Thumbnail: University of Memphis’ Professor Emeritus in Economics David Ciscel says the metro economy is tumbling in June but will likely appear good when even worse July numbers come in. Meanwhile, basic economic problems will last longer than the pandemic.
By David Ciscel
Well, there certainly isn’t much positive news to report with the recently released June 2020 employment numbers for the Memphis MSA.
Unemployment is back up – from 10.7% in May to 11.9% in June – and those numbers reflect 73,822 men and women looking for work and not finding it. In addition, a few thousand just gave up and exited the labor force, now at 620,000.
So, while our society staggers about trying to figure out how to stop the pandemic, many people are also suffering economically. It is not a big surprise about who is suffering. The City of Memphis has a 15.3% unemployment rate in June – up from 12.9% in May – 45,456 workers looking for work – over 7,000 more than the month before. Compare Memphis to its small, affluent suburbs: Bartlett 7.5% unemployment, Collierville 6.0%, Germantown 5.7%.
The jobs picture is different. There were 654,000 jobs in the Memphis MSA in February/March of this year. That fell dramatically to 584,000 in April. Since then there has been a slow recovery, but the numbers are up for June – to 611,000 jobs in the region. Construction and manufacturing employment have hardly changed at all after a decline in March. Service producing jobs jumped back up for the second month in a row to 536,000 jobs, still way below the levels in February/March. The big areas of recovery were staffing (part-time gig work) agencies (up 1,200 jobs) and Leisure and Hospitality (up 12,500 jobs). Interestingly, the sector contributing to the continuing economic decline was State and Local Government employment (down 4,500 jobs).
The employment picture is somewhat contradictory. Unemployment is up, the size of regional labor force is down, but the numbers of jobs are back up for the second month in a row. The number of jobs is still significantly below the size of the labor force (the sum of the employed and unemployed).
And these numbers reflect a month – June – that will probably look good compared to July as the infection rates have soared to new levels in the region.
And these numbers sadly reflect the outcome of an uncaring society. Individually, we care. We donate, we volunteer, and we sympathize with those less fortunate than ourselves. But we don’t address the systematic inequality that we have built into our economic system.
The pandemic – and the lack of a living wage – have laid bare the reality of our economy. Most of the 11.9% unemployed in the Memphis region are not people who have saved up 6 months of wages for hard times. They do not earn enough to live well even when fully employed. One of the great drumbeats that you hear in the Memphis region is that education and training are needed for a better work force. Unemployment is a job skill destroyer.
The recession associated with this pandemic, our inability to deliver an adequate safety net, and our inattention to the long-term fallout for the regional economy will plague us economically for a longer period than the virus does.
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