Yael T. Abouhalkah

Yael T. Abouhalkah: Kansas has low but misleading unemployment rate under Gov. Sam Brownback

Kansas Gov. Sam Brownback touts the state’s low unemployment rate as a big plus, although job growth has been among the worst in the nation over the last 12 months.
Kansas Gov. Sam Brownback touts the state’s low unemployment rate as a big plus, although job growth has been among the worst in the nation over the last 12 months. The Associated Press

Kansas Gov. Sam Brownback and his supporters constantly point to one statistic that they claim show the state’s economy is heading in the right direction.

“Our unemployment rate is one of the lowest in the nation,” Brownback bragged during his re-election campaign in 2014.

Earlier this year, Revenue Secretary Nick Jordan said the state’s rate was near historical lows as Kansas gained more jobs.

And just days ago, the Kansas Department of Labor highlighted the fact that state’s unemployment rate had dipped to 4.1 percent in October, compared to 5.0 percent for the United States.

It’s true: A low unemployment rate is a positive factor because it shows most everyone who’s looking for a job can get one in Kansas.

However, there’s a big problem with Brownback and others promoting the rate as an indicator that the state’s much larger picture of fiscal affairs is in good health.

Figures from the U.S. Bureau of Labor Statistics show that a state’s unemployment rate does not always correlate to how quickly or slowly the job market is growing.

And more jobs are an extremely important consideration in Kansas these days, because that employment is required to bring in much-needed tax revenues, especially in the income and sales tax arenas.

As it turns out, Kansas is a state with a misleading unemployment rate.

▪ Yes, Kansas had the 13th lowest figure in the nation in October. And the state’s rate has been close to the best 15 or so for much of the last year.

▪ However, over the last 12 months, Kansas also has tied for the 10th worst job growth rate in America, at only .8 percent. Kansas gained only 10,900 total nonfarm jobs in that span. The state has been in the bottom 10 for much of 2015 — despite Brownback’s often-claimed promise that his 2013 income tax cuts would bring a bonanza of jobs and revenue to the state.

All of this information helps explain why Kansans will be watching closely on Tuesday when the state releases its revenue numbers for November.

Just weeks ago, officials had to slash projections for the rest of the fiscal year that ends next June, particularly because of lower-than-expected sales tax receipts.

Brownback had to cut an additional $120 million from the current budget because of lagging receipts, jeopardizing highway and children’s funds along the way.

In addition, almost every state in America was projected to have a healthier general fund balance sheet than Kansas this fiscal year, according to a recent report from the National Association of State Budget Officers. And that was before Brownback’s most recent budget trims, which further reduced the state’s expected balance to a puny $5.6 million by next June.

Despite Kansas’ low unemployment rate, the Sunflower State’s job market isn’t particularly strong.

A few other states are in a similar situation. North Dakota has an extremely low unemployment rate of 2.8 percent. Yet, it actually lost 9,700 jobs in the last year. Wyoming comes in with a 4.0 percent unemployment rate, but has gained only 500 jobs in the last 12 months.

A few other states are even worse off than Kansas. West Virginia has a sky-high 6.9 percent unemployment rate and an economy drained of 13,700 jobs since October 2014. New Mexico’s unemployment rate is 6.8 percent and it added only 2,800 jobs in the last year.

Missouri’s unemployment rate of 5.0 percent matches the national average, but the Show-Me State’s job creation record was a lackluster 1 percent over the last year. That’s tied for 16th worst in the country.

Taking a deeper look at Bureau of Labor Statistics data, they reveal that the great majority of states are doing better than Kansas in gaining jobs.

In fact — of the 10 best job-producing states since October 2014 — eight have higher unemployment rates than the Sunflower State. All are gaining jobs at least three times as quickly as Kansas.

Nevada’s total workforce is slightly smaller than Kansas’ but that state added 42,000 jobs over the last 12 months. Nevada’s unemployment rate is 6.6 percent.

Oregon’s workforce is slightly larger than Kansas’ but that state gained way more jobs — 46,400 in a year — with a current 6.0 percent unemployment rate.

Finally, a few states have the best of both worlds.

Utah — whose unemployment rate was only 3.6 percent in October — had the nation’s second highest job growth rate over the last year.

Idaho came in at No. 1 for the last year in adding to its workforce. With a population barely half as big as Kansas, Idaho gained 25,100 jobs while having an unemployment rate of just 4.0.

Unlike Kansas, just to be clear, Idaho has done all this without costly tax cuts.

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