Eagle editorial: Mixed results on recovery
06/26/2014 5:45 PM
08/08/2014 10:25 AM
The good news is that Kansas employment levels are recovering from the Great Recession. The not-so-good news is that the recovery has been slower than in neighboring states and not enough to replace revenue lost from state tax cuts.
Gov. Sam Brownback has been highlighting Kansas’ low unemployment rate and the “record number of people working in the state.” Kansas’ unemployment rate was 4.8 percent in May, the 13th lowest in the country, and 1,427,872 individuals were employed in May, according to the Kansas Department of Labor.
A comparatively low unemployment rate is not unusual for Kansas. In January 2011, the month Brownback took office, Kansas had the 12th-lowest unemployment rate – though it was 6.8 percent. In 2008, before the economy crashed, Kansas’ unemployment rate was 4.4 percent. Still, the low unemployment rate is encouraging.
Though the average number of employed Kansans in 2014 is still below what it was in 2008, May’s employment total was a record high – which is very positive. Kansas also ranks fourth among all states for percentage growth in construction employment, according to a trade association.
So Kansas is on the road to recovery. The problem is that it’s been painfully slow.
From January 2011 through March 2014, Kansas’ rate of job growth was less than the rates of the nation and surrounding states. For example, Kansas’ growth rate during that time was 3.4 percent while Colorado’s was 8.2 percent and the U.S. average was 5.5 percent.
Even since Brownback’s income tax cuts kicked in January 2013 – when they were supposed to act “like a shot of adrenaline” – Kansas has trailed the nation and all neighboring states except Nebraska in job growth.
What’s more, the average weekly wage in Kansas declined by 0.4 percent in 2013. Kansas’ average wage of $832 a week was the 13th worst in the nation, the Kansas City Star reported. During the first quarter of this year, personal income in Kansas grew by only 0.2 percent – the fifth worst in the nation.
The record employment also is not generating enough tax revenue to cover state budget obligations. As a result, the state is spending more than it collects and could exhaust its cash reserves by next June. That’s why Moody’s Investors Service recently downgraded Kansas’ bond rating and why public schools and universities, social services and others that depend on state funding are so worried.
It’s good that Kansas’ employment is improving. It’s just not improving nearly enough.
For the editorial board, Phillip Brownlee