Legislative Update: The Economy in the Commonwealth
In its latest annual look at the commonwealth’s economy, the University of Kentucky’s Center for Business and Economic Research writes that there isn’t one Kentucky but three, with “one thriving, one treading water and one struggling.”
The statistics bear that out, with some showing we’re doing quite well and others highlighting the persistent challenges that remain.
On the positive side, we’ve now strung together five straight years of being ranked first or second among the states when counting the per-capita number of new and size-able economic-development projects.
This list is compiled by Site Selection, a national publication that tracks industrial growth. A project qualifies if it creates 20 or more jobs; adds at least 20,000 square feet of space; or has a capital investment exceeding $1 million.
Companies announced 228 of these projects in Kentucky last year, putting us second behind Nebraska when adjusting for population. Even when making a straight-up comparison, however, we still ranked fifth overall, ahead of such larger states as California, Florida and Virginia.
Several of our communities shined when taking a closer look at where these developments are being built. Bowling Green, for example, was the best in the country among metro areas having 200,000 or fewer people; Northern Kentucky/Cincinnati ranked sixth among metros with one million or more people; and Lexington was eighth when looking at communities having 200,000 to 1 million people.
Many of our larger economic-development projects easily exceed the criteria Site Selection use, and there have been several major ones over the last few years. Nucor Corporation alone has announced two since last September that, combined, total $2 billion in investments. Part of that is an expansion of its Gallatin County facilities, and the second is the addition of a new steel-plate manufacturing mill in Meade County.
Other companies investing hundreds of millions of dollars here in recent years include such well-known companies as Ford, Toyota and Amazon.
These gains are helping Kentucky reach some impressive milestones. Our nearly $32 billion in exports last year set another record, and our unemployment rate has been at or near its lowest level since this category was first measured in 1976.
More than two-thirds of the corporate projects announced in Kentucky last year came from businesses expanding their presence, which is a great sign that they like it here, while more than half of those announcements will be located outside the 10 most populous counties, according to the Cabinet for Economic Development. Many of these positive developments have taken many years to come to fruition and we owe our predecessors a deep debt for “setting the stage” so to speak.
As UK’s Center for Business and Economic Research wrote, though, not all of the news economically is positive for Kentucky. Census figures from last fall show we have the fifth-highest poverty rate among the states, and three-fourths of our elementary and secondary students qualify for free or reduced-price meals.
Employment growth over the past year was just under one percent, and gains in personal income trailed the national average between 2012 and 2017.
According to Governing magazine, no state has a greater percentage of people earning minimum wage than we do, and Kentucky’s rate – which is tied to the federal minimum wage – has not changed in a decade, even as nearly 30 other states have raised theirs.
Some of our poorest counties only employ a third of their eligible workforce, and we lag the national average in creating high-paying jobs in STEM fields, which stand for science, technology, engineering and mathematics. While some states saw these sectors grow by more than 30 percent between 2007 and 2017, Kentucky’s rate was much lower at eight percent.
These and other statistics show that we’re doing a lot of things right as a state, but there are still too many people treading water or struggling. Looking ahead, our challenge is to take the success we’ve built and find ways to help more people enjoy those gains. Just reaching the national average in some categories I just mentioned would make a tremendous difference.
I would like to know your thoughts about this, or any subject affecting Kentucky. You can write to me at email@example.com, while the toll-free message line for all state legislators is 1-800-372-7181. If you have a hearing impairment, the number is 1-800-896-0305.
Thanks for all you do and holler anytime.