one in every four workers — of Scott Countians are traveling to Campbell, Anderson, Knox, Morgan or other counties to work. It’s a substantial number, but down significantly from 2012, when it was closer to half, at a whopping 47 percent.
A likely increase
While Scott County’s jobless rate is near an historic low now, it is unlikely to stay there long. With the release of June’s employment data in two weeks, it is likely that Scott County’s unemployment rate will increase. June is the month when the market is flooded with new workers, and Scott County has seen a May-to-June unemployment increase every year since 1998.
Some years feature larger increases than others. In 2001, for example, that record low 3.9 percent unemployment rate doubled the next month, jumping to 7.9 percent. In 2016, when Scott County’s unemployment rate had dropped to a then-impressive 5.8 percent in May, it jumped all the way to 7.6 percent in June.