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Kentucky Unemployment Rate Falls
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The Bureau of Labor Statistics has released its revised unemployment figures for January and they show that the unemployment rate in Kentucky fell two tenths of a percent, putting it at 8.8%. This extends a series of favorable reports that, since last summer, have shown a consistently improving jobs picture. It also shows, however, that at this rate of growth it will still be many years until the jobs lost during the Great Recession are replaced.

For the doubters among us who are inclined to wonder whether positive unemployment news really means that people have simply given up looking, the non-farm payroll numbers not only show increases, but fairly sharp increases. The non-farm payroll data also shows how far we still have to climb to get back to pre-recession levels... we're still 60,000 jobs short of where we were in January, 2008 when the recession was just beginning.

Employment gains during the recovery have been no more evenly distributed than the losses were during the recession.

The heaviest job losses during the recession came in Kentucky's manufacturing sector, which shed very nearly 50,000 jobs. Only 13,000 of them have been replaced so far. 13% of Kentuckians worked in manufacturing before the recession. Today that is 12%.

Another hard hit sector was what the Bureau of Labor Statistics calls "Trade, Transportation and Utilities". This sector accounts for more Kentucky non-farm jobs than any other sector and includes wholesale and retail enterprises, warehousing operations such as those doing fulfillment for Amazon and other e-commerce businesses, transportation services such as UPS, and utilities. This sector rapidly tossed 25,000 Kentuckians onto the unemployment roles during the recession. Since the recovery began, and not without some setbacks, it has added about 10,000 of those jobs back.

A brighter spot in the economy is the professional and business services sector, although there's some question about whether the beauty runs more than skin deep.

After shedding about 20,000 jobs during the recession, this sector has added all those back and about created about 10,000 more jobs on top. Among other things, this sector includes employment through temp agencies. If this number reflects a big shift from regular to temp agency employment at the big warehouse and fulfillment operations, it is a mixed blessing for the workers. Temp agency jobs almost always have lower wages, fewer benefits, and less job security than comparable regular jobs at the same operation.

The education and health services sector was barely phased by the recession and, after only minor job losses, has continued its strong growth ever since. Slight losses in the education part of this sector were mostly made up for with steady job growth in health care and social services.

If you wonder why people say they're going into health care for the job security... this is why. So long as the baby boomers remain a substantial part of the population, this sector will continue to see strong growth.

The strong growth in this sector, while other sectors have shed jobs, now shows up in other workforce numbers. Education and health care jobs now account for 14% of Kentucky non-farm employment, up from 13% early in 2008.

Two sectors that have declined with little, if any, sign of improvement on the horizon, are construction and financial services.

The construction sector is not as large in Kentucky as some of the sectors above, so the 20,000 construction workers who lost jobs in the recession amounted to almost 25% of the entire sector. And there is no sign of them coming back so far. Kentucky had fewer construction jobs this past November, at just 65,900, than it has at any time since the recession began. Construction once accounted for 5% of the jobs in Kentucky. Now it accounts for only 4%.

Financial services remain in similarly sad shape. In Kentucky, at least, this sector never had a crash in employment where thousands of people ended up out of work at the same time. Instead, this sector has seen a slow, steady, bleed from almost 93,000 jobs early in 2008 to 83,000 jobs in January, 2012. If you are dead set on getting that accounting or banking job back, you probably need to be thinking about moving.

There are two statistics that come out of these numbers that are also worthy of note. The first is that employment by the federal, state, and local governments in Kentucky remained all but flat throughout the recession. But because of the private sector job losses, government employment has increased from 17% to 18% of total non-farm employment in Kentucky.

The other is mining. For all the political power and media attention of the mining industry, mining jobs account for just 1% of Kentucky non-farm employment. And the mining job stats are also a little different. While almost every other industry was crashing in 2008 and 2009, some three thousand mining jobs were actually created. This is probably due to expansions designed to take advantage of the record fossil fuel prices that eventually became the trigger that started the crash. Those jobs have since gone away, leaving about 22,000 Kentuckians working in mining. That is all of 500 fewer mining jobs than there were in January 2008.

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Louisville.com's The Arena section features opinions from active participants in the city's politics. Their viewpoints are not those of Louisville.com (a website is an inanimate object and, as such, has no opinions).

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Keith Rouda's picture

About Keith Rouda

I'm a news junkie and politics addict. I stay up way past my bedtime to watch election returns come in. My free time is spent with MoveOn.org advocating for progressive policies. I have an MBA from Sullivan University and have worked in small businesses and large, in fields ranging from advertising, to health care, to information technology, to talent acquisition, to industrial quality. I moved to Louisville in 1995 and haven't looked back.

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