Memphis’ sky-high jobless rate last seen in 1930s
Greater Memphis’ unemployment rate has reached a level unseen here since the Great Depression was ending late in the 1930s.
The jobless rate measured 13% in July in metropolitan Memphis, up from 11.9% in June, federal labor analysts reported Wednesday.
The jobs report confirms the region’s recovery has stalled following the March and April edict by mayors and governors closing non-essential businesses.
The orders slowed the coronavirus’ spread among people and were lifted in May and June. But employers have been slow to recall idled workers, particularly in hotels, bars, restaurants and stores.
Residents of Memphis and Shelby County account for the bulk of the layoffs. Shelby is Tennessee’s largest county and home to about 937,000 of the metro area’s 1.3 million residents.
The unemployment rate measured 14.4% in Shelby County in July, up from 12.2% in June. Desoto County, No. 2 in the region for jobs, measured 8.9%, up from 7.6% the month before. Tipton County, No. 3 for jobs, was at 9% in July, up from June’s 8.7%, according to information stockpiled by the Federal Reserve Bank of St. Louis.
When the layoffs mounted in March and April, most people assumed the shelter-in-place orders would bring the
virus’ spread to acceptable levels. And that in turn would lead to workers returning to their jobs within weeks.
Spring turned into summer and the realization came that the infection rate remained high. Jobs would not return in full force until a vaccine or other remedy was in hand to make people safe from the virus.
While nearly 547,000 area residents continue to work, tens of thousands work from their homes, an effort at social distancing that results in less spending at restaurants, dry cleaners, gas stations and other businesses reliant on daily commuters.
What emerged has been a lopsided economy. Some sectors added jobs. In fact, a separate survey shows metroarea employers in July reported 610,800 jobs on their payrolls, exceeding the payroll jobs in May and June (but sharply fewer in number than the same months last year). However, many of the jobs are part time and have not led to a corresponding drop in the unemployment rate.
With the city’s thriving hospitality industry battered, the remaining sectors appear healthier, especially compared to the museums, hotels, rideshare drivers, restaurant entrepreneurs and other elements of the hospitality economy. Employment in the sector sagged from 60,500 jobs in April to 38,500 in July.
By mid-summer, the metro area’s jobless rate had surpassed even the highest level recorded in the wrenching 2008 recession. The job losses began inviting comparisons to what happened 90 years ago. That’s when a U.S. industrial boom bellied up, leading to a decade-long economic mire that ended when the United States began rearming for soon-to-come World War II.
After the global economy collapsed in the 1930s, Memphis’ jobless rate was estimated at about 25%, but was thought to have receded later in that decade after Firestone and International Harvester opened large factories on the north side, according to historical records. Studies figure the unemployment rate, then as now, was far higher among Black residents.
Notable recessions hit the country in 1945, 1953, 1973, 1981, 1991, 2001 and 2008. The latter was considered the worst for job losses since the 1930s. The 2008 crash led Greater Memphis’ unemployment rate to peak in January 2010 at 10.8% with 67,396 residents on the unemployment rolls.
Wednesday’s report estimates 81,971 unemployed people live in the nine counties that make up the metropolitan area. This compares to the estimate of 73,465 unemployed people in June.
Many who were laid off were assisted by extra unemployment compensation from the federal government through July. This amounted to $600 per week in federal aid intended as a stimulus measure to keep the economy going until idled workers were called back to their jobs.
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at evanoff@commercialappeal.com and 901-529-2292.