Originally published at Pelican Institute. 

Originally published at Kansas Policy Institute.

​Like many states, Kansas has a complex economic situation in 2024. The latest Bureau of Labor Statistics (BLS) data provide a blurry picture of the state’s employment situation. While nonfarm employment numbers offer some signs of stability, a closer look at the household employment data reveals potential challenges that warrant careful attention.

Understanding Nonfarm and Household Employment Data

To fully grasp Kansas’s employment trends, it’s essential to differentiate between nonfarm and household employment data. 

Nonfarm employment, reported through the Current Employment Statistics (CES) program called the establishment report, tracks payroll jobs in nonfarm establishments, excluding agricultural workers, the self-employed, and private household employees. This measure is a key indicator of jobs in major industries. This BLS survey excludes agriculture and farm jobs because they are difficult to measure due to high volatility and lack of reporting. 

On the other hand, household employment data collected via the Current Population Survey (CPS), called the household survey, includes jobs for the self-employed and those in private households but not separated by industry. This latter data set captures shifts in labor force participation and underemployment, often offering a more comprehensive view of economic health.

Historical Employment Trends in Kansas

Kansas’s employment trends provide insights into the state’s economic trajectory. Since the 1990s, Kansas has experienced periods of moderate job growth punctuated by significant downturns, such as the early 2000s recession and the Great Recession of 2007-2009. 

For example, nonfarm employment grew from 1.08 million in 1990 to 1.12 million by the mid-1990s, reflecting the state’s overall economic growth. However, the early 2000s saw a dip in employment due to the dot-com bubble burst, with a more substantial decline during the Great Recession. Post-recession recovery was slow but steady, with household and nonfarm employment regaining much of their lost ground by 2015. 

By 2019, Kansas had reached new employment highs. However, the COVID-19 pandemic disrupted these gains, causing sharp declines in employment across the state. Although there has been a recovery since then, the 2024 employment trends show a divergence that mirrors broader national patterns.

Nonfarm vs. Household Employment: A Comparative Analysis

Since the COVID-19 lockdowns, U.S. employment trends have shown a divergence between household and nonfarm jobs. Initially, household employment rebounded more swiftly as individuals turned to self-employment and gig work to navigate the economic uncertainty. However, nonfarm employment took longer to recover as traditional businesses faced prolonged disruptions and slow rehiring processes. Over the last year, household employment has slowed and remained flat, while nonfarm jobs increased by 2.5 million nationwide. 

These trends were similar in Kansas, where household employment bounced back faster than nonfarm jobs in the immediate aftermath of the lockdowns. Since July 2019, household employment has increased by 3,100 jobs, while nonfarm employment has increased by 40,800. Like the national trend, household employment has lost 13,146 jobs over the last year, while nonfarm jobs are up by 21,100. 

Household employment has declined in 12 of the last 14 months, with a decline of 14,475 jobs to the lowest level of 1.460 million since January 2022, but nonfarm employment has increased in 10 of those 14 months, increasing by 21,400 jobs to 1.462 million.

In July 2024, Kansas lost 1,700 nonfarm jobs, a slight decline of 0.1%. However, over the past year, the state added 21,100 nonfarm jobs, marking a 1.5% increase, primarily driven by gains in the leisure, hospitality, and professional services sectors. In contrast, household employment declined by 1,200 in July, raising concerns about broader economic well-being. 

At the national level, the U.S. added only 114,000 jobs in July 2024, far below expectations and reflective of a broader slowdown in the labor market. This weak performance suggests that Kansas’s challenges are part of a larger national trend.

Unemployment Rates: Kansas and Neighboring States

As of July 2024, Kansas’s unemployment rate is 3.2%, ranking 17th nationally, with the U.S. rate at 4.3%. The state’s unemployment rate reflects a relatively stable labor market, but the losses in household employment that go into the unemployment rate calculations highlight the need for Kansas to remain vigilant in its economic policies to ensure continued competitiveness. 

The differences in unemployment rates are notable when comparing Kansas to its neighboring states. For instance, Nebraska boasts one of the lowest unemployment rates in the country at 2.6%, ranking 5th nationally, while Missouri’s unemployment rate is slightly higher at 3.8%, ranking 30th. Iowa is in a better position than Kansas with an unemployment rate of 2.8%, ranking 8th. 

These comparisons emphasize that while Kansas performs reasonably well, there is room for improvement, particularly in creating a more dynamic and resilient labor market.

Improving Economic Vitality and Competitiveness

Kansas must prioritize economic freedom and fiscal discipline to enhance its economic competitiveness. Reducing government spending, revamping the tax system, and promoting regulatory reform are essential. By adopting strict spending limits tied to inflation and population growth, Kansas can create a more predictable fiscal environment and attract businesses. Streamlining regulations will encourage entrepreneurial activity and job creation, especially for small businesses and startups.

Kansas’s current economic challenges are not new. The state has faced long-term economic stagnation, with private sector job growth lagging behind national trends since the 1980s. 

Addressing these issues requires a concerted effort to reduce government spending and improve the business climate. Embracing reforms that promote economic freedom and pro-growth policies is crucial for ensuring long-term prosperity for all Kansans.

Originally published at KTRH News Houston.

​Rural towns and cities across the U.S. are still dealing with years-long workforce issues.

The younger labor force is more likely to seek work elsewhere in more urban or suburban places over areas with aging workers. There's been a noticeable hit to some blue-collar jobs that have made people consider where they live and work.

Dr. Vance Ginn, President of Ginn Economic Consulting, said a lot of rural communities have been trying to recollect themselves ever since the covid years.

"The number of workers who have decided to move to other places along with the higher cost of living has made it more difficult for people to live in a lot of these communities," said Ginn.

Because of that, people have been moving to places that are cheaper and still offer just as good quality of living. This has left rural areas stuck looking for workers to fill open positions.

"There's not as many workers available to fill the jobs that are needed," Ginn said. "What we're seeing is some pretty big hardship."

Ginn suggests in order to attract people back to their community or city or to get more people to move closer to them, these rural areas need to reevaluate what their property taxes and restrictions look like.

"That way the affordability crisis or how much they can afford to live in those communities will go down and that will help with a lot of the shortages that we're seeing in the workforce," Ginn added.

Texas seems to be doing better than some of the other larger populated states like New York and California who have higher taxes and more regulations. There have been a lot of people move to states like Florida and Tennessee too, states that don't have personal income tax.

​Did you know...

📈 Inflation remains high at 3.3% y/y, and the Fed's slow response is not helping. 

📊 The latest jobs report shows a shift to part-time work and declining labor force participation, with real wages declining.

🏡 The Texas GOP's priorities miss key issues like spending restraint and property tax elimination, which are crucial for economic growth.

Listen, like, share, and subscribe. Check out my newsletter for show notes and more at www.vanceginn.substack.com.

Originally published at Inside Sources. ​

The final jobs report for 2023 was recently reported. The headlines look good but don’t tell the full story. This has been a common theme with many economic indicators, from the labor market to economic output.

With this being an election year, politicians are trying to milk every apparent “win” or “loss” for voter approval. With all the noise, we need an honest assessment of the economic ups and downs to help guide voters in November.

First, the payroll survey shows that were 216,000 net non-farm jobs added in December, which historically is rather robust. However, that’s not even half the story.

To examine how many productive private-sector jobs were added in December, we need to make some corrections. This includes subtracting 52,000 unproductive government jobs added in December as they are a burden on private-sector workers. Also, we need to subtract the 71,000 jobs that were revised down for October and November.

Doing so leaves just 95,000 productive non-farm jobs added in December, which is historically weak.

Couple these findings with even weaker results from the household survey showing 683,000 fewer people were employed compared with November 2023, and this report is even weaker.

While the unemployment rate was unchanged from the previous report at 3.7 percent, the labor force dropped by nearly 700,000 last month, meaning fewer people had work or were looking for work. The labor force participation rate dropped to 62.5 percent, the lowest since February 2023.

Contributing factors to the declining labor force participation are myriad and complex, not always correlated to the economy. But they are typically connected with expanded roles of government and other factors.

For example, the Economic Policy Innovation Center recently released a report highlighting how millions of people have dropped out of the labor force. The author notes “if the employment-to-population ratio were the same today as it was before the COVID-19 pandemic in February 2020, 2.6 million more people would be employed today.”

The report finds that the largest share of people leaving have been retirees since the pandemic. The next largest group is 20 to 24 years old, who have been living off the handouts since the pandemic or with their parents.

Interestingly, even with skyrocketing daycare costs, those without kids are a large share of those leaving the workforce. This makes some sense as maybe they are young and don’t have kids and have other means to survive, but this also is a conundrum because they’re reducing their long-term earnings potential.

But with recent minimum wage hikes by 22 states that no doubt will displace many low-skilled workers and the rise in dependency on government safety nets over the last few years, there’s likely to be more people out of the labor force for longer.

Speaking of distortion, average weekly earnings have been improving, but after adjusting for inflation, they are up just 0.4 percent over the last year.

While it’s promising to see real wages go up after years when it wasn’t, workers would feel much more relief if inflation were further slowed. But mischief in Congress and the Federal Reserve keeps that from happening.

Inflation soared due to the federal government’s deficit spending, mostly monetized by the Federal Reserve. This created a situation of too much money chasing too few goods that resulted in persistent inflation. As purchasing power remains a problem for many Americans, workers become disenchanted with jobs, especially when the monetary benefit of government handouts exceeds wages.

Reducing government spending is imperative. Doing so will help the Fed tame inflation, reignite labor force participation, and spur job creation.

Celebrating wins is important, especially during the recovery after the Donald Trump lockdowns, but our leaders must not turn a blind eye to underlying problems. As we await jobs reports, we must consider the underlying issues that affect Americans directly rather than just the headlines.

What we uncover might shape whether our elected leader champions free-market flourishing or leans toward the big-government ideologies our forefathers warned against.