VOL. 110 | NO. 6 | Tuesday, January 9, 1996
1/9 jts manuf. wages
Memphis near top of state cost of living, third in manufacturing wages
By JAMES SNYDER
The Daily News
Memphis ranks third among Tennessee cities in manufacturing wages but nears first in the cost of living, according to figures from the Tennessee Association of Business.
On average, Memphis manufacturing workers earned $11.07 per hour in September, while their colleagues in Nashville and the Tri-Cities area earned $11.53 and $11.56, respectively. Wage figures are based on information from the State Department of Employment Security.
In terms of the cost of living, Memphis followed close behind Knoxville for the first quarter of 1995, ranking 95.3 percent to Knoxvilles 95.4 percent. The numbers reflect a percentage of the national average as calculated by the American Chamber of Commerce Research Association (ACCRA).
Nashville, on the other hand, ranked lowest for cost of living among Tennessee metropolitan areas at 90.9 percent and ranked highest in manufacturing wages.
Statewide, the number of manufacturing jobs dropped by 10.3 percent between September 1994 and September 1995. Memphis manufacturing jobs decreased by 0.6 percent during the same time, but rose 0.4 percent between August and September 1995.
However, the statistics dont always tell the whole story, said Larry Henson, research director at the Memphis Chamber of Commerce.
Henson speculated that there is probably no difference among the cost of living rates in Memphis, Chattanooga and Knoxville due mostly to the voluntary nature of reporting to ACCRA. The real difference, he said, is Nashville.
He also noted that Memphis competes for business relocations with mid-tier cities mostly outside Tennessee, such as Dallas, Louisville, Ky., and Indianapolis, Ind. In those cases, Memphis has a comparably low cost of living, Henson said.
"Memphis is attractive from a cost-of-living basis when you look at other major cities outside of Tennessee," concurred David Ciscel, senior economic researcher at the University of Memphis Bureau for Economic and Business Research.
"The fact that were a little more expensive to Nashville is not a negative when it comes to recruiting."
Lower wages can be a double-edged sword, Henson said. Lower wages attract more firms looking for a cut in costs, but they sink overall income levels at the same time.
"If (the city) has a lot of higher wages, they (we) have a lot of personal income," Henson said. "Its a good news/bad news situation in terms of competing for projects, it certainly gives (Memphis) an edge."
Overall, Henson noted, companies are looking for quality workers and will pay to get them, especially when unemployment has been low, as it has been in Memphis and Tennessee over the past four years.
"A lot of companies are not that cost-conscious in wages," he said. "Theyre quality conscious."
Most aspects of manufacturing have declined over the years, and Memphis has followed the trend, Ciscel said. What has hurt Memphis in particular, he said, is that the manufacturing sector has been owned mostly by out-of-towners. When restructuring or downsizing, the companies tend to view Memphis plants as outposts and consolidate closer to home. Hence, the layoffs with Kelloggs and the closing of the Kimberly Clark plant, he said.
The challenge is finding the balance.
A better-trained work force, higher wages and increased net job growth are all goals of the Memphis 2005 economic development platform unveiled by city leaders in November, Henson said.
"The city has got to remain competitive, but (we) have to have the quality, too," Henson said. "Thats what makes this whole thing difficult its all a trade-off."