Monday, October 13, 2008

Nashville job engine sputters

LaTosha Hall moved last year to Nashville from Jackson in the hopes that a larger city would offer a better life and more job opportunities.

After working a few jobs in child care and retail shops, she has been unemployed now for four months. With two babies to feed, it hasn't been easy.

"You'd think there's a lot of jobs here but they're not,'' said the 21-year-old. "I'll take anything right now."

People have been moving to Nashville for years, lured by the promise of a growing economy and a reasonable cost of living. And for years, Nashville kept its promise, creating jobs and opportunities for tens of thousands of newcomers every year.

But the latest state and federal labor figures show that has changed. The job market is either flat or contracting, depending on which measure is used. Unemployment in the Nashville area and at the state level reached a 16-year high in August. And further economic data, including declining business tax collections and increased numbers of people applying for unemployment insurance, point to troubled times ahead.

"It's going to be tougher to find a job,'' said David Penn, the director of the MTSU Business and Economic Research Center. "It's a good time to try to hold on to the job you have."

For newcomers to the area looking for work, it can be particularly scary.

"You put a lot of resumes out there, and not much seems to come out of it,'' said Richard Wallace, an information technology manager who moved from San Francisco in May because his wife found a local job in health-care administration.

Since then, he's managed to nab one job interview but no job.

Nashville seemed like a better bet than California, marked by plunging housing values and a high cost of living. The San Francisco Bay area saw the median home price fall 32 percent in August from the year before to $447,000. By comparison, the Nashville area saw the median home price fall 6 percent in August to $177,500.

Wallace estimates that it costs half as much to live in Nashville as it does in San Francisco.

But an influx of people from other parts of the country is helping to make competition for jobs tougher. The population of the Nashville area grew at more than 2 percent annually through 2007, the latest data available from the U.S. Census bureau. People are moving primarily from other parts of Tennessee or from places such as Florida and California.

"You're on the receiving end of a lot of people moving here and finding out the economy is not what they thought," Wallace said.

James Sloan, who owns JBK Carpentry in Michigan, is splitting his time between his home state and Tennessee. Roughly half of his time, he leaves his wife and two children in Michigan and brings a crew of four skilled workers to Middle Tennessee to escape the housing downturn at home.

The unemployment rate in Michigan was 8.9 percent in August, the highest in the nation. The Nashville area stood at 5.7 percent in August.

Two years ago, Sloan thought his clients in the Flint area, who tend to be wealthier than average, wouldn't be affected by an economic slowdown. That wasn't true. He had to let some workers go and saw work, which normally averaged 80 hours per week, trickle down to as little as 25 hours per week for each person.

Sloan isn't averaging a full workday in Middle Tennessee either, but it's better than home.

"It's somewhat prosperous, compared to where we were coming from," he said.

Ralph Schulz, president and chief executive officer of the Nashville Area Chamber of Commerce, acknowledged that Nashville is not immune to a global economic slowdown, but he said continued population growth benefits the area, despite the downturn.

"We need more people moving to town with IT skills, advanced manufacturing skills and abilities,'' Schulz said. "People moving to town help us with that.

"You're not going to have people out there hiring big chunks of staff,'' he said. "They're going to hold on. When the economy starts recovering, they're going to start hiring again."

Employment was growing pretty consistently early in the year, gaining an average of 8,232 jobs per month between January and April compared with last year.

But by August, the local economy had lost an estimated 10,520 jobs compared with the same month a year ago, according to the Tennessee Department of Labor and Workforce Development.

Professional jobs scarce

Some people are "taking any kind of job they can get right now,'' said Terry Hiers, the manager of the Tennessee Career Centers in Davidson County. "What jobs they're looking for, they're overqualified."

Most of the job placements at the career centers are for temporary or seasonal work, such as in retail and hospitality.

"It's harder to find people professional jobs, because people are holding on to those jobs,'' Hiers said.

The Metro Center career center's bulletin board boasts new "hot jobs" on a regular basis, with the drawing of a piece of dynamite to emphasize the point.

The bulletin board last week listed an opening for a package handler for $9 to $9.50 per hour and a diesel mechanic for $15 per hour.

Reginald Manning surveyed the career center last week and said he was disappointed with the pay for the jobs he's been looking at.

"They want you to do $40,000 worth of work and they want it all for $10 per hour,'' said Manning, who was laid off recently from his job as a customer service representative at Cigna. "They realize jobs are scarce and it's an employers' market right now."

Matt LeBlanc, an employee recruiter for Nashville-based NGP, said he's still as busy as he has ever been, but he has noticed that employers are taking longer to make hiring decisions. Three years ago, employers desperate for workers hired people that met 70 percent of their qualifications.

Now, "they're trying to find someone closer to all the qualifications they're looking for,'' he said.

Most sectors affected

University of Tennessee economist Bill Fox, who studies the state's economy, said that a year ago, job losses were concentrated mostly in manufacturing.

Nowadays, job losses have spread to most sectors, except education and health services. This creates a downward cycle that perpetuates itself. With more people out of work or worried about their jobs, they tend to spend less. If they spend less, other businesses are hurt and cut more jobs.

"I think it's reasonable to see (the economic slowdown) going on at least until next spring,'' Fox said. "Consumers are not going to start spending aggressively even if the Dow quits falling."

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