Dr. Don Bruce, director of the university’s Boyd Center for Economic Business and Research, told the State Funding Board at its November meeting that Tennessee employment is up by 195,000 since March 2020.

The state’s unemployment rate remains low at 3.2% compared to the national rate of 4.1%. But the labor force participation rate is still depressed at 59.4% in September, according to numbers he presented. The national rate is 62.7%.

“We think that has to do with in-migration of early retirees, it has a lot to do with people going to school, there’s lots of stories behind this,” Bruce said. “But I think what we’ve learned in the past few years is it’s really hard to turn that trend around with policy.”

If every unemployed person went to work in Tennessee, the state would still have 64,000 unfilled jobs, he said.

“Part of that is geographic, distribution of jobs versus distribution of available workers, it’s also skill mismatch sometimes but the bottom line is we can stand to have a few thousand more workers in Tennessee to keep up with this really interesting and strong demand growth,” Bruce said.

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The low labor force participation rate has affected wage growth. Tennessee remains below the national per capita income of $69,810 recorded in 2023 at $62,229.

“The punchline here is Tennessee continues to make ground on the U.S.” Bruce said. “We used to be 10 to 15 percentage points below the U.S. when it comes to any measure of cost of living or incomes. We are getting closer to that 10% range with our person income of $62,229 per capita.”