Wages are growing, but not as fast as they should

Nathan Baker • Mar 17, 2019 at 8:30 PM

People in Washington County are bringing home more in their paychecks, giving the average resident more purchasing power than 10 years ago.

According to data from the U.S. Bureau of Labor Statistics, average weekly wages in the county rose every year since 2008, except 2013. The average resident working in the private sector received $617 a week in 2008 and $743 in 2017, the last complete year on record.

That 20.4 percent wage growth was quicker than the 13.3 percent rate of price inflation over the same period measured by the national consumer price index. On average, pay in Washington County grew 2.1 percent a year, compared to inflation at 1.4 percent average growth.

What that means is, since 2008, the average difference between wage increases and inflation is 0.7 percent, a relatively low figure for real wage growth.

The figures indicate a positive trend, but economists, both local and national, say wages should have grown faster after the end of the Great Recession.

As the unemployment rate fell — it was 3.8 percent in Washington County in 2017, down from 8.7 percent in 2010 — employers should have been forced to pay more while fewer people looked for work.

In 2015, after a 1 percent wage decline in 2013 and unimpressive numbers in 2014, Ken Rea, deputy director of Economic and Community Development for the First Tennessee Development District, said slow wage growth could be a result of structural changes to our economy.

Since 2010, the end of the national recession, the number of Washington County employees in manufacturing and construction decreased by 12.7 and 8.6 percent, respectively, while leisure and hospitality and retail trade jobs grew by 25 and 11 percent.

Compared to wages earned by workers in the manufacturing sector, those in retail make 48 percent less, and those working in hospitality make 68 percent less.

With an increase of lower paying jobs and a loss of those paying more, average wages are stunted, even when more residents are working.

Some local leaders hope plans to train local workers for the demands of modern employers will help bring higher-paying jobs back to the county.

A Development District initiative, led by Director of Workforce and Literacy Initiatives Lottie Ryans, aims to have all counties in Northeast Tennessee certified as Work Ready Communities, making it easier for employers to find qualified employees.

Washington County Mayor Joe Grandy, along with other leaders in local industry and education, are attempting to convert Boones Creek Elementary School into a Tennessee College of Applied Technology once grade-school students are moved to a new school.

If the project receives funding, local residents from Washington and other nearby counties could learn skilled trades like welding and operating heavy machinery at the campus.

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