Thumbnail: Unemployment rate falls, driven by workers who have given up looking for work. The number of jobs is significantly below the number of people looking for work. The economy remains weak, and with the winter coming on and with predictions of dire Covid numbers, it’s hard to imagine economic improvements.
By David Ciscel
University of Memphis Professor Emertius of Economics
The numbers for jobs and workers are out for September 2020. The changes in some of the numbers are suspiciously large, but overall, the stories they tell are not significantly different from the numbers released over the past few months. The Memphis economy remains in its pandemic induced recession. The unemployment rate for the MSA (8.9%) is back in single digits, but it is still twice the level that it was in February.
An interesting process is occurring as the regional economy slowly recovers. The regional (MSA) labor force is now back to size that it was before the pandemic began. But, in September, the labor force fell in size – fairly dramatically. The number of unemployed also fell by an even bigger number. It was clear that many people went back to work, but about half the decline in the labor force were just workers who gave up looking for work. The important numbers are the 308,000 in the labor force in the City of Memphis. In the City, unemployment also fell (12.1% from 16.2% in August), but the decline in unemployment was not accomplished by more workers getting employed. The improvement was almost exclusively from workers giving up and leaving the labor force – usually temporarily.
In addition, the contrast between the City and the Suburbs continues to grow. Germantown (3.5% unemployment) and Collierville (3.4%) have almost completely recovered from the pandemic induced recession. The disparities between the City and the Suburbs, which are always large, have only been made worse by the recession.
The number of jobs available in the Memphis MSA (623,100) remain significantly below the number of men and women working or looking for work (649,953). That means workers have little bargaining power in the labor market. It is a “take or leave it” job environment where many workers are not even offered that bleak alternative. The Service sector is still recovering very slowly but remains 26,000 jobs below February 2020. The restaurant and hospitality employment picture is very weak, down almost 8,000 since February.
Many people long for the days of strong manufacturing and construction sectors. But those two goods producing parts of the regional economy make up barely 10% of the regional job picture. In addition, it is important to remember that jobs in those two sectors were never desirable. The jobs are almost uniformly dangerous, dirty, and hard to do. In most recessions they are first to disappear.
Even in this recession, the number of construction and manufacturing jobs fell by close to 5,000. Finally, the pay and benefits were never good in those parts of the economy. When people dream of the ‘good old days’ in construction and manufacturing, they are remembering Union-protected jobs, not the actual jobs that most workers had in those industries.
So, Memphis enters the Fall and Winter. In the Suburbs, the main sound with be warm air blowing through the ducts of central heating systems. In the City, the sounds of this winter will be the poor working their way through the possessions thrown on the lawn of those just ejected from their homes or apartments.