Commonwealth Exceeds National Average in Job Growth; Purchase Area Lags Behind
A new Kentucky Chamber of Commerce report shows the Commonwealth doing better than the country in some areas of economic recovery since the 2007 recession.
The report uses wage and employment data from the U.S. Bureau of Labor Statistics.
Although both ends of the state saw a decline in manufacturing jobs, overall job growth across the state is at its highest since 2007, with Louisville, Lexington and Bowling Green-Hopkinsville regions leading the pack. However, the Paducah-Purchase region saw a 7.3 percent loss of manufacturing jobs while showing a 2.7 increase in overall job growth.
Read numbers from the report in full below:
The Kentucky Chamber's Senior Economic Advisor Dr. Paul Coomes says much of that has to do with technological innovation. While the state’s manufacturing industries have seen an uptick in the last three years, new technologies are allowing fewer people to produce more.
“It’s a point of contention, there are some people, some leaders around the state who believe that manufacturing employment is the future, I don’t," said Coomes. "I think manufacturing industries are the future, I think Kentucky is well-positioned for that. But manufacturing like mining and agriculture before it are just the kind of industries where through innovation you can give people more powerful tools and equipment and person makes a lot more widgets than they did before. And so what we’ve got is an expanding manufacturing output and a flat to negative employment base."
Although manufacturing is up across the state, Coomes doesn’t expect the number of manufacturing jobs to recover to peak pre-recession levels.
"There’s been a little pickup because of the recovery of the economy, but I don’t believe it will get back to the peak it had in 2007, which was lower than the peak it had in 1999 which is lower than the peak it had in 1989, etcetera," he said. "It’s almost like a ratchet, continuing to wind down.”
Along with the Paducah-Purchase region, the Ashland and Mountains regions in eastern Kentucky both saw a decrease in overall jobs, which Coomes attributed to a decline in coal combined with a steady population.
"Other areas have had industrialization or technological change but they’ve been able to replace the job losses in declining industries while showing job growth in growing industries and the Mountain area has not," said Coomes. "And for that reason it has continued to lose population. That region has lost 79,000 people since 1983 and if you look at the chart of it, it’s a pretty steady decline from its peak. So it’s not just a recent decline in the coal industry, it’s a 20, 30 year trend of a declining population."
Despite adding jobs across the state, Kentucky’s salary improvements are still lower than the national average. Coomes says that's because Kentucky industries focus more on distribution, assembly and back office operations, which tend to require less formal education and pay less.
"Part of it is cost of living," said Coomes. "We are a low cost of living place, so we’ll probably never have pay equal to the United States. Our low educational attainment and the industry mix that we have in Kentucky is such that the jobs just pay quite a bit less than the national average and that’s been true for a long time. We’ve been losing ground against the United States in average pay for about 25 years, it’s a long standing pattern."
Although Kentucky’s overall wage and salary is 26% lower than the national average, manufacturing jobs pay close to 6 percent more than most other states.