Kansas to have higher jobless rate than nation in 2018, memo says

The state’s economists predict that Kansas will have a higher unemployment rate than the nation starting in 2018.

Kansas has historically had a lower unemployment rate than the nation. In October, the state’s unemployment rate stood at 4.4 percent, slightly lower than the national average.

The U.S. Bureau of Labor Statistics reported Friday that the national employment rate had dropped to 4.6 percent in November, the lowest it has been since August 2007 before the onset of the recession.

Tyler Tenbrink, an economist with the Kansas Department of Labor, said the state expects the Kansas unemployment rate to rise to about 4.7 percent in 2018 based on current data. The Federal Reserve predicts a national unemployment rate of 4.5 percent for that year, Tenbrink said. He cautioned that the state and the Federal Reserve use different methodologies to make those predictions.

Tenbrink said the state’s unemployment rate held steady at around 4 percent for most of 2015 but has risen during the second half of 2016.

Gov. Sam Brownback and other state leaders have consistently pointed to the state’s low unemployment rate as proof that the governor’s tax plan is working.

However, during this past year the state has been losing jobs while the nation has made steady gains. The Kansas labor force decreased by 1 percent over a 12-month period in which the nation saw its labor force grow by 1.9 percent, according to a memo released Thursday by the nonpartisan Kansas Legislative Research Department.

The memo said the state’s “job growth has been stagnant since early 2015” and that “the current forecast calls for the (unemployment) rate in Kansas to exceed the national rate beginning in 2018.” This is one of several factors that prompted the state’s economists to lower revenue estimates for the current and next fiscal year in November.

The same memo shows that farm income is also projected to drop in the future and that “the overall value of crop production in 2017 is likely to be at its lowest level since 2009.”

“These projections underscore what Governor Brownback has said about the rural recession caused by global headwinds that continue to hit our agriculture and energy sectors,” Brownback’s spokeswoman, Melika Willoughby, said in an e-mail. “Moving forward, it is crucial to maintain a friendly business environment for job creators as we work to make Kansas the best state in America to raise a family and grow a business.”

Rep. Mark Hutton, R-Wichita, the outgoing House Commerce chair, called the agricultural market bleak.

“I was talking to a farmer the other day and they expect commodity prices to … take two or three years to come back up to where they need to be,” said Hutton, who is retiring from the Legislature. “And there’s some people who are not going to be able to weather that.”

Tenbrink pointed to construction as an industry where jobs have declined over the year.

“Construction has been down the most,” Tenbrink said. “They’re down 4,700 jobs. That’s comparing October of ’15 and October of ’16.”

Rep. Adam Lusker, D-Frontenac, who owns a construction business, said decreased public spending is one reason for the drop in construction jobs.

“Everybody that deals with state money has had to tighten their belts,” Lusker said. “A state has the ability to churn money and put it back in the economy. And that’s not a liberal view. That’s just the way it is. I build schools for a living, and right now those bonds aren’t getting passed.”

Lusker said his business has slowed down hiring this year.

“We’re not doing big jobs, so that trickle-down effect has been a killer,” he said.

Hutton, who also owns a construction company, was surprised to hear about the overall decline in job numbers for the industry.

“We’re hiring and I suspect that we will continue to hire through next year,” he said. “And if this economy keeps going like it has been, I think all construction companies will be hiring.”

This story was originally published December 3, 2016 at 4:04 PM with the headline "Kansas to have higher jobless rate than nation in 2018, memo says."