Economy of Memphis, Tennessee
Located on the Mississippi River, Memphis is one of the largest metropolitan areas in the Southeast, ranking 41st out of the top 75 according to a Department of Labor Release. Of the 40 metropolitan areas ahead of Memphis, only 12 are in the South, according to the Census definition The city has historically been one of the largest shipping hubs in the Mid-South, dating back to the Civil War, when the port was one of the largest on the Mississippi River and served as a shipping hub for the Confederacy.
As transportation methods developed, Memphis has continued to hold significance as a transportation hub. Now the city is home to the second largest cargo airport in the world, Memphis International Airport, and the world’s busiest domestic airport with 3.9 million metric tonnes. Memphis International Airport and Memphis has had huge significance in the railroad industry. The city has the 3rd largest rail center in the U.S. behind Chicago and St. Louis. It is also one of only four U.S. cities with five Class 1 railroads.
Because Memphis has been such an important city for transportation and shipping, it is attractive to businesses, especially those producing goods shipped nationwide. Three Fortune 500 companies, FedEx, AutoZone and International Paper Co. call Memphis home. These significant businesses have brought a large manufacturing industry. Of the 607,900 jobs in Memphis in July 2014, 209,900 are in the Manufacturing and Transportation industries, around 34.5 percent.
Over the years, the city has become less dependent on its manufacturing and transportation. Since the 1950s, the manufacturing industry has declined as businesses have moved off-shore for cheaper labor and the economy has since diversified and become more reliant on services. The Gross Domestic Product of the private sector good-producing industries have grown from $8,309 million to $11,459 million from 2003 to 2013. Over that same time period, the private sector service industries grew from $39,354 million to $48,641 million.
Model for economic development and forecast
Memphis has been one of the slowest cities to recover from the Great Recession that lasted from December 2007 to June 2009 according to Brookings Metro Monitor, and as a result, the city is currently recovering from it slowly and surely. A high unemployment rate just under 9 percent ranking 339 out of 372, in the city.
At the Memphis City Council meeting in June,(http://memphis.granicus.com/MediaPlayer.php?view_id=6&clip_id=4424&meta_id=243364 ) Mayor A.C. Wharton outlined a budget for the upcoming 2014-2015 fiscal year that was aimed at reducing the to offset the cities’ huge pension deficit without raising taxes. The budget predicted several economic trends, including: little growth in population and jobs, the outward migration of people and jobs, low cost of living and housing, and low taxes and no earned income tax.
The city ranks fourth in the country in unfunded Actuarial Accrued Liability. This means the city had the fourth highest amount of future retiree benefits that the municipality is unable to pay. The city cannot pay the insurance premiums because there are so many retiring and not enough taxes to cover those benefits. Essentially, the city is paying off the Other Post Employment Benefits with money it does not have and has not raised through taxes. Because this plan significantly impacted the city workers’ insurance plans, it was received with criticism in the council meetings. The council has assured constituents that they will search to find the money to keep the former insurance plan in place.
Publicly traded firms headquartered in Memphis
- AutoZone Incorporated (NYSE: AZO), operates over 5,000 auto parts stores in the United States and Mexico.
- FedEx Corporation (NYSE: FDX), world's largest airfreight firm.
- Buckeye Technologies (NYSE: BKI), maker of specialty fibers and nonwoven materials.
- First Horizon National Corporation (NYSE: FHN), operates First Tennessee Bank.
- Fred's Stores (NASDAQ: FRED), operates discount stores.
- GTx (NASDAQ: GTXI), drug company
- International Paper (NYSE: IP), manufactures paper products.
- Mueller Industries (NYSE: MLI), fabricates metal tubes and fittings.
- Thomas & Betts (NYSE: TNB), electrical components and connectors maker.
- Wright Medical Group (NASDAQ: WMGI), orthopaedic medical device maker.
- Verso Paper (NYSE: VRS), a pulp and paper company.
Private firms headquartered in Memphis
- Baker, Donelson, Bearman, Caldwell & Berkowitz, law firm
- Barnhart Crane and Rigging, specialty heavy lifting and heavy transport
- Belz Enterprises, develops, owns and manages real estate throughout the United States and Puerto Rico
- Guardsmark, security and investigation firm
- Katt Worldwide Logistics, a transportation firm
- Lenny's Sub Shop, restaurant chain
- Malco Theatres, an operator of movie theatres
- Ozark Motor Lines, a transportation company
- Perkins and Marie Callender's, restaurant chain
- ServiceMaster, operates numerous service-oriented companies, including TruGreen LawnCare, TruGreen LandCare, Terminix, American Home Shield, Furniture Medic, AmeriSpec, ServiceMaster Clean, and Merry Maids.
- Varsity Brands, manufactures uniforms and runs camps
- American Residential Services, also known as ARS/Rescue Rooter
- City Gear, a clothing store selling streetwear clothing.
Major divisions or operations
- Allenburg Cotton, part of Louis Dreyfus, trades and brokers cotton, along with shipping, ginning, and warehousing.
- Cargill Cotton, part of Cargill Incorporated, trades and brokers cotton, along with shipping, ginning, and warehousing.
- Carrier plant for central air conditioning, located in Collierville. Carrier is part of United Technologies.
- Evergreen Packaging, packaging company owned by Reynolds Group Holdings
- Information Technology world headquarters and data center for Hilton Hotels is located on Crossover Lane.
- Morgan Keegan & Company, Inc. investment banking firm, subsidiary of Raymond James Financial, Inc., Headquartered in the eponymous tower at Jefferson and Front streets in downtown Memphis.
- Nike, 1,000,000-square-foot (93,000 m2) footwear distribution center and other distribution facilities.
- Nucor Steel Memphis Inc. manufactures special bar quality carbon steel in a plant on Paul R. Lowry Road.
- Merck (formerly Schering-Plough) manufactures Coppertone, Dr. Scholl's, Solarcaine, and Tinactin products in a plant on Jackson Avenue.
- Orthopaedic Reconstruction and Trauma division world headquarters of Smith & Nephew is located on Brooks Road.
- Spinal and Biologics division headquarters of Medtronic is located in Memphis.
- Wonder Bread plant is located on Monroe Avenue. Wonder is part of Hostess Brands.
- Williams-Sonoma, primary global distribution facilities.
- Y&S Candies plant, which makes Twizzlers and Bubble Yum chewing gum, is located on Kansas Street. Y&S is part of The Hershey Company.
- Ducks Unlimited
- Methodist Healthcare, operates seven hospitals, multiple home health agencies and outpatient clinics
- St. Jude Children's Research Hospital, pediatric treatment and research facility.
- Internal Revenue Service, two service centers: Accounts Management Center and Compliance Service Center.
- Memphis Light, Gas and Water ("MLG&W") is also one of the largest municipal utilities in the United States.
- Naval Support Activity Mid-South (Millington)
- Regional Medical Center at Memphis (The Med), an acute-care teaching hospital operated by Shelby County.
The entertainment and film industry has also developed in recent years in the city. Major motion pictures filmed in Memphis include Making the Grade (1984), U2: Rattle & Hum, (1988) Mystery Train (1989), Great Balls of Fire! (1989), Trespass (1991), The Firm (1993), A Family Thing (1996), The People vs. Larry Flynt (1996), The Rainmaker (1997), Cast Away (2000), The Queens of Comedy (2001), 21 Grams (2003), Hustle & Flow (2005), Walk the Line (2005), Forty Shades of Blue (2005), and Black Snake Moan (2007), Nothing But the Truth (2008), and The Blind Side, (2009).
- Finger, Michael. Big Empties: Memphis landmarks that have stood vacant for years, waiting for someone to bring them back to life. The Memphis Flyer, December 4, 1997.
- Rushing, Wanda. Memphis and the Paradox of Place: Globalization in the American South. Chapel Hill: University of North Carolina Press, 2009.
- Rushing, Wanda. Memphis: Cotton Fields, Cargo Planes, & Biotechnology. Southern Spaces, August 28, 2009.
- "Large Metro Areas 2010 Census" (PDF). 2012-04-04. Retrieved 2014-09-28.
- "Population Distribution and Change" (PDF). www.census.gov. Retrieved 2014-09-29.
- "Museum of the City". Museum of the City. Retrieved 2014-09-27.
- Ohayon and White, Martine and Ryan. "ACI releases World Airport Traffic Report" (9/17/2014). Retrieved 2014-09-30.
- "Memphis Bragging Rights". Greater Memphis Chamber. Retrieved 2014-09-28.
- "Economy at a Glance". bls.gov. Retrieved 2014-09-31. Check date values in:
- "Regional Data GDP & Personal Income". bea.gov. Retrieved 2014-09-29.
- "Regional Data GDP & Personal Income". bea.gov. Retrieved 2014-09-29.
- "The Great Recession". stateofworkingamerica.org. Retrieved 10/1/2014. Check date values in:
- "Metro Monitor". Brookings.edu. Retrieved 10/1/2014. Check date values in:
- "Unemployment Rates for Metropolitan Areas". Bureau of Labor Statistics. Retrieved 2014-09-29.
- "Memphis Operating Budget" (PDF). Memphistn.gov. Retrieved 10/2/2014. Check date values in:
- "UNFUNDED OPEB PER CAPITA: CITIES" (PDF) (2/22/2013). Retrieved 2014-09-30.
- Koch’s Georgia-Pacific to Purchase Buckeye for $1.45 Billion Apr 24, 2013 Bloomberg.com
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- Ozark History
- Einat Paz-Frankel Hilton investing $14 million in Web Memphis Business Journal, November 23, 2007(Accessed November 6, 2009)
- Schering-Plough third quarter net income falls Memphis Business Journal, October 22, 2009(Accessed November 6, 2009).
- Memphis Merck Site Spared From Closure. Memphis Daily News.