December 18, 2015
Late this week, Kansans got two interesting pieces of economic data within 24 hours of each other. Let’s start with the second: the state’s latest jobs report for November.
Gov. Sam Brownback certainly liked what it had to say, based on a Tweet he sent out Friday morning.
What gave him this intergalactic sense of enthusiasm?
The state did register a slight drop in overall unemployment, down to 4.0 percent from 4.1 percent in October. A press release from the state Department of Labor also trumpeted the fact that Kansas has added 7,000 nonfarm jobs in the past year, a growth rate of 0.5 percent, and now employs a record number of people.
But some are saying there is a darker side to these numbers. (OK, last Star Wars reference.)
Yael Abouhalkah, columnist for The Kansas City Star, points out that in November, Kansas lost 2,600 nonfarm jobs, seeing the steepest decline in construction jobs. And, in fact, that 0.5 percent growth rate heralded in the state’s press release is one of the slowest job growth rates in the country.
If you’d like to digest the November labor report, you can find it here.
Let’s now examine the other bit of economic data that was released this week: a new report from the nonpartisan research group the Kansas Center for Economic Growth (KCEG) entitled “A ‘Lost Decade’: Revisiting Kansas’ past, so we can redirect its future.”
It provides an interesting counterpoint to the short-term enthusiasm displayed in the jobs report with more sobering long-term analysis.
Its central argument is that Kansas’ “failed tax-cut experiment” of 2012 was driven through on false claims that the preceding years had been a “lost decade” for the state.
“We look back and see that this was the rationale driving what have turned out to be unaffordable, unprecedented and pretty extreme tax policies,” said Annie McKay, the KCEG’s Executive Director.
That’s not to say the years 2000-2010 were easy ones for Kansas (or anywhere else).
Kansas, indeed, did see a downturn in the early years of this century but one that was not unique to this state. The report notes that between 2000 and 2010, Kansas lost 25,000 jobs, while the nation as a whole contracted, too. But it’s where and why the state lost those jobs that makes for interesting reading, and one McKay thinks the state should now consider as its economic struggles continue.
The report’s biggest takeaways:
- Of the 25,000 jobs lost in Kansas between 2000-2010, nearly half were concentrated in Wichita, an aviation hub hit hard by 9/11 and the resultant downturn in the aviation industry.
- Some areas of the state actually saw growth in that “lost decade.” For instance, Kansas City, Kansas, added 15,000 jobs in that time span.
- Kansas’s wage and salary growth post-2012 lags behind the rest of the nation, whereas between 2000-2010, the state outpaced the national average.
- Kansas’s share of the national economic pie, as measured by GDP, has declined since the 2000-2010 period.
McKay says the tax cuts were a blunt tool that attempted to fix economic issues that were different for each region of the state.
“We’d have been better off looking at individual areas within the state, saying ‘What’s going to help Wichita? What’s going to help Manhattan and Junction City? What’s going to help the KC Metro?’ Instead we got this blanket statewide policy that has largely been ineffective.”
Something needed to be done to help lift Kansas out of the post-9/11 downturn, McKay says, just not what was actually done.
“We had tools, things we’ve long invested in: our transportation system, K-12 education and higher ed. Those are the things that will help Kansas rebound and those are the exact things we’re pulling back from.”
McKay is slipping into the present tense because she thinks instead of 2000-2010 being a “lost decade,” the real “lost decade” is happening now, in the aftermath of the 2012 tax cuts.
Indeed, Kansas has been struggling mightily with its budget. Entering the new year, the state is projected to be $160 million in the hole. The state’s transportation department has been repeatedly swept of hundreds of millions of dollars to help the state pay its bills. Many state agencies have already been cut to the bone.
“The larger narrative here is that the path Kansas has chosen to travel down is both bankrupting the state and not producing the economic results it was supposed to,” McKay said. “If we want to get back to a path to prosperity, and invest in those things that make our state great and draw businesses here, we’re not really in a position to do that because we don’t have money.”
A different story, indeed, then the one being told by the state with its latest jobs report.
Read more from KCUR here.