Kentucky Unemployment 7.1% - Highest in 17 years

Official unemployment in Kentucky is the highest it's been in almost 17 years.

Kentucky’s seasonally adjusted preliminary unemployment rate for September 2008 rose to 7.1 percent from August 2008’s revised 6.8 percent, according to the Office of Employment and Training (OET), an agency of the Kentucky Education and Workforce Development Cabinet. September 2007’s jobless rate was 5.4 percent.

The U.S. seasonally adjusted jobless rate stayed at 6.1 percent from August 2008 to September 2008, according to the U.S. Department of Labor.

Did you get that? Unemployment in Kentucky increased 0.3 percentage points - about four percent - in just one month. Since September 2007, it's up 1.7 percentage points - almost one-third higher in a year. It's a full percentage point higher - 15 percent worse - than the national rate.

Unemployment in Kentucky has not been this high since the 7.4 percent rate in January 1992 - 16 years and eight months ago.

(More after the jump.)

“Nearly every sector of Kentucky's economy experienced job losses in September 2008, showcasing widespread economic weakness. Employment declines reflect government cutbacks in the face of austere budgets, a prolonged manufacturing slump reverberating throughout the economy, and retailers and accommodations and food services enterprises suffering as financially strained consumers clamp down on discretionary spending,” said Justine Detzel, OET (Office of Employment and Training) chief labor market analyst.

SNIP

The monthly estimate of the number of unemployed Kentuckians for September 2008 was 145,843, up 6,790 from the 139,053 Kentuckians unemployed in August 2008, and up 35,400 from the 110,443 unemployed in September 2007.

There's an old unfunny joke about the difference between a recession and a depression: When your neighbor loses his job, it's a recession. When you lose your job, it's a depression.

And if 1992 sounds familiar for more than the crummy economy, it's also the year Kentucky reversed its republican trend and voted for the Democratic presidential candidate.

For details on employment in various sectors, read the whole release.

Cross-posted at Blue in the Bluegrass.

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Obama in Kentucky: One Step Forward, Two Steps Back

For a minute, it looked like rising unemployment in Kentucky would give Barack Obama's presidential campaign a boost here, but by then he'd blown that opportunity by choosing a speech in Orlando over charming the Midwest at Fancy Farm.

Kentucky's unemployment rate rose to 6.3 percent in June, up from 6.2 percent in May. It's now almost a full percentage point higher than the national rate of 5.5 percent.

More specifically, since June 2007, unemployment has gone up in 108 of Kentucky's 112 120 counties.

The eight counties with the highest unemployment - 9.9 to 11.8 percent - are all in Eastern Kentucky, the exact region where Obama received the fewest votes in the May primary. Obama has a huge opportunity there to make an economic case for his candidacy.

Come to Kentucky, Barack. Look us in the eye and tell us that you're going to reverse the screw-the-middle-class policies of the last seven years. Tell us how you're going to wean us off our dependence on coal industry jobs while you wean the nation off its dependence on coal-burning energy.

You say you've got a 50-state strategy. Kentucky is a state that's yours for the asking.

But you have to ask.

Cross-posted at Blue in the Bluegrass.

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Economics roundup – lies about unemployment, from Paulson and on housing

First, it’s clear the federal unemployment rate doesn’t really measure unemployment:

This month's jobs report is a great example of how misleading the unemployment rate can be. In February, the economy shed 63,000 jobs, which is a strong indication a recession may be at hand. But the unemployment rate actually fell, to 4.8 percent from 4.9 percent.

As most people know, it only counts people actually looking for work. But, that’s not the worst of its pitfalls.

Here, if you work for a temp agency, even if you want a “regular job” instead, you're considered “employed.” In Germany (or it used to be that way, at least), you’re considered “unemployed.” (I don’t know about other European Union members.)

The Nation had an in-depth article on this in the late 1990s. At that time, Manpower was the largest employer in both the U.S. and Germany.

Other “apples and oranges” comparisons problems on U.S. versus E.U. employment stats?

Most European countries have some sort of universal service; whether you’re in the military or in alternative service, you're not counted in employment stats. In America, with the all-volunteer armed forces, you are.

And, the U.S. “War on Drugs” incarcerates many people who likely would be unemployed, plus creates (often low-paying) jobs that don't exist to that degree in most E.U. countries.

Meanwhile, Treasury Secretary Henry Paulson just can’t stop lying. This time, it’s about the definition of “regulation”:

The SEC should also consider streamlining the approval for any securities products common to the marketplace as the agency did in a 1998 rulemaking vis-a-vis certain derivatives securities products. An updated, streamlined, and expedited approval process will allow U.S. securities firms to remain competitive with the over-the-counter markets and international institutions and increase product innovation and investor choice.

Last I checked, “streamlining” wasn’t listed under “tighter regulations” in a financial dictionary. (Except for one paid for by Wall Street.)

And, that’s the problem. Other “regulating” in Paulson’s playbook include loosening Securities and Exchange Commission regulations per the 2000 Commodity Futures Modernization Act.

But, for Democrats who want to be smarmy about being “reform minded”? This was a bill that passed the House under suspension of the rules, requiring a two-thirds vote in exchange for killing off debate. It only had four no votes. (And, don’t forget, this contained the infamous “Enron loophole.”)

And, although nobody wants to break ranks, it appears a fair amount of what Congress is pegging as “housing relief” is also a lie. Sen. Johnny Isakson’s plan to give people who buy foreclosed houses a temporary tax credit sounds like the biggest part of the lie so far:

“Basically, you're giving money to builders that overbuilt and banks that issued bad loans,” said Dean Baker, co-director of the Center for Economic and Policy Research. “It’s giving money to the villains in this story.”

That’s really not the only part of the lie, though:

Economists also questioned how effective it would be to have local governments buy and refurbish foreclosed homes. Advocates of the idea say it would stabilize neighborhoods and protect home values, but the White House said it would benefit lenders most.

“The funding to purchase homes does nothing to help homeowners struggling to make their mortgage payments,” White House spokesman Tony Fratto said.

Well, even a stopped calendar is right once a year.

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Unofficial Economic Indicator: Food-Stamp Use At Record Levels

Food stamps have been distributed in the U.S. since the 1960s. I'm fortunate enough to have never needed them -- although my family had a very close scrape, when my dad became terminally ill and disabled when I was 11. One thing I've learned is that things have to go very badly, for a while, for one to even qualify for the program.

Those who follow business news have no doubt heard the bad news about economic indicators such as retail sales, durable goods orders and the like. I propose to add one to the list: food stamp use. It is projected to reach, this year, its highest level since the program started over 40 years ago. I'll repeat -- just qualifying for this program is tough. So this is a very significant economic development.

This is from today's New York Times:

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.

The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 - to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

Federal benefit costs are projected to rise to $36 billion in the 2009 fiscal year from $34 billion this year.

"People sign up for food stamps when they lose their jobs, or their wages go down because their hours are cut," said Stacy Dean, director of food stamp policy at the Center on Budget and Policy Priorities in Washington, who noted that 14 states saw their rolls reach record numbers by last December.

One example is Michigan, where one in eight residents now receives food stamps. "Our caseload has more than doubled since 2000, and we're at an all-time record level," said Maureen Sorbet, spokeswoman for the Michigan Department of Human Services.

Officially, U.S. unemployment isn't very high now. To wit, from the Bureau of Labor Statistics on March 7:

Nonfarm payroll employment edged down in February (-63,000), and the
unemployment rate was essentially unchanged at 4.8 percent, the Bureau of
Labor Statistics of the U.S. Department of Labor reported today. Employment
fell in manufacturing, construction, and retail trade. Job growth continued
in health care and in food services.

With a 4.8% jobless rate, there is now more food stamp use, both in totals and in percentage of the population, than during the now-underestimated recessions of the mid-'70s and the early '80s. Back then, joblessness sometimes topped 10 percent. I recall those recessions well -- I was in college working summer jobs during the first, and a recent M.A. graduate looking for work during the second. I think there's something wrong with this picture. Why wasn't food-stamp use greater then than it is now?

Let's read between the lines. "Employment fell in manufacturing, construction, and retail trade. Job growth continued in health care and in food services."

A lot of this probably has to do with the types of jobs people can get now, and how the U.S. economy has been essentially restructured for wage- and salary-busting.

Fewer jobs in unionized manufacturing -- they're being rapidly offshored to nonunion and lower-wage settings. Fewer jobs in construction -- those jobs tend to pay well while they last, but when they're not there, times get tough. Retail -- people have to have money to buy things.

On the plus side: health care? I've spent enough time monitoring elderly people at nursing homes and assisted-living facilities to know that many of the workers are barely getting minimum wage. Food services? Forget it. In college, I had a girlfriend who was a waitress, and she complained about the pay and tips even back then, in a college town. You won't make much unless you're a certified chef, or better still, if you own that relatively rare asset that is a successful eatery.

As for the unemployed -- the stats reflect only those we know about. Not reflected are those who have, in despair, quit looking for work. Nor do they include those who have found some niche in the underground economy.

I would dare say that another factor is the so-called "welfare reform" by the Congress in 1996. The welfare rolls are indeed down sharply -- but people still feel the urge to eat. Forced to work in low-wage jobs, the erstwhile recipients generally still need the food subsidy. And, by the way, with all those new people dumped into the low-wage labor pool over the past 12 years, is it surprising that wages have declined? And with that, food-stamp use has increased?

And of course, let's not forget what effect the subprime mortgage crisis has probably had on millions of family situations. I suspect it hasn't helped.

I've had enough dealings with the business press to know that my proposal here will never fly. But I'll have a go at the windmill anyway. Food-stamp use should be included on the list of leading economic indicators. Perhaps our business-page readers should know how things are going for the bottom 10 percent, not just the fat cats.

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