KY Policy Blog

State Can’t Pay Pension Debt from Natural Revenue Growth without Harming Services

By Jason Bailey
January 3, 2013

One area of consensus on pensions is that the state should begin making the full annual required contribution to the retirement system, which will reduce the long-run costs of paying back the system’s liability. Recently, a couple of Senate leaders have suggested that Kentucky can make that payment starting in 2015 using the natural revenue growth generated by a recovering economy—in other words without raising additional revenue through taxes.

But that approach is unrealistic. There just won’t be enough money to make the payment while also doing justice to Kentucky’s read more

The State of Working Kentucky 2012: Jobs by Industry

By Jason Bailey
December 21, 2012

Kentucky’s economy continues to change, with a decline in manufacturing jobs and a shift toward more jobs in the service sector—a trend that has accelerated with the weak economy of the last few years. These changes have big implications for the job quality of Kentucky workers.

Kentucky experienced growth in manufacturing jobs throughout the 1990s, reaching a peak of 310,000 jobs in the year 2000. For about the last ten years, however, manufacturing jobs have plummeted with Kentucky losing nearly one-third of its factory employment over that period. Job loss read more

The State of Working Kentucky 2012: Race

By Ashley Spalding
December 20, 2012

The weak economy of the last few years has had far-reaching effects, but some groups have been harder hit than others. In particular, African Americans in Kentucky have suffered enormous job losses and continue to face a daunting labor market.

Over the last decade, unemployment for white Kentuckians remained consistently just below the state unemployment rate, while unemployment for African Americans was substantially higher—particularly toward the end of the decade. For whites, unemployment grew from 4.9 percent in 2001 to 10.1 percent in 2009, before dropping to 8.9 percent in read more

The State of Working Kentucky 2012: Education

By Ashley Spalding
December 19, 2012

There is no question that greater levels of education are associated with higher wages and employment rates in Kentucky, and employment has been declining among those with less than a college degree in recent years. However, median wages have been stagnant for Kentuckians at all education levels over the last ten years—suggesting that our problems with job quality are more complex than just a skills gap.

Kentucky has seen wage stagnation across the board, but for those with some college or a high school degree, the trend is not new. read more

The State of Working Kentucky 2012: Wages

By Jason Bailey
December 18, 2012

Working Kentuckians have experienced a lost decade in terms of wage growth, a trend that is undermining family economic security across the Commonwealth and will likely persist at least as long as the unemployment rate remains high.

During the last few years of the 1990s and the beginning of the last decade, median wages in both Kentucky and the U. S. climbed considerably. That happened because the nation had practically reached full employment, which by limiting the supply of available workers gave them the ability to obtain somewhat higher wages. read more

Penny Increase in Sales Tax Would Worsen Tax Fairness and Fail to Fix Long-Term Revenue Problem

By Jason Bailey
December 17, 2012

A couple of legislators have floated the idea of raising the sales tax by one percentage point rather than taking action on a tax reform package. But such a plan would make Kentucky’s tax system less equitable while doing nothing to address the fundamental challenge of long-term revenue growth.

Increasing the sales tax would be a very regressive approach, meaning that it would impact low- and middle-income Kentuckians more than those with higher incomes. Research by the Institute on Taxation and Economic Policy (ITEP) shows that the poorest 20 percent read more

The State of Working Kentucky 2012: Youth

By Sean Litteral
December 13, 2012

In times of recession and high unemployment, it’s particularly hard for young people to find jobs. Competition for the jobs that do exist becomes more intense, making it harder for less-experienced workers to obtain employment.

That can be seen in the unemployment rate for Kentucky youth under age 24, which stood at 19.9 percent in 2011 compared to 9.5 percent for the entire Kentucky workforce. Young adults have experienced the brunt of the economic downturn and their climb from the trough of the recession has been slow.

The youth unemployment read more

Tax Commission Recommendations Raise Needed Revenue but Include Big Corporate Tax Cut

By Jason Bailey
December 11, 2012

The new plan from the Governor’s Blue Ribbon Tax Reform Commission rightly puts the first priority on raising needed revenue to address Kentucky’s budget challenges. The commission finalized a package that raises approximately $659 million in the first year and closes various holes in the tax code that are limiting the pace of state revenue growth.

The most important changes involve strengthening the individual income tax. After much debate, the commission made the right decision in choosing to maintain a graduated income tax after pressure from some commissioners to move read more

Kentucky Job Growth Remains Slow and Jobs Deficit Substantial

By Jason Bailey
November 20, 2012

Between the start of the recession and February 2010, Kentucky lost 118,200 jobs. After several years of job growth, that gap has been trimmed to 35,100. However, ongoing growth in the working age population over those years means that the state’s actual jobs deficit has only partially declined. The gap between Kentucky jobs and the number of jobs the state needs to regain its pre-recession unemployment rate stands at 98,300 at the end of October.

Clearly, the pace of job growth is still too slow. Kentucky needs to add about read more

The State of Working Kentucky: Gender

By Jason Bailey
November 13, 2012

As in the U.S. as a whole, women’s participation in the paid workforce in Kentucky has grown over the last thirty years. Also, the gap in wages between Kentucky men and women, while still large, has been shrinking. However, that gap has narrowed in part because men’s wages have weakened, and male participation in the Kentucky workforce has also been declining.

The gap in median wages between men and women has shrunk substantially in Kentucky over the last 30 years (see below). Whereas in 1981 the median female wage in read more