Tom Martin Q&A: Stats guru Ron Crouch says Kentucky, southeast could be 'new economic engine'

Contributing columnistMarch 23, 2014 

Ron Crouch is the director of research and statistics, Kentucky Education and Workforce Development Cabinet in Frankfort. He oversees the development of databases on demographic, social, educational, workforce, and economic issues and trends relating to life in the commonwealth. You might say he is Kentucky's "Statistics Whisperer" — able to tease from the numbers portraits of the forces in play around us.

Tom Martin: From the numbers that cross your desk, what can you tell us about the condition of the Kentucky workforce today?

Ron Crouch: Certainly we've got both our opportunities and challenges. The northeast is in major decline, population and jobs. The Midwest is in major decline. The southeast could be the new economic engine if we play our cards right and make the right investments. I think Kentucky, Tennessee, North Carolina and Virginia have the most potential to do well. Unfortunately if current trends continue, the southwest — California, Texas, Nevada and Arizona — are headed toward being the new Appalachia, poorly educated, poorly skilled and not prepared for the 21st century. So Kentucky has opportunities. We have good roads. We have four seasons. And we have water. Water may be the new oil. Guess what Southern California, Texas, Florida and Georgia don't have? Guess what China and India don't have? They've got major water problems. So we've got a lot of things to be positive about but we need to get our educational levels up. We do rank near the bottom there. We are improving, but we need to have enough revenue to make sure we have a good educational system. We don't want to keep raising tuition on our students and keep them from going to college.

Martin: We've heard a lot in recent years about a brain drain in Eastern Kentucky. You've shown us some data that runs counter to popular perceptions about the region, especially the percentage of the population with bachelor's, graduate and professional degrees. What can you tell us about that?

Crouch: The 2007-12 American Community Survey, which is put out by the U.S. Census, showed the number of people with a bachelor's degree and a master's degree had gone up fairly dramatically in a number of Eastern Kentucky counties. And on the opposite end of that, the number of people with no high school diploma went down dramatically. So the data is showing actually Eastern Kentucky is becoming much better educated.

Martin: Lately on the state level we've heard about the governor's economic development initiative, SOAR (Shaping Our Appalachian Region) and on the federal level, the so-called Promise Zones announced recently by the Obama administration. But is Eastern Kentucky in the meantime transitioning to some sort of new economy on its own and what does that look like?

Crouch: We've actually for the last 20 years been starting to reinvent the Eastern Kentucky economy. I keep hearing about the war on coal. Well, the number of coal mining jobs in Kentucky in 1940 was 80,000. Today it's about 12,000. It's been going down for 70 years. Coal production has been going down for about 15 years now. In fact, coal is the fifth largest employer in Eastern Kentucky. Health care is much larger, retail trade is larger, education is larger and manufacturing is larger. Now, losing those coal mining jobs in Eastern Kentucky is certainly a problem because they were high-paying jobs and jobs for mainly men who did not necessarily have enough education.

The good news is, in the Fifth Congressional District they created about 7,000 jobs in the last 10 years over what they had. And that number went from about 207,000 in 2002, the latest data actually shows us up to 215,000. Of those jobs, 22,000 were in health care. The next highest growth area was in the area of professional scientific and technical employment. So we are starting to see some turnaround.

Martin: You've been looking at numbers lately as they pertain to young adults who are just getting out into the world and becoming established. What are you seeing?

Crouch: This is somewhat discouraging. And this is not just a Kentucky issue, this is a national issue. There's a new report out by the Georgetown University Center for Education and the Workforce showing that at all educational levels our young people 18—34 are not doing as well as far as their incomes. The good news is, the better educated you are, the less a problem that is. But even college graduates now are doing less well.

This new data shows that basically half of all young women now in this country are working part-time instead of full-time and basically two-thirds of young men are working full-time, but one-third are working part-time. So we seem to be going to an economy where more people are working part-time with fewer benefits and at lower salaries. I think that's a problem for the country and a problem for business. My spending is your income, your spending is my income. If young people don't have income, that hurts our economy.

Martin: Are today's young adults delaying or are they being delayed in launching their careers and why?

Crouch: I think that is a very important question. With the recession we've seen less hiring, and more of that hiring has been part-time and at lower wages. One of my concerns is where the jobs have been growing. We're showing that 71 percent of new jobs projected between now and 2020 require a high school degree or less — jobs in food services, retail trade, things like that.

Martin: It's been six years now since the downturn began in earnest and then we fell into the great recession. ... We've been hearing economists say pretty consistently that after all those years of watching stagnation they're now seeing some momentum. Of course, you deal with statistics, which capture what's happened in the past, but can you use the data to look at where we might be going, and are these economists accurate in their assessments?

Crouch: We've got to rethink the whole issue of where our economy is growing. And we need to make the proper investments. I do think education does pay. We know that people who are educated have much lower unemployment rates and much higher incomes. But we also know from the data that a large part of our economy is still people who work in middle-level jobs that don't require as much education. I fully support raising the minimum wage. I know that's an issue for businessmen. But if I have money in my pocket, I'm going to spend it. And businesses have to have people who can buy their products. We can't have trickle-down economics where the money is all concentrated at the top.

If we have a strong middle class we can continue to grow our economy. I think for the last 30 years we have been losing that middle class. We need to somehow reinvent our middle class in this country, and if we can do that we can have a booming economy again. Through history, the individuals who invented products came out of the middle class and the lower class who were improving their condition. It didn't come out of the wealthy. It was the middle class and the lower class that invented things in their garages, in their basements. And we need to secure that again. Small- and medium-size businesses really are where we are getting our job growth. But if we're making it harder for them to get financing and we're not having government and private sector working together to build our economy, I think that's harmful.

Tom Martin's Q&A appears every two weeks in the Herald-Leader's Business Monday section. This is an edited version of the interview. To listen to the interview, find the podcast on Kentucky.com. The interview also will air on WEKU-88.9 FM on Mondays at 7:35 a.m. during Morning Edition and at 5:45 p.m. during All Things Considered.

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