Ky.'s job growth centers on cities, but wages lag

Kentucky has always thought of itself as a rural state, but the economic numbers tell a different story.

During the past five years, 45 percent of job growth statewide has occurred in the two most populous counties, Fayette and Jefferson.

Ten of the state's 120 counties accounted for 86 percent of job growth, while 50 mostly rural counties had fewer jobs in mid-2014 than five years earlier.

Because of stark regional differences, it's a bit misleading to talk about a "Kentucky economy," says Kentucky Chamber of Commerce president Dave Adkisson, which is why the chamber has commissioned economist Paul Coomes to analyze county-level data organized into nine economic regions.

The chamber released Coomes' latest analysis (Kychamber.com/2014economicdata) on Monday. It compares data from June 2009, the bottom of the last recession, and June 2014. Among the findings:

■ The Lexington, Louisville and Bowling Green-Hopkinsville regions had the highest growth rates in total jobs, exceeding the national rate. The mountain and Ashland regions have fewer jobs than five years ago.

■ Overall, Kentucky has trailed the nation in job growth (5.6 percent versus 6.3 percent) but surpassed the growth rate of all border states except Tennessee and Indiana.

■ Average pay per job continues to be an economic development challenge statewide. Only Northern Kentucky and Paducah-Purchase posted higher wage growth than the U.S. average.

In the Lexington region during the past five years, wage growth in all industries was 17 percent compared with 16.4 percent in Kentucky and 18.4 percent for the United States. In the mountains, wages declined 10.8 percent.

■ Kentucky has added manufacturing jobs at more than double the national rate and faster than any of its border states; average pay in manufacturing also has grown faster here than nationwide or in border states.

While the growth in manufacturing jobs is good news, it's also partly a function of how many manufacturing jobs were lost in the 2008-09 recession; Kentucky has yet to regain the number of manufacturing jobs it had at the peak of the last expansion — and might never because of increasing automation.

You can't draw too many conclusions from this economic snapshot, but it does reinforce the desperate need for SOAR and other efforts aimed at reshaping the mountain economy.

Also, policy-makers must recognize that cities are the economic engines of the 21st century and unlock the shackles placed on Kentucky's cities by a rural state's 19th-century constitution.