Wednesday, August 29, 2018

Ignorance Not Blissful

The level of ignorance I encounter here in Nashville surpasses levels of idiocy that I have encountered in my travels in America.  I have met the owner of a cafe in Cleveland who impressed me with his directness and honesty, the gift shop clerk in Louisville who was a Teacher during  the school year and was truly inspiring, the young man from Philadelphia in pursuit of a career with the YMCA, Darrell my driver in Pittsburgh who few could top for his divine conversation and pure positive energy are just a few examples of the amazing people I have met throughout my Summer of Me.  Now true I have encountered some wonderful people here but I keep my distance as there is no purpose other than being disappointed which inevitably I will be if I push my luck.  This was only once again proven positive when the Barista I asked to mind my home while away failed to well do it if at all.  Plants were dry, some dead and the strangeness I found from a disconnected TV, personal items sitting out and no real sense of anyone here on a consistent basis just bothered me.   I had a vibe before I left as she is not bright but how hard could it be?  Well hard apparently.    But I did not find a single plant stolen from the front patio so that was something.

And in reality a lot of this is simply due to wages and education.  Even if the population was educated, the wages and the way the state is structured with regards to right to work, would not enable the employers to pay said wages.  There is no imperative and the Chamber of Commerce has vocally said that as so many people are moving here and employment is at an all time high there is no reason.  And in turn that  places most of the onus of responsibility on our bizarre legislature that has blocked attempts by Nashville to establish a living wage act, housing laws and other ways to circumvent the costs of living in the "It" City.  The fear is that if Nashville gets anymore it no one will live in the outlying areas of the State and in turn decimate whatever local economy exists in between the closing of hospitals in same areas, no broadband access, schools that barely function and a growing opioid problem that fuels the rage and despair of the elected officials who have no clear plan or idea how to fix the issue.  Try enabling people to get to jobs where there are jobs and have a valid transit and infrastructure plan that enables those outlying areas to have at least functional roles in building a workforce.   Just the other day it was found that the University in Knoxville fuels billions in that areas economy which shocked me but then again given the turnover and attention to the school recently I suspect that it is less about education and more about sports.    But the real driver of the State economy - tourism.

When I read the below article I laughed as the average wage here is nowhere near $17/hr let alone $20.  When you say "average" you include all wages in the labor pool and that includes the Medical professionals (aka Doctors) and Lawyers who dominate the higher sector of employment earnings with those who are the bottom end of the spectrum which artificially inflates the average.  If you remove those in the top tier the reality is that wages here run about $11-13 hour.    Few offer benefits and even fewer require education.  And if one was educated the student loans would negate any reason to take said jobs.  When they say they cannot find enough trained workforce I keep wondering what training are they speaking of.  You don't even need a college degree to be a Substitute Teacher and frankly I wonder when I walk into these dumpsters called schools if the Teachers have them.  It is something I cannot believe when I walk in and even more so when I walk out.   

The influx of supposed migrants into the area is slowing and rents are dropping.  That said we pay the most in living costs as we have the most expensive electric rates in the country.   We have no infrastructure so without a car the transportation costs (supposedly the most expensive city with regards to ride hailing use costs)  are huge here (insurance is unusually high due to the daily traffic accidents/fatalites and crimes regarding car theft)  and there is a sales tax that is out of proportion with wages including food.     I rarely communicate with the property management firm that has let this building fall apart from basic maintenance to required upkeep, and the endless cycle of tenants tell me that this is just another stopping ground to where ever as the dreams and reasons that brought them here don't keep them here for long. I have finally stopped trying to bond or care with the coffee servers, the bank tellers and others I encounter during the day.  I was shocked when one of the Teachers I pushed in with yesterday actually asked my name and introduced me to the class, the others ignored me and pointed to the kids I was to assist.  It was sad, grim and pathetic.  It was the same the day before as that is the standard of respect modeled for the children.  Nashville is truly vile. Come and earn low wages be treated like shit, I call myself the the human colostomy bag.  They don't even know what that is here.    If you think a degreed person making 35K annually is a good wage, realize it takes about 75K to live here.  Seattle does as well and yet this is nowhere near as clean, progressive and intellectual so again numbers don't always tell the truth.  But then again I suspect people in Seattle can do the math better.

10 years after the Great Recession: New opportunities, tepid wages in Nashville
Jamie McGee, Nashville Tennessean Published  Aug. 28, 2018

Editor's note: This is the first in a series on Nashville, 10 years after the start of the Great Recession.

Laura Sivado graduated with a master's degree in communication arts and dreamed of working in human resources.

But in 2009, with a tanking economy, she struggled to find work in her chosen field. She became a caregiver, doing chores and caring for seniors, earning $9 an hour. She and her husband delayed their honeymoon and home improvements. She also crotcheted as a side income.

"I imagine where I could be now," said Sivado, who now lives in South Nashville. "I saw all the jobs dry right up."

Sivado works today as a hospitality recruiter, a job that better aligns with her education and one that she enjoys. She is paid about $35,000 a year, well above her caregiving wages, but less than she expected to be earning nearly a decade after obtaining a master's degree.

“I haven't moved the needle," Sivado said. "A lot of us who were told go to college, get your degrees, do this, you'll make good money, (now)we'll be working through our 70s because we've made no money in our 20s and 30s to build our retirement."

Ten years after the country plummeted into the Great Recession, a lot has changed, particularly in Middle Tennessee.

In September 2008, banking powerhouse Lehman Brothers collapsed in New York, setting off the financial crisis. The Nashville unemployment rate climbed to nearly 10 percent, home foreclosure rates soared, stock markets crumbled and retirement savings dissolved.
Ten years later

Nashville's diverse economy, with a focus on more recession-resilient sectors such as health care and education, helped it weather the recession better than many other metro areas, including Detroit, Las Vegas and Fresno, Calif., where unemployment ranged from 14 to 18 percent.

Middle Tennessee came out of the recession earlier and today faces a vastly different landscape. Employers in a range of industries are desperate for workers amid a 3 percent unemployment rate, and foreclosures have fallen to 2 percent. Stock markets have continuously hit record numbers, helping retirement savings rebound.

Many of those who suffered during the recession are in better shape in 2018, but the stalled economy has left a mark ontoday's wages and salaries.

“The adjustment from the Great Recession continues to take place,” University of Tennessee economist Matthew Murray said. “The lack of earnings growth is an example of this."
Job market devastation

During the downturn, the Nashville area lost 53,000 jobs, nearly 7 percent of its workforce, and Tennessee lost nearly 218,000 jobs, a nearly 8 percent decline. The Tennessee construction sector, professional and business services, and the retail industry each lost tens of thousands of workers. Bellevue Mall shuttered in 2008 and new downtown condos that hit the market as the recession peaked struggled for buyers.

The state's manufacturing industry, which began shedding jobs in the mid-1990s, accelerated its decline and cut ranks by 74,000, or 20 percent, in two years, according to the U.S. Bureau of Labor Statistics. General Motors, a major Spring Hill employer, cut about 1,700 local workers in 2009, as it closed 14 plants nationally. The impact rippled across Spring Hill, with 250 businesses closing that year.

"It was one shoe dropping after the other," said Jan McKeel, president of South Central Tennessee Workforce Alliance. "You had a lot of heads of households that lost their jobs in that period of time ... We saw multiple generations, moms and dads, fathers and sons."

As construction slowed, related businesses were impacted. Gresham Smith and Partners architecture and engineering firm in Nashville cut training programs, corporate travel, executive perks,such as golf club membership and sport events, and eventually, staff. Profitsflattened to near zero as projects were paused or stopped.

Even when clients saw their own business improve, they were hesitant to move forward with plans, said Al Pramuk, Gresham Smith CEO.

“There were a lot of difficult phone calls from clients that were telling us the challenges they were having,” Pramuk said. "We wanted to do all the things we could before we had to explain to some of our employees that they had to find some other options, even if it were for the next year or so."

Ralph Schulz, CEO of the Nashville Area Chamber of Commerce, said economic development projects in the pipeline disappeared and recruitment targets abandoned their searches for expansion sites.

"It came out so fast and so hard, it was surprising," Schulz said.

Terri McCall, a recruiter for home health provider Visiting Angels, recalled how her fiancé, now husband, had come to her office at a former health care company in 2009 to take her to lunch. He helped her pack a box instead.

A year later, her employer would be closed, and McCall would work through a temp agency, facing uncertain hours and $9 to $10 an hour wages, well below her earnings as an executive coordinator.

“It took a while to bounce back,” McCall said.
'I schedule people for interviews and they don’t show up'

Today, the state boasts more than 162,000 open positions in Tennessee, more than the 115,000 individuals who are unemployed.

Patrick Combs, executive director of Nashville Career Advancement Center, said the strength of the job market has posed a challenge for employers in need of skilled workers, especially in nursing, manufacturing and construction fields.

"There is a scarcity of skilled workforce," Combs said. "Employers are really feeling the pinch."

During the recession, when the supply of skilled workers greatly exceeded demand, a candidate with a gap in their work history stood little chance against someone with a more complete resume.Now employers are more willing to overlook those periods of unemployment or to hire someone who has a conviction history, he said.

As a recruiter, McCall observes daily the new challenges that have emerged in a robust economy. Jobs are back, but people are not chasing them. Low wages coupled with higher living expenses are among the factors deterring them, she said. For those with children, child care expenses often can counter the income they would earn in the workforce.

"I schedule people for interviews and they don’t show up," McCall said. "The cost of living is so overpriced in Nashville. Companies don’t have comparable pay ... A lot of people have just given up ...There are jobs available. People are just not going after them."

Combs calls this the discouraged workforce — people who are no longer looking for work because of real or perceived barriers. Some may think employers won't hire someone with a conviction history or who lacks transportation. Nashville Career Advancement Center reaches out to communities facing higher rates of poverty to connect them to opportunities or to help them overcome the hurdles that limit their participation.

"There are still parts of town where there has been systemic poverty, where the opportunities have never reached them," Combs said. "They don’t feel they can go looking for it."

Since the depths of the recession, the Nashville metro area has since hit a new high of 1 million jobs, a 25 percent increase. Retail has recovered and business services and hospitality both significantly exceed pre-recession employment levels.

"By and large, most sectors in the economy have done well," Murray said. "It has just taken a long time for that health to be fully restored."
Wage stagnation

Murray describes the lack of wage growth in recent years as one of the “great mysteries” of today's thriving economy, and said the problem is rooted in entry-level wages.

“When you raise the wage rate for entry-level workers, oftentimes, you get pressure to raise the entire wage structure," Murray said. "Employers are reluctant to do that."

During the recession, employers were able to hire people for less money and for fewer hours to avoid covering Affordable Care Act benefit requirements, Combs said.

"All of these things are slowly starting to creep back up," Combs said.

In the first quarter of 2018, average weekly wages in Davidson County grew 6.2 percent compared to the same period last year, outpacing the national increase of 3.7 percent. The county was 19th in the country for its wage growth during the quarter.

For all of 2017, Nashville average wages grew by three percent and stayed flat in 2016, according to data provided by Metro Nashville officials.

"Wages are usually very slow to change, but they are finally changing to reflect the scarcity of the labor," said David Penn, Middle Tennessee State University associate professor of economics. "It took a while."
Laura Sivadoat talks about the foreclosure home with a pool that she and her husband bought during the recession, in Antioch, Tenn., Tuesday, Aug. 21, 2018.Buy Photo

Laura Sivadoat talks about the foreclosure home with a pool that she and her husband bought during the recession, in Antioch, Tenn., Tuesday, Aug. 21, 2018. (Photo: Lacy Atkins / The Tennessean)

Hospitality staffing recruiter Sivado sees firsthand how the stagnant wages are affecting hotels' ability to hire and retain workers who are in heavy demand. Hotel rooms in Nashville are going for $500 a night, but workers are not feeling the impact, she said.

“The pay is nowhere matching the growth," Sivado said. "You want a good housekeeper, someone who stays here and knows what they are doing. If you continue to pay $11 and $12 an hour, they can't afford to feed their family on that."
Housing collapse, recovery and boom

In 2008, Davidson County had 4,203 foreclosures, up 178 percent from 2006, according to Tennessee Housing Development Agency data.

"There were a lot of homeowners who were upside down," said Sher Powers, president of the Greater Nashville Realtors. "Because they were overextended, the house was not worth as much as they owed or they didn’t take good care of the homes. We had a lot of free and easy loans in the past that helped set up this problem. People were borrowing 100, 105 percent, putting no money in the deal. It was easier to walk away and take the credit hit."

For those unable to make housing payments, a job loss or a medical issue was the biggest reason for missed payments, Powers said.

Nashville fared better than other parts of the country. The U.S. had a 225 percent increase in foreclosures from 2006 to 2008. In Shelby County, there were more than 15,000 foreclosures in 2008, and Memphis ranked 18th in the nation inforeclosures among the nation’s 100 largest metro areas. Nashville ranked 52nd and Knoxville ranked 68th.

Tennessee Housing Development Agency Research analyst Joe Speer said better wages, lower unemployment and higher home priceshave helped improve foreclosure rates.

“Home borrowers and mortgage holders have fewer sudden shocks to their incomes, which would mean fewer triggering events that may lead to a default on their home loan,” Speer said. “The velocity in home sales and the appreciation of home values, that often means a borrower who may be struggling with their loan can simply sell their home before they fall very far into delinquency.”

Tighter lending standards now make loans harder to access for many Tennesseans, he said, which has yielded fewer foreclosures. Additionally, many homeowners have refinanced their mortgages as interest rates dropped.

Nashville housing prices have increased twice as fast as wages in the second quarter of 2018, compared to the same quarter in the previous year, according to California-based ATTOM Data Solutions. Home prices climbed 7 percent as wages gained just 3 percent. Since 2012, wages grew 10 percent while home prices shot up 89 percent.

"The very rapid population growth and the stellar job growth that has taken place in the Middle Tennessee region has likely created some real serious housing problems, especially for middle and lower income households," Murray said. "That is the pattern we are seeing in urban areas all around the country."

Job losses (by state/city)

Tennessee: 217,000 jobs, or 7.7 percent

Nashville: 53,000 jobs, or 6.6 percent

Memphis: 53,000 or 8.2 percent

Knoxville: 21,600 or 5.7 percent

Unemployment highs during the recession

Nashville: June 2009 at 9.6 percent

Tennessee: June 2009 at 10.9 percent

U.S.: October 2009 at 10 percent

Source: Federal Reserve Bank of St. Louis, Bureau of Labor Statistics,
Unemployment in July 2018

Davidson County: 3 percent

Tennessee: 3.5 percent

U.S.: 3.9 percent

Source: Tennessee Department of Labor & Workforce Development
Tennessee average hourly wages

2008: $17.57

2017: $20.94

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