Business

Unemployment drops to 7.5%

The Wichita-area unemployment rate plunged in April to 7.5 percent — the lowest rate since mass layoffs hit the area in the spring of 2009, according to the Kansas Department of Labor.

The rate is down from 8.3 percent in March and 8.5 percent in April of 2010.

"I really do think we are turning in the right direction," Keith Lawing, executive director of the Workforce Alliance of South Central Kansas, said Thursday.

The drop is a good news-bad news phenomenon, say experts.

The good news is that the figures show that about 1,000 more people worked in April than in March. Employment in the four-county area has been moving slowly upward since late last year and, at about 289,000 jobs, was the best non-summer monthly total since 2009.

A different monthly survey from the labor department showed an even stronger employment growth. The biggest beneficiaries were temp workers, said Yuan Gao, an economist with the Kansas Department of Labor.

Employers typically hire temps early in a recovery, when they are unsure whether increased demand will last.

The bad news — possibly — is that the number of people searching for work dropped by nearly 3,000. By leaving the labor force, this group had a big effect on dropping the unemployment rate.

Theories for where those people went include sitting at home as discouraged workers or leaving Wichita to find work. Or, it could simply be a statistical fluke.

Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University, said he suspects quite a few people have left Wichita in search of work in places that have recovered more quickly. It's probably mostly those in their 20s and early 30s, he said.

"They're less likely to own a house, and are likely having a harder time finding a job," he said. "They're more mobile and more likely to be discouraged."

Lawing said he is encouraged by the trends but still worries about continued hiccups in the aircraft industry, such as coming layoffs, already announced, at Hawker Beechcraft.

"We have several months to go before the big companies starting hiring in significant numbers to offset the job losses," he said.

The community won't really feel different until the aircraft industry starts rehiring in earnest in 2012, WSU's Hill said.

The area's blue-collar workers were laid off in great numbers, Hill said, while the white-collar workers were likely to remain employed, but fearful. Either way, he said, they stopped spending.

That leads to pent-up demand. When the city's aircraft plants start rehiring, he expects spending — and the jobs that hiring creates in retail, restaurants and services — to snap back.

"Once it comes back, it will feel strong," he said.

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