Most Kentucky cities slowly recovering from recession, report says

Most of Kentucky's larger cities are slowly recovering from the global economic recession that began in 2008, according to a study released Thursday by the Kentucky Chamber of Commerce.

Lexington, for example, saw 9.5 percent growth in workers' wages and salaries from 2008 through this year, said the study's author, University of Louisville economist Paul Coomes. However, that's less than 2 percent per year, compared with the city's average annual pay growth of 6.5 percent since 1969. The city's paychecks came back far more quickly after the "much milder" 2001 recession, Coomes said.

And job growth for the Lexington metropolitan area, which covers much of Central Kentucky, has been just 1.9 percent since the economy crashed five years ago, taking the region up to 263,000 jobs in October, Coomes said.

"Typically, Lexington is one of the fastest-growing places in the state," Coomes said Thursday. "So I was surprised to see Lexington was down there as one of the slower-performing places on these charts."

Lexington's sluggish rebound is disappointing given that the city is home to the University of Kentucky and several other good employers, including hospitals and technology firms, said Dave Adkisson, the chamber's president and chief executive officer. The data also suggests that Lexington — like many communities — is getting more service-sector jobs that don't pay especially well, Adkisson said.

"Obviously, we would like to see more wage growth, and we're all working to get more higher-wage jobs," Adkisson said. "There's a skills gap already present in Kentucky, and I think it's going to get worse before it gets better."

The chamber sponsored the study to chart economic conditions since the recession in Kentucky's most populous cities and counties, drawing on local payroll tax receipts and federal data. The results were mixed, Adkisson said.

Much of Eastern Kentucky continues to struggle, crippled by the loss of 6,000 jobs in shuttered coal mines, Coomes said. In some Appalachian counties, the majority of personal income isn't wages and salaries — it's government transfer payments from entitlement and assistance programs, he said.

However, Boone County in Northern Kentucky is performing well, boosted by new manufacturing and health-care jobs, and Western Kentucky looks promising, according to the study. Some of the most impressive numbers for job creation and pay growth came from Owensboro, where a new hospital was built recently, and the counties near Fort Knox and Fort Campbell, where the federal Base Closure and Realignment Commission is establishing better-paying jobs as part of the installations' upgraded missions.

Fort Knox, for instance, is getting thousands of jobs and several major construction projects, and the average wage has jumped from $44,000 a year to $55,000 a year, Adkisson said. From 2007 to 2012, Hardin County saw a 25.2 percent leap in pay growth, about three times what Lexington did, according to federal data cited in the chamber's report.

In Central Kentucky, Richmond and surrounding Madison County benefit from the $1.8 billion chemical weapons destruction plant being built at the Blue Grass Army Depot, Adkisson said.

"Clearly, the military spending we've seen during a period of two wars has pumped money into these communities," Adkisson said.

The report gave different sets of numbers for payroll growth: one for cities or counties based on their tax receipts from 2007 to 2013 and the other for counties based on estimates from the U.S. Bureau of Economic Analysis from 2007 to 2012.

Based on local tax receipts, the top payroll growth was seen in Boone County (26.6 percent), Richmond (20.8 percent), Bowling Green (20.3 percent) and Owensboro (19 percent). Based on the BEA estimates and excluding the year 2013, the top payroll growth was in Hardin County (25.2 percent), Madison County (21.6 percent), Christian County (17.4 percent) and Boone County (11.1 percent).

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