Employers struggle to fill jobs as unemployment drops in Tennessee and Georgia

Hiring signs in Ooltewah display efforts by local employers to lure more applicants to fill job vacancies.

With unemployment falling to the lowest rates yet since the COVID-19 pandemic upended the economy last year, Tennessee employers say they are having trouble getting enough workers to fill available jobs even as they boost wages to lure more job applicants.

A survey of Tennessee small business owners released Thursday showed that 85% of the businesses responding have job openings and 94% of those employers say they're having problems getting people to apply.

"Small business owners from Memphis to Bristol are hanging 'Help Wanted' signs and asking customers for patience because of the staffing shortage," said Jim Brown, state director for the National Federation of Independent Businesses (NFIB) which conducted the statewide survey."We've never seen anything like this and it's really holding back our economy."

Tennessee's career centers listed 262,741 job openings Thursday, or nearly 1.7 jobs for each of the estimated 155,240 unemployed Tennesseans looking for work last month "and that doesn't even include everyone who is hiring," Brown said.

The Tennessee Department of Labor and Workforce Development said Thursday that the state's jobless rate in April fell to 5%, down a tenth of a percentage point from the previous month and the lowest unemployment rate since the pandemic began shutting down much of the Tennessee economy more than a year ago.

Jobless in April

› 4.3% in Georgia, down from 4.5% in March› 5% in Tennessee, down from 5.1% in March› 6.1% in the U.S. as a whole, up from 6% in MarchSources: Tennessee Department of Labor and Workforce Development, Georgia Department of Labor

Tennessee's jobless rate last month was less than a third of the peak of 15.7% reached a year earlier after Tennessee employers added back an estimated 503,955 jobs in the past 12 months.

In neighboring Georgia, unemployment during April dropped another two tenths of a percentage point to 4.3%.

Both Tennessee and Georgia had lower jobless rates than the U.S. average of 6.1% in April.

But Tennessee's workforce last month was still down by 172,155 people from the number of people working or looking for work immediately prior to the COVID-19 pandemic hitting the economy in March 2020. The virus has caused some workers to rethink their careers and extra jobless benefits have provided extra funds for those who remain unemployed.

The hospitality industry shed more a fourth of its employment a year ago during the worst of the downturn, but restaurants, hotels and attractions are now seeking to staff up for what they expect will be a busy summer travel season.

"We are finding it still difficult just because of the volume of positions that we need to fully open this summer," said Hugh Morrow, president of Ruby Falls on Lookout Mountain. "All indications are that people intent to travel is strong and the summer demand will be strong also."

Brown said some restaurants have had to limit hours or even shut down some locations because of a lack of workers.

Brown said the Tennessee survey shows nearly 80% of NFIB Tennessee members have increased wages in the past year and that 18% from that group expect to increase wages again within three months.

The average manufacturing wage in Tennessee rose last month by 44 cents an hour to $21.25 an hour. Factory wages in Tennessee still average 9.4% less than the U.S. average of $23.44 an hour, however.

The NFIB survey found that 63% of owners having trouble finding applicants cite the current $300 weekly federal unemployment benefit as a primary reason.

"This survey and feedback from individual members show Tennessee is experiencing a crisis where available workers are remaining on the sidelines primarily because of the current federal unemployment benefit," Brown said.

The federal benefit is set to expire July 3 in Tennessee following Gov. Bill Lee's recent executive action. Tennessee is adding $50 to its maximum weekly benefit of $275, but Tennessee remains one of the lowest paying states for jobless benefits.

In Georgia, Gov. Brian Kemp is ending the federal supplement on June 26.

"We expect better days are ahead since Tennessee will be ending the benefit before the Sept. 6 federal expiration date, joining at least 19 other states, but the near term for many small businesses will remain exceedingly challenging," Brown said.

Contact Dave Flessner at [email protected] or at 423-757-6340.