Report shows private-sector jobs, GDP and exports up in Kentucky, but earnings down as labor force dwindles
A new report from the Joint Economic Committee of Congress shows that while private sector employment, GDP and exports have increased in Kentucky over the last year, the average earnings of workers has actually fallen and job growth has stalled this year.
Congresswoman Carolyn Maloney, the ranking Democrat on the committee from New York, released the report on Tuesday highlighting economic data from each state, largely relying on figures from the Bureau of Labor Statistics to show the nationwide expansion of private-sector jobs in recent years. Kentucky was one of 37 states to have an increase in private-sector non-agricultural employment in July, though totaling only a meager 1,000 jobs.
The report shows that Kentucky businesses have added 23,200 jobs over the past 12 months, which is a decrease from the previous year’s increase of 29,300 private-sector jobs through that July. Kentucky businesses have added 166,100 private-sector jobs since the depths of the Great Recession in February 2010, amounting to an 11.7 percent increase — below the national increase of 14 percent.
Though Kentucky had a small increase in private-sector jobs in July, the state witnessed the fourth-highest percentage increase in manufacturing jobs that month, with 2,300 added. Kentucky has increased manufacturing jobs by 4,300 in the last year and 33,000 in the past five years — though has only now matched the pre-recession total from July 2008. Despite such manufacturing growth — and adding 38,400 private-sector jobs in the last eight months of 2015 — private-sector job growth in Kentucky has declined since the beginning of 2016, by 1,400, bureau statistics show.
Kentucky’s unemployment rate of 4.9 percent in July was the state’s lowest since 2001, though this figure’s magnitude is undermined by the fact that such a low rate is partially due to the continuing decrease in Kentucky’s labor force actively seeking employment in the separate federal Current Population Survey of households. While the number of respondents to that survey indicating they are both unemployed and searched for work in the past month continues its seven-year decline, it does not factor in those who are unemployed and not seeking work as being part of the labor force. After a steep decline of Kentucky’s labor force in 2013 and 2014, that number began to rise last summer through early 2016, but started to fall again over this year.
While economist Manoj Shanker of the Kentucky Education and Workforce Development Cabinet has previously cited the decreasing labor force as largely due to more baby boomers retiring as the economy improves, he noted in a recent press release that Kentucky’s low unemployment in July is “worth celebrating — as long as we remember that we still have to address our consistently low labor force participation rate.”
The economic report released by Maloney shows that while the national increase in real gross domestic product only increased by a modest 2.1 percent from the first quarter of 2015 to the first quarter of 2016, Kentucky’s grew by 2.6 percent over that time, and has matched the national average from the low point of the Great Recession in 2009.
It also showed that the average number of new housing units starting construction in Kentucky over the past year increased by 37 percent from the previous year, and goods exported from Kentucky totaled $28.2 billion in the last year — a 4.1 percent increase from the previous year and a 55.8 percent increase from its inflation-adjusted level in 2009.
While the report also shows that Kentucky had the largest decrease among all states in individuals without health care insurance from 2013 to 2014, the average earnings of Kentuckians is not improving. Though 41 states saw their workers’ hourly earnings increase the last year — going up 1.9 percent nationally — Kentucky’s actually decreased by 0.6 percent in that time, with the inflation-adjusted average hourly earnings of private-sector workers at $21.21 and average weekly earnings at $746.59.