In tough economic times nothing hurts like unemployment. When people who want to work can't find jobs they suffer, as do their families and the larger economy. Spending falls off without a paycheck and tax collections get a double hit on both the payroll and the sales tax fronts.
So, there's every reason to let out a collective sigh of relief that in the preliminary numbers for February Kentucky's unemployment rate fell below 9 percent for the first time in three years. Not surprisingly, another number also reflects that improvement: tax receipts in February grew 3.8 percent, or about $21.2 million with about three-quarters of that gain from sales taxes.
Before anyone even begins to think about burning a couch to celebrate these numbers, though, a closer look makes it clear that Kentucky's problems are far from over or that higher employment alone is the path to a new prosperity.
In fact, this improvement reflects the hard realities that will surprise no one: We continue to lag the rest of the nation, many of the jobs don't provide anything close to a reasonable livelihood and there are still thousands of Kentuckians so discouraged that they are no longer looking for work.
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Unemployment is calculated by counting people who have looked for work in the past four weeks. Three years into a recession many people have simply given up. That's why, even though employment numbers show that our labor force has actually shrunk slightly, the number of people employed has grown.
For those finding work, a lot of the jobs are simply not very good. Temporary employment continues to grow as business owners, still leery of this economy, are choosing to turn to temp agencies when they need an extra hand rather than hire a permanent employee. "This practice boosts overall employment but will keep wages low," noted Manoj Shanker, the state economist who released the numbers,
The leisure and hospitality sector added 3,000 jobs in February and almost 7,000 from the year before. But people working in those jobs earned in an average week $274.48, toiling 25.7 hours at $10.68 an hour.
A more positive sign, explained partially by news this week that auto sales are booming, is that manufacturing employment has increased, particularly in the higher-paying durable goods sector. Manufacturing workers earned an average of $820.53 a week. Big difference.
In the midst of a downturn it's hard to figure out what can make a change and what role government can or should play. But longer term there's no secret about what government can do to help create more and better jobs. A broad and fair tax base, honest government and an educated workforce will produce a more vibrant economy.
State government has made huge strides in accountability and openness in the years since the BOPTROT scandal and the education reforms of the past two decades have developed a more educated populace by any measure. But there's always a danger of backsliding on public integrity, and investment in education is constantly threatened by tough budgets. Tax reform has languished too long with politicians afraid of the anti-tax lobby and special interests trying to retain their favorable status.
Kentucky workers, present and future, deserve a better shot at a good job.