Economists weigh in on possible reasons for Wichita-area job losses

The Wichita jobs report for August didn’t look good, at all.

Wichita metro households, in the survey from the Kansas Department of Labor, reported that 6,000 fewer people are working this August than in August 2014, a drop of more than 2 percent at a time the country is adding millions of jobs.

On a different survey, Wichita-area employers reported 2,000 fewer government jobs, along with a gain of 1,500 private-sector jobs.

Could job losses really be that big?

A couple of economists familiar with the report said it is telling us something, although they said there may be some statistical distortion going on, as well.

Tyler Tenbrink, a senior labor economist with the Kansas Department of Labor and one of the people who assembles the report, said it’s pretty clear to him that the job losses reflect the impact of baby boomers’ retiring.

The retirement has long been anticipated and feared nationally because of the loss to the work force and the increasing burden it puts on Social Security and Medicare.

Five years in, the impact has already been large and will only keep growing for another decade. In just the year between 2013 and 2014, the most recent year available, the population of retirees in the Wichita area grew more than 2,200, to more than 81,000, a nearly 3 percent increase, according to the Social Security Administration.

As a comparison, in 2008, before baby boomers’ retirement officially started and before the recession, there were just 71,000 retirees, 13 percent fewer.

Tenbrink said the missing workers don’t seem to be the laid-off and discouraged worker so often talked about during the years after the recession – although he said it could be older workers, either employed or unemployed, choosing to retire earlier than they planned.

“We dug into the data a little deeper and the majority of those people were 55 and over, so retirement is the likely reason,” he said.

Employers, confronted with the open positions, aren’t filling them fast enough to compensate. Tenbrink said that employers say they want to fill them. The number of positions listed as vacant in the state’s Jobs Vacancy Survey is up 5 percent from last year.

“If their workers retired, they may be looking, but taking their time, being selective and waiting for better candidates,” Tenbrink said.

Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University, said he suspects that some of those people who are no longer working have left the area. Wichita has a history of losing people to migration, particularly during times when other states are doing better economically.

“It could be that they migrated to move up in their career and that’s why both labor force and employment went down,” he said. “Especially in Wichita that might make more sense.”

But Hill says there may be some measurement problems with the data. He said he understands the pressure local governments have been under, but that he has talked to local officials and hasn’t personally heard reports of government job losses anywhere close to the 2,000 in the state report.

Wichita public schools spokeswoman Susan Arensman said that the district, which may be the largest public employer in the Wichita area, hasn’t experienced significant job losses, but she couldn’t say what the exact numbers were.

Hill pointed to the fact that schools aren’t in session for all of August and said the survey may have missed some of those it counted in August 2014. While some retailers have struggled in the past year, Hill said he doesn’t think the loss of 900 jobs cited in the state’s report is accurate.

Still, he said, the numbers are certainly pointing at something big, and not good, for the Wichita economy.

“Are these numbers really true? Something is driving the household data, the employment data,” Hill said. “But they’ll get revised. That corrects errors in the data.”

This story was originally published September 23, 2015 at 10:32 AM with the headline "Economists weigh in on possible reasons for Wichita-area job losses."