Briefing: Nashville Metropolitan Area

Overview:
The Nashville region, similar to the national data, shows a strong economy that is at or near full
employment. The Nashville metropolitan region has an unemployment rate of 2.3% (Oct 2017
BLS). The region’s
median household
earnings, as of 2016,
stood at $54,310, below
the national median
earnings of $57,617.
Yet, digging further into
the data, there are signs
of weakness and
underlying disparities
among the communities
that make up this region.

The region as a whole

appears to have
recovered from the depths of the Great Recession, but African American unemployment remains
elevated at 6.1%, almost double the rate of Whites in the area.

Though Black
unemployment has
dropped significantly
from 2010, many
members of that
community remain on
the sidelines and not in
the labor force. Black’s
employment to
population (EPOP) ratio
stood at 64.3% in 2016
compared to almost 70%
for Whites. This means
there are far fewer
Blacks employed
relative to their
population. We can infer
that there are fewer opportunities for employment for Blacks in the region. This could happen
from systemic issues such as lack of access to quality education and barriers to employment for
non-violent formerly incarcerated persons.

While considering the local labor market dynamic, it is important to look at the change in the
occupational employment in the Nashville MSA region. Following the national trend,
Professional & Business Services and Education & Health are the primary drivers of
employment since the Great Recession. However, key occupations such as Manufacturing and
Construction lost jobs over this period. These occupations tend to pay higher than average wages
and are over-
represented in
Blacks and
Hispanics
workers,
respectively.

Income gaps
are where the
disparities in
this
community
really stand
out. The
median
household
income in the
region stands at $54,310, but Hispanic and Black median income are far below that at $44,028
and $39,162 respectively. Income for Blacks has also risen slower than Whites. From 2008 to
2016, Black household income grew at a pace of just 1.3% compared to 2.1% for Whites.
Blacks in the region have higher unemployment rates, are employed at lower levels, and make
far less than their White counterparts.

Nashville-Davidson metropolitan Median

Income 2016 (Source: ACS)
Median Household $54,310
White $61,862
Black $39,162
Hispanic $44,028
Asian $71,604

Opportunities:
It is clear that there are communities who are not reaping the benefits of Nashville’s strong
recovery, particularly those in the African American community. There are structural deficits
that have led to inequality in this area. The deficits are exacerbated by lack of wage growth,
erosion of skills during the recession, and the rapid fall of on-the-job training that use to be
standard practice in the workplace.

While no silver bullet exists to erase systemic inequities, there are proactive labor market
initiatives that can be employed up-skill communities, provide access to more opportunities, and
raise wages.

Employing Innovative Training Programs – The Trade Adjustment Assistance Community

College and Career Training (TAACCCT) grant program launched in 2012 was designed to
build partnerships between local businesses, community colleges, and community groups to
develop a pipeline for worker readiness in a region. Understanding the employment make up and
trends are critical when considering the proper training programs that could benefit workers in
this region. Construction and manufacturing are not high-growth jobs in the Nashville MSA
region, however healthcare and professional services are growing. TAACCT provides a platform
for businesses and educators in the region to understand local trends and cater to the local needs.
As on-the-job training from employers has diminished over time, it is critical to have employers
buy into worker development to keep up with the changing pace of worker readiness.
TAACCCT enables employers to work with community colleges and in some cases fund efforts
of these schools to develop a pipeline. In Tennessee, Bridgestone Tire donated $4 million to
Motlow State Community College, a TAACCCT grantee, to develop a state of the art
mechatronics training facility for students and faculty. The program creates a pipeline into jobs
at Bridgestone, Nissan, and other manufacturing plants in the region. TAACCT builds and
strengthen partnerships with employers in a region with their community. The key to worker
readiness in the future is to pool resources through public-private partnerships like TAACCCT to
up-skill the workforce in the region. In Tennessee alone, over 6,000 students have gone through
a TAACCCT supported program and almost 4,000 received their credentials. The Urban Institute
found that 30% of those who went through the program saw immediate wage gains. An effort
must be made to push more community colleges in the region to join the College Promise
Campaign, to provide free tuition and equitable access for students, particularly from low-
income backgrounds.

Reducing barriers to entry – The rapid rise of occupational licensing is largely creating barriers
to workers. Low-income workers, in particularly, are adversely effected by diminishing mobility
and lack of entry caused by restrictive licensing practices. Licensing is important to ensure health
and safety for consumers, but the over the last decade, many occupations that have little to do
with safety or health are licensed and occupations that did require licenses are creating more
restrictions. While Tennessee about of occupations that require licenses, potential workers often
don’t have the funds to pay the licensing fees or opportunity to join a program to guide them
through the path to obtain a license. Allowing training, community college, and trade school
courses to obtain a license in the region are critical ways to reduce barriers to entry. Finally,
working with state student loan providers to allow for education vouchers/loans to obtain a
license can also help low to moderate income workers gain access. Common sense measures can
help reduce barriers, ensure safety, and create a structure to allow for the mobility of labor in the
region. Creating forums with employers, workers, and local governments in Tennessee and
Kentucky can create efficiencies of labor allocation and boost wages.

Criminal justice reform and programs targeted to reduce recidivism are also key to enable greater
access to opportunity for the region. It costs more to incarcerate an individual than to train them
or provide access to education. There is movement across the country to focus on program to
reduce the prison pipeline for non-violent offenders. There are good programs and evaluations
happening in Washington State, like their Correctional education (post-secondary) initiative.
This initiative has a benefit to cost ratio of $19.79 per dollar spent on the program. Again,
working on public-private-partnerships in the region between employers, community colleges,
and prisons can reduce barriers, upskill a critical mass of potential workers, and allow a large
portion of a community to gain access to employment opportunities.

Planning ahead - Finally, while there is a focus on upskilling to provide workers with
opportunities, there is a need to focus on the future supply of labor in the region. The nation’s
opioid crisis is having severe negative implications on the workforce and the nation’s prime age
labor participation rate. Economist Alan Krueger estimates that the increase of opioid
prescriptions can account for 20% to 25% of missing workers from the labor force from 1999 to
2015. Benton County, which is just an hour and half drive west of Nashville, the Medical
Examiner these estimates that 30% to 40% of deaths in the county are directly related to
overdosing or abuse of opioids. The slowing of able-bodied, working age populous will
adversely harm economic growth in the region and nation. Focusing on opioid prevention and
reform will prevent further loss of workers and tax-payer burden.

The Nashville region has many of the same characteristics of the nation; low unemployment,
growing participation, and slow but growing wages, yet many communities are not feeling the
benefits or sharing in the opportunities due to systemic barriers. Bringing and addressing
employers, community groups, educators, and government officials in the region together to
focus on proactive labor market policies can enable a culture of shared prosperity through
common sense solutions.