Tennessee job growth increases, but wages decline

10:09 AM, Jul 3, 2012   |    comments
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By Duane Marsteller | The Tennessean

More of us are working, but we're making less.

That's the mixed snapshot of Tennessee shown by recently released government data, which say the state -- led by a pair of Middle Tennessee counties -- 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.

Leading the way were Williamson and Rutherford counties, whose rates of employment growth ranked third and sixth respectively among the nation's largest counties, the government said. Williamson jumped by 4.3 percent; Rutherford rose by 4 percent.

Private employment grew by 2.3 percent in Davidson County, well above the national average of 1.4 percent.

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. Losses were even steeper in Williamson, where the average weekly paycheck fell 6.7 percent, or $75, to $1,050. It was the sixth-largest decline among all counties.

That distinction didn't faze a county official, however.

"It's more curious than anything," said Matt Largen, Williamson's economic development director. "I'm more interested in the job growth. Any time we are adding jobs in Williamson County and the Nashville region, it's great."

Wage dips are rare

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."

Brian Brenneman, a vice president and senior portfolio manager at Fifth Third Private Bank in Nashville, said he's heard reports of blue-collar and fast-food restaurant wages actually falling.

"People are now accepting lower pay than they were two years ago," he said.

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.

Contact Duane Marsteller at 615-259-8241 or dmarstelle@tennessean.com.

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