But because the labor force is shrinking
Have those days ended? According to the Kentucky Education and Workforce Development Cabinet, Kentucky’s unemployment rate stood at 5.3 percent at the end of October, which is slightly better than the national rate of 5.5 percent.
Yet while the unemployment rate has dropped, the number of jobless Kentuckians has continued to increase. How is that possible? It is the way the unemployment rate is calculated. If you can become so frustrated in your unsuccessful search for a job that you have ceased looking, the jobless statistics no longer consider you “unemployed.”
Jason Bailey, director of the Kentucky Center for Economic Policy, calls those no longer actively seeking jobs “missing workers.” The improvement in the state’s jobless rate is “not just because people are getting jobs but because the labor force is shrinking,” Bailey explained. “A significant factor is people are dropping out because they have become discouraged from finding work or young people never entering the labor market because of the lack of job opportunities.”
While the October rate represented a 0.5 percent drop from the previous month and indicated 4,305 more had found work, there were actually 5,493 fewer people participating in the workplace than the month before. New jobs aren’t always as good as the old ones.
A KCEP analysis indicates Kentucky lost 20 percent of its manufacturing jobs (48,800) from December 2007 to February 2010. Four years later, the state has regained 27,600 of them. Do the math: Kentucky now has more than 21,000 fewer manufacturing jobs than it did seven years ago, and those are the jobs that tend to pay good wages with benefits.
Or at least they used to. Bailey says the replacement manufacturing jobs often don’t pay the same wages or benefits as the old ones or that many associate with manufacturing jobs. Some manufacturers are introducing two-tiered salary structures, paying new employees less than those who’ve been on the job for years.