Where Do Our Jobs Come From?

By J. Ed. Marston

Not so long ago, Chattanooga was a foundry town with an uncertain future. Today, our region has an extremely diverse economy that has added over 22,000 jobs since 1998. That represents a 10% increase in jobs over the period for a total of 245,800 jobs at the end of 2008.

What sectors support those jobs? Which sectors are creating the most new opportunities?

Many may be surprised to learn that manufacturing is still the top private-sector employer in the Chattanooga region. Despite declines over the last decade, manufacturing continues to employ over 33,000 people.

Since 2004, the total number of manufacturing jobs has been more stable, sustaining only a 5% loss. This figure also points up the importance of the Chamber’s retention efforts which have helped save 1,090 manufacturing jobs since 2003.

As major projects like Volkswagen and Alstom ramp up and begin hiring large numbers of people over the next two years, the manufacturing sector is likely to post positive gains.

Although the U.S. Department of Labor counts "Government" as the Chattanooga region’s top employer with over 35,000 employees, this number is misleading unless you realize that the public sector total includes the Hamilton County Department of Education (4,362 employees), Erlanger Health System (3,841 employees), and the Tennessee Valley Authority (3,429 employees).

Even without counting public school employees or the staff at our publicly funded hospital, the "Education and Health Services" sector is the region’s third largest employer with 30,000 employees and a job growth rate of more than 50% over the last decade. This astonishing growth rate at the local level is reflected in national trends that document gains in this sector across the country. Projections suggest that these industries will continue to create many new jobs.

The "Retail Trade" sector, though large, has about as many jobs today as it did ten years ago according to the federal tally.

"Professional and Business Services," which includes legal, accounting, architectural, engineering and advertising firms, grew jobs at a rate of 15% since 1998. This strong growth rate also reflects the recruitment of T-Mobile (800 jobs) and expansions by companies like Convergys, which are also classified within this sector.

The "Leisure and Hospitality" industry has added nearly 5,000 jobs and achieved a growth rate of almost 26%. In addition to creating significant numbers of new jobs, "Leisure and Hospitality" is important because it brings new dollars into the local economy and expands the tax base without requiring additional public infrastructure and only minimal government services. Many tourism amenities and hospitality-oriented businesses also contribute significantly to quality of life for residents.

Companies like U.S. Xpress, Covenant and Kenco Logistics have led the "Transportation, Warehousing & Utilities" sector through a decade of rapid expansion producing a job growth rate of nearly 45% and a total of 19,700 jobs. That means that only "Education & Health Services" grew jobs at a faster rate since 1998.

Unum, BlueCross BlueShield of Tennessee, CIGNA and area banks have continued to be an important pillar of the local economy. The "Financial Services" sector has grown by nearly 10% to a total of 18,500 jobs.

"Mining, Logging and Construction" added jobs at a rate of more than 7% over the last decade. The downturn in the housing market has impacted this industry over the last two years, but major construction projects by BlueCross BlueShield, Unum, Volkswagen, Alstom and others have bolstered local companies in this industry, which has been one of the hardest hit nationally. The sector continues to be a net creator of jobs over the long term and currently employs 10,600 people.

The "Information" sector, which includes publishing, broadcast, software, telecom, and Internet service providers, takes third place in terms of the rate of job growth it has generated over the last 10 years, but the job total remains comparatively small, employing about 3,800 people in the region. Of course, the many information-oriented professionals who work for other business sectors are not included in the "Information" sector count.

Overall, the Chattanooga region has transitioned from an over-reliance on a few industries and now has significant business assets in nearly every sector. The total number of jobs is distributed across many different kinds of companies, so that downturns in one sector are more likely to be offset by stability or even growth in other areas.

Of the 12 job sectors in the Chatt-anooga-region, six posted double-digit rate gains over the last decade with three of those growing at a rate of 40% or better. The announcement of several manufacturing projects, which are currently under construction, suggests the likelihood of growth in this key sector which has been in decline but continues to be a major source of local jobs.