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KS: Percentage of working Kansans hits 27-year low

By   /   September 21, 2012  /   No Comments

Kansas unemployment rates dropped last month, but the percentage of working Kansans fell to 1985 levels.

By Gene Meyer | Kansas Reporter

FAIRWAY – Kansas’ job market is no country for old baby boomers, the state labor department reports.

More than 5,000 workers, most of whom are 55 or older, left the Kansas workforce in August, the Kansas Department of Labor said in its latest monthly employment report. It the latest in a string of such statistical departures economists have noticed most of this year. Some 6,100 workers similarly dropped out of Kansas job hunts in July.

The drop in potential job seekers, and the success of 3,400 more workers in July who landed new jobs, helped reduce Kansas’ unemployment rate to a seasonally adjusted 6.2 percent. It had been 6.3 percent in July and 6.7 percent in August 2011.

But the latest departures also drop what’s known as the labor force participation rate to its lowest levels in decades, which will have unknown consequences for future job growth in Kansas.

The rate is the percentage of the potential workforce that is either working or actively looking for work. Right now, only 67.9 percent of that workforce is working or looking for work, said state Labor Department economist Tyler Tenbrink. That’s higher than the national average 63.5 percent, but for Kansas, the lowest reading since February 1985.

Most of the workers who are dropping out and driving the rates lower are baby boomers who are 55 and older.

“During the recession, older workers – boomers – tended to put off their retirements and hold onto their jobs longer because they weren’t sure where the economy was going,” Tenbrink said. “Now that things are looking a little better, they feel more secure about leaving.”

Those retirements mean that 5,000 fewer Kansans in August, and 6,100 fewer in July, were looking for work, which helps make unemployment rates look better on paper.

Prospects for cutting employment rates by hiring more job seekers remain iffier.

Kansas has added nearly 18,000 non-farm jobs to the state’s economy in the last year, the state Labor Department said Friday. Some 17,000 of those are non-government jobs that economic developers and Kansas Gov. Sam Brownback prize.  He and other administration officials have estimated that new tax cuts, designed to spur the Kansas economy, will add 23,000 more jobs — and bring more than $2 billion in disposable income — after they kick in Jan. 1.

Even so, “there’s no way we can get back to our employment levels before the recession for years,” said Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research. Those levels are still some 35,000 jobs away, according to U.S. Bureau of Labor Statistics records.

And Kansas faces some hard slogging before any of those jobs return, said Ernie Goss, a Creighton University economist and forecaster who oversees monthly surveys of Kansas’ and other Midwestern economies.

Right now, those surveys point to contracting job opportunities, not expanding ones, because of drought losses and uncertain demand for farm and industrial products that Kansas exports, Goss said.

Recovery and employment prospects look weaker in rural Kansas than in urban centers, primarily because of the drought, he said.

“Crop insurance will help a lot of farmers, but they will be cautious about spending that money until conditions improve,” Goss said. “That won’t help those businesses in non-urban areas that sell to farmers.”

Contact Gene Meyer at gene.meyer@kansasreporter.org

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