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Checking in on the recovery in Memphis

Marketplace Staff Jul 29, 2011

Checking in on the recovery in Memphis

Marketplace Staff Jul 29, 2011

Jeremy Hobson: A year ago, Marketplace sent me on a journey through the state of Tennessee for two weeks to see how the economic recovery was playing out. One of the people I met on that trip was AC Wharton, the mayor of Memphis. It’s a city of about 650,000 people, more than 60 percent of whom are African American. About 20 percent of the city’s residents live below the poverty line.

Given all of today’s news — the uncertainty in Washington, the slow growth in the U.S. economy — we decided it’d be a good idea to check back in with Mayor Wharton and get the view from Memphis.

Mayor Wharton, welcome back to the show.

AC Wharton: It’s great to be back, Jeremy.

Hobson: Well first off, how is the city of Memphis is doing in July 2011 in the economic recovery?

Wharton: Well our unemployment numbers obviously still stubbornly are low, but that’s something that I don’t think is driven as much by the immediate economy as just some historical situations that we have here. But our sales taxes are up; our job recruiting efforts are really strong. All in all, I would say that in the not-too-distant future, you’re going to see a pretty good turnaround here. But even with that, Jeremy, there’s some chronic conditions for so many of our residents and citizens we’re are going to have to work on.

Hobson: And when it comes to city finances, you — like all these other cities — are having to make cuts. I saw you are laying off about 100 people who work for the city, and cutting all city worker salaries by 5 percent.

Wharton: That is correct. You’ve heard of this slogan: “I’ve got a bullseye on my back”? I think I’ve got about 40 bullseyes on my back. And I say that, it might seem lighthearted, but it is a lot of pain. We’re having to cut, we’re serious about it. We’re reducing library hours. But one thing we haven’t done is, I took a pledge and I’ll keep pledge: I’m not going to lay off police officers or firefighters. We’ve got to maintain the public safety.

Hobson: Let’s talk about housing, because that was another big issue when I visited. You sued one of the big banks, Wells Fargo, for allegedly targeting Black homeowners with very risky sub-prime loans, and then a lot of those homes went into foreclosure. Has that suit moved anywhere?

Wharton: Well we did survive a motion to dismiss, fortunately about that. So there’s another motion pending, it’s still in court. Obviously, we have sustained great losses and we’ll seek to recover some of those. But the key thing that we want to hear is that those practices — well let’s put it this way: they say they did not do it. I will accept that — just agree don’t do it again.

Hobson: We talk about the national unemployment rate at 9.2 percent or so. When you think about the African American unemployment rate, it’s much higher. What does this recession, this recovery, look like in a city like Memphis that has so many African Americans?

Wharton: I’ve been in office for about 18 months, and during that time, there’ve been more than 10,000 new jobs created right here in Memphis. You might say, well where does that fit in? Tragically, Jeremy, there will be so many numbers among the ranks of African Americans who, because of lack of skills or criminal records, still will not be able to take advantage of this wave of recovery. So one of the things we’re going to work on is job development, economic development — coming up with programs to help those chronically unemployed and — I will say — unemployable in many instances.

Hobson: Well finally I want to ask you about the debt ceiling that’s going on in Washington. As you watch this go down, what are you worried about when it comes to Memphis? How are you at risk?

Wharton: Oh it’s already come to Memphis. It is hitting us now when we try to do bond placements, there’s much more scrutiny now. So don’t think for one moment that the effects of what’s happening in Washington remains within the beltway up there. So it is hitting us. There’s just too much uncertainty out there.

Hobson: AC Wharton, mayor of Memphis, Tenn. Thanks for joining us again and best of luck.

Wharton: Thanks for letting me talk with you for a while.

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