A stronger job market emerges in Tennessee, along with economic scars from COVID-19

By: - February 8, 2021 4:01 am
(Getty Images)

(Getty Images)

In the early months of the COVID-19 pandemic, Sevier County’s public libraries transformed into unemployment insurance centers to help with the deluge of new claimants who lacked Internet access. The county that typically welcomes millions to Dollywood and Gatlinburg each year was experiencing a stunning 29% unemployment rate. The county’s libraries implemented an appointment system to handle demand from jobless residents.

“We were swamped right then, being a tourist area,” said Marcia Nelson, director of the Pigeon Forge Public Library. “It was sad and scary because we didn’t know how long everything was going to be shut down.”

Sevier County is now open for business. The Gatlinburg Chamber of Commerce has mailed out vacation guides to encourage visitors. Dollywood is forecasting the return of most of its staff this year and the resort is seeking to fill hundreds of new positions. With the county’s unemployment rate falling below 4% in November, the Pigeon Forge library is back to supplying books and offering normal computer services. Only about five to seven people come in a week for help with unemployment benefits, down from about 10 a day last spring. 

“For the last few months, our county has been wide open,” Nelson said. “We are begging for workers.”

Against the backdrop of the past year, during which Tennessee payrolls dropped by 100,000 people and unemployment claims climbed above a once unimaginable 1 million, economists and business leaders are pointing to significant job gains and are signaling optimism for the state’s trajectory in the year ahead. 

“We are on the mend,” said University of Tennessee economist William Fox. “We are making progress and getting closer to where we were.”

William Fox, economist at the University of Tenessee (Photo: Haslam.utk.edu)
William Fox, economist at the University of Tenessee (Photo: Haslam.utk.edu)

The state’s unemployment rate has steadily dropped nearly each month since the highs of April, when it reached 15.5%. At 6.4%  in December, the rate is nearly double the numbers seen throughout 2019. 

While the jobs data reflect positive momentum, they also mask the financial duress that many Tennesseans still feel who have experienced job losses or seen hours cut. 

“There is definitely still a lot of pain out there,” said United Ways of Tennessee President Mary Graham. “The needs are not going down or going away.”

Manufacturing, leisure industries begin to rebound

In 2019, leisure and hospitality  produced more jobs in Tennessee than any other sector, according to state officials. In 2020, it was the industry hardest hit by COVID-19, with jobs declining by 12%, according to the U.S. Bureau of Labor Statistics.  Manufacturing jobs, another leading sector in Tennessee, fell by 6%. 

In the Southern Middle region of Tennessee, which includes Giles, Maury, Lawrence and Lincoln counties, at least one third of workers have made unemployment claims, according to the University of Tennessee’s Boyd Center for Business & Economic Research. In the Greater Memphis area, close to 40% of workers have filed claims since March. 

Residents in Giles County, home to multiple auto supply manufacturers, felt the impact when the auto plants shut down last spring. Now, with those plants operating again, the job market has improved and has even become tight again, said David Hamilton, executive director of the Giles County Economic Development Commission. 

“Anybody who wants a job in manufacturing now can get one,” Hamilton said. “Before COVID-19, it was like everyone was fighting over people, trying to find workers. It’s going to get like that again. It’s a good problem to have.”

Hamilton pointed to company expansions and investments in the Pulaski area that have moved forward amid COVID-19 and that are poised to bring more job opportunities, including Frito-Lay’s plans to add 100 new jobs there in the next three years. He expects to make more manufacturing jobs announcements soon, he said. 

In the Southern Middle region of Tennessee, which includes Giles, Maury, Lawrence and Lincoln counties, at least one third of workers have made unemployment claims, according to the University of Tennessee’s Boyd Center for Business & Economic Research. In the Greater Memphis area, close to 40% of workers have filed claims since March. 

Statewide, Amazon, Gestamp, General Motors Co. and SmileDirectClub are among the companies that have announced major expansions in Tennessee in the last year. The 14,000 new jobs expected from corporate projects announced last year was similar to commitments made in 2019, and the dollars invested was higher than it had been in at least the past decade, with $5.8 billion committed to corporate expansions or relocations.  

As Tennessee has weathered dramatic job losses, its unemployment rate has fallen below the nation’s in recent months. In December, the national rate was 6.7%. 

The state began 2020 in a stronger position and it has not experienced the longer shutdowns that more densely populated states have, Fox said. Tennessee’s enduring sales tax collections, which grew by more than 10%  in 2020, indicate people are still spending, just in different ways. “Tennessee is doing a bit better,” he said. 

“Sometimes I wonder if we get food on the table”

Even as Hamilton describes economic momentum and recovery from the pandemic slowdown, he said he is also cognizant of the financial stress Giles County has felt because of the virus. Some small businesses that shutdown in the spring haven’t come back or they have changed owners. He helped pack food boxes in January for the Community Rural Food Delivery organization that serves the Pulaski area and there were about twice as many boxes distributed than before the pandemic.  

Rich Woolard with Community Rural Food Delivery (Photo: Doug Wong)
Rich Woolard with Community Rural Food Delivery (Photo: Doug Wong)

Rich Woolard, a founder of the Community Rural Food Delivery in Giles County, said the organization was providing about 300 boxes of food each month before the pandemic and now the number is between 500 and 650.  The boxes, filled with bread, lunch meat, cereal, rice, beans and other goods, is enough to feed a family of four for a week. While the job numbers have improved in recent months, the demand for food boxes has not budged. “It has not come back down at all,” Woolard said. 

While COVID-19 has added to food insecurity in the Giles County area, it has also just brought to light the difficulties that already existed for low wage earners covering basic costs of living, he said. Many of the people showing up are elderly residents caring for grandchildren and he has also seen a mother and children living out of their car because of a pandemic-related job loss. 

“It’s opened our eyes a lot to the need for more income, for more jobs,” Woolard said. “Because of the income level we have in the county, they are going to continue to need the money. They may be employed, but you can’t make ends meet.”

Similarly, Mid-South Food Bank in Memphis, is still distributing twice as much food each month as it was before COVID-19, an increase based on both increased need and additional resources. Food insecurity affected 15% of the Memphis population in 2018 and is expected to affect more than 19% in 2020, according to Feeding America.

More than 830,000 homes in Tennessee were one emergency away from financial crisis, prior to the pandemic, according to United Ways of Tennessee. While those households were employed, they were still unable to cover all basic costs, including food, health care, and transportation. In a United Ways of Tennessee survey released in November, nearly a third of Tennessee respondents were concerned about working fewer hours or earning lower wages because of COVID-19, and 15% of respondents struggled to meet their household’s food needs.

Many hourly workers across the state are struggling to find child care now that many centers have reduced hours, which also limits the hours they can work or the jobs they can take, Graham said. They are increasingly turning to credit cards, savings and payday lenders, she said. 

“A case pops up in your child care center and it closes down. How do I go to work if my childcare is closed?” Graham said. “We are still facing all of those crises across the state.”

Before COVID-19, Lewisburg resident Brandy Jett said she was earning $16 an hour working as many as seven 12-hour shifts in a week at Adient auto seating manufacturer in Columbia. Now, after being laid off, she is working about two days a week for a call center and hoping for more hours. In the past year, unable to get her unemployment claims processed, she lost her truck and was evicted from her home. She, her three kids and her husband are living at a friend’s home. She still qualifies for unemployment benefits because of her limited work hours, but she has been denied because she is not actively looking for other jobs, she said. 

“I have a job,” she said. “I’m just waiting for it to pick up.”

She has been put on hold for hours only to be reassured her benefits will be processed. A check has still not come. 

Jett’s voice cracks when she talks about providing for her children, ages 4, 6 and 15. While she and her husband are down to one car and are able to delay rent payments, they still have to cover groceries, utilities and child care costs for days they are at work.  

“It’s been hard,” she said. “Sometimes I wonder if we get food on the table. The way I see it, as long as my kids are taken care of, I’m fine.”


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Jamie McGee
Jamie McGee

Jamie McGee covered economic issues for The Tennessean and prior to that, was a reporter for the Nashville Business Journal. Her stories have been featured regularly by USA Today, and she received a Pulitzer Center on Crisis Reporting grant. She has written for Bloomberg News and The Post and Courier in Charleston, S.C., and has a Masters in journalism from Columbia University.