Tennessee job growth increases, but wages decline

7/3/2012

That's the mixed snapshot of Tennessee shown by recently released government data, which say the state was among the national leaders in job growth but also saw wages fall by more than most during a recent one-year period.

Economists and local economic officials couldn't readily pinpoint the causes of the unusual contrast, offering several possible culprits. Among them: more part-time workers getting hired, flaws in how the data is collected or greater job losses in higher-paying industries.

Some 60,000 additional Tennesseans held private-sector jobs in December 2011 than in the same month a year earlier, the Labor Department said. Tennessee's 2.1-percent job growth rate over that span was sixth-best among U.S. states.

But more jobs didn't translate into bigger paychecks, neither in Tennessee nor the nation.

The average Tennessean earned $858 a week last December, $20 less than the previous year. That 2.3-percent drop was the 10th-largest among states.

Paychecks nationally fell by 1.7 percent to $955 a week.

A national wage drop has occurred only five times since the federal government began keeping track of such data on a quarterly basis in 1978. But it's also the first time that wages fell while employment grew, the government said.

David Penn, a Middle Tennessee State University economist, believes Tennessee employers hired part-time workers at a faster clip.

"That seems to be the case, especially in the business services and construction sectors," he said.

He said another scenario -- hiring of lower-wage workers and layoffs in higher-paying industries both accelerating simultaneously -- was possible but "pretty far-fetched."

Limitations in how the data is collected also could be a factor, University of Tennessee economist Bill Fox said. The government figures are based on telephone surveys of households, and payroll data is supplied by businesses.

The surveys don't include those without a land line, who tend to be younger and more likely to be self-employed, Fox said. Payroll data comes from existing businesses that have employees, thus excluding sole proprietorships and newer businesses.

Source: WBIR