Since the national recession ended in 2009, Kentucky trails the nation in growth of jobs, population and wages but is outperforming four of its seven neighboring states in those categories.
Economic growth in Kentucky has varied significantly by region, with the strongest growth in metropolitan areas and decline in the eastern part of the state.
Those are the key findings of a report about Kentucky’s economy released Monday by the Kentucky Chamber of Commerce.
The report, prepared by Paul Coomes, emeritus economics professor at the University of Louisville, gives a detailed look at what has happened in Kentucky and its nine regions since the end of the national recession.
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“Kentucky has progressed better than most of our neighboring states,” said Coomes during a media teleconference Monday with Kentucky Chamber President and Chief Executive Officer Dave Adkisson. He said a large part of that gain was attributable to growth in industries like health care, bourbon, distribution centers and aluminum.
Kentucky has fared better since the end of the national recession in June 2009 than neighboring West Virginia, Ohio, Illinois and Missouri, said Coomes. He noted that the economies of Tennessee and Indiana have outpaced Kentucky’s.
Still, Kentucky workers have seen their paychecks grow more than 12 percentage points slower than the national average.
Wage and salary growth in non-agriculture jobs in Kentucky rose 36 percent from the second quarter of 2009 to the fourth quarter of 2017, compared to 48.6 percent for the nation, the report said.
The state’s per-capita personal income was $39,393 in 2017, ranking 47th in the nation. It was lower than all bordering states except West Virginia.
A spokeswoman for Gov. Matt Bevin said it will take time for the full impact of the governor’s economic development efforts to be realized.
“Under Gov. Bevin’s leadership, Kentucky has been aggressive in our economic development efforts across the state, and the Chamber’s report confirms that we are starting to see gains,” said Elizabeth Kuhn, director of communications for Bevin. “Gov. Bevin has sent a clear message that Kentucky is open for business, and the 45,791 new jobs and nearly $16.5 billion in investment announced since the start of the administration (in December 2015) prove that companies are choosing to invest in Kentucky.”
The report’s worst news was for Eastern Kentucky.
Wages and salaries for non-agriculture jobs dropped 14.1 percent in the Mountains region, which covers most of Eastern Kentucky. It did note that the losses started leveling off in 2016.
According to the state Energy and Environment Cabinet, there were 14,716 coal jobs in Eastern Kentucky in mid-2009. That number dropped to 4,134 in the last three months of 2017.
“The decline in coal in Kentucky has been going on for decades,” Coomes said. “I think the problem in Eastern Kentucky has been that nothing has replaced the lost jobs. For example, Louisville used to be a manufacturing center. Now it has health businesses like Humana and other industries like Brown Foreman.”
Local officials in Eastern Kentucky said the coal industry’s collapse has devastated the region.
“It’s essentially trying to recover from an economic atomic bomb,” said Harlan County Judge-Executive Dan Mosley. “It’s going to take time to get people back to work.”
Several Eastern Kentucky counties have been hit hard by job losses since the recession. The chamber’s new report says jobs from June 2009 to December 2018 were down 39 percent in Knott County, 31 percent in Harlan County and 25 percent in Letcher County.
The chamber report said employment dropped 17 percent in the Mountains region, while most other places in Kentucky were adding jobs. The Ashland region also saw a decline in jobs.
Mosley said there has been some progress in diversifying the region’s economy. He noted that more than 200 people in his county have gotten jobs through Teleworks USA, a program of the Eastern Kentucky Concentrated Employment Project that trains people for work-from-home jobs.
The best growth regions were in the Golden Triangle of Lexington, Louisville and Northern Kentucky and the Bowling Green area.
Kentucky had 1.9 million non-agriculture jobs as of December 2017. That’s up about 180,000 since the end of the last recession.
Kentucky’s population grew by about 115,000 people between the 2010 U.S. Census and July 2017, a growth rate of 2.6 percent. The national growth rate was 5.5 percent. The latest estimate is that Kentucky has 4,454,000 residents.
The Lexington and Louisville regions accounted for 79 percent of Kentucky’s population growths. Three regions — Paducah-Purchase, Ashland and Mountain — lost population.
The Lexington region led in the number of people moving in from other parts of Kentucky. The city picked up 20,743 residents from in-state migration. In contrast, the Mountains region lost 23,700 residents.
The population decline in Eastern Kentucky could have a big impact on the drawing of boundary lines for U.S. Congress districts after the 2020 U.S. Census, said Adkisson.
Kentucky now has enough population for six congressional districts. “I don’t think Kentucky will lose a congressional seat but Eastern Kentucky may have to take part of Western or Central Kentucky to keep the districts balanced,” he said.