UT Study: Department of Energy is Major Player in Tennessee Economy

KNOXVILLE – The Department of Energy (DOE) continues to be a major force in the state’s economy with its offices and laboratories attracting a well-educated workforce, providing more than 12,000 jobs and paying an average salary significantly higher than the state average.

UT’s Center for Business and Economic Research (CBER) recently completed an in-depth analysis of the economic impact of DOE on the state economy. This study, which looked at fiscal year 2008, is the eighth such report CBER has done for DOE. Previous reports were done for fiscal years 1998, 1999, 2000, 2001, 2003, 2004 and 2006.

Among the findings:

– DOE and its major contractors in Tennessee directly provided 12,373 full-time jobs in 2008.

– Annual wages and salaries associated with these jobs totaled $803.4 million.

– The average annual salary of a DOE employee in 2008 was $64,687, significantly above the state average.

– Of DOE employees in 2008, 1,036 held doctorate degrees; 1,820 held master’s degrees; and 3,675 held bachelor’s degrees.

– DOE and its contractors purchased more than $926.7 million of goods and services from in-state businesses in 2008 and paid about $29.4 million in state and local taxes.

The report also explains that every job, every salary and every dollar spent by DOE ripples across the state’s economy.

“Not only does DOE make purchases from in-state businesses, it employs a sizable workforce and those people dine at restaurants, buy goods from retailers and otherwise support the local economy,” said Matt Murray, CBER associate director and lead researcher on the study.

Through this ripple effect, UT researchers estimate that every DOE job helps create about 3.7 jobs across the state. Each dollar of income directly paid by DOE in the state translates into $2.08 in personal income for Tennessee residents. The total personal income generated in the state by DOE-related activities was about $2.3 billion in 2008.

Further, CBER economists estimate that DOE’s payroll and nonpayroll spending led to a $4 billion increase in the state’s gross domestic product, the market value of all final goods and services produced. Looking again at the ripple effect, researchers estimate that for every dollar directly spent by the DOE in Tennessee, the state’s gross domestic product increase by $1.87.

Two other statistics also were significant:

– DOE, its contractors and their employees donated more than $5.7 million in charitable contributions, community grants and equipment to organizations across Tennessee in 2008.

– The American Museum of Science and Energy drew 85,689 visitors during fiscal year 2008.

“The presence of DOE and its contractors in Tennessee gives rise to many benefits, both quantitative and qualitative,” the report concludes. “The jobs provided are most often high-skilled, high-paying jobs resulting in a high equality workforce comprised of some of the top researchers in their field.

“The presence of the DOE also provides the state with national recognition as a leader in manufacturing, advanced materials, neutron sciences, biological sciences and transportation technologies. With its (research and development) capacity and technology sharing programs, the DOE plays a significant role in enhancing Tennessee’s competitive position in attracting private firms to locate with the state.

“In addition, the DOE is active in bringing federal research grant money to the state and its institutions of higher education. The DOE facilities provide an excellent resource to the University of Tennessee through expanded research capabilities and academic programs.”

The Department of Energy has three main operations in Oak Ridge — the Oak Ridge Office (ORO), the Y-12 Site Office of the National Nuclear Security Administration, and the Office of Scientific and Technical Information (OSTI).

Major DOE facilities in Oak Ridge include the East Tennessee Technology Park, the Oak Ridge Institute for Science and Education, the Oak Ridge National Laboratory, and the Y-12 National Security Complex.

C O N T A C T S :

Amy Blakely (865-974-5034, amy.blakely@tennessee.edu)
Matt Murray, CBER, (865-974-6084, mmurray1@utk.edu)
Mike Koentop, DOE, (865-574-3264, koentopm@oro.doe.gov)