KY Policy Blog

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

The State of Working Kentucky 2012: Employment

By Ashley Spalding
November 2, 2012

The recession had devastating effects on employment in Kentucky, and the recovery is only gradually lifting the state out of a deep hole. The economy’s collapse drove up the state’s unemployment rate, forced higher levels of part-time work from those who would prefer full-time jobs and led to historically high rates of long-term unemployment.

The length of time that some workers are going without finding work provides an indication of the long-lasting consequences of the recession. Kentucky’s long-term unemployment rate (the share of the unemployed who have been out of read more

Pension Recommendations Emphasize Employee Sacrifice While Addressing Only Portion of Liability

By Jason Bailey
November 1, 2012

The state’s task force on public pensions heard consultants’ recommendations this week that include several ways to raise employee costs and cut benefits, some of which may not be legal. Yet even if all of the recommendations were to become law they would only reduce a small portion of Kentucky’s unfunded pension liability.

This limited impact and emphasis on employee sacrifice are the results of an approach that includes just one revenue measure (taxing retirement benefits) rather than the kind of broad, long-term revenue plan that is needed to truly read more

Kentucky Falls Short in Closing Higher Education Gaps

By Sean Litteral
October 31, 2012

Kentucky still has a long way to go to meet the ambitious educational attainment goals set by the Postsecondary Education Improvement Act of 1997. In a recent report by the Council on Postsecondary Education, which details the state’s progress toward meeting these goals in 2010-2011, Kentucky fell short in several indicators of the gaps between disadvantaged and other students.

The report examines the progress that has been made toward the state’s education goals for 2020 in 31 performance targets in four priority areas: college readiness; student success; research, economic and read more

Arguments to Cut Income Tax Miss Context and Ignore Tax’s Benefits

By Jason Bailey
October 17, 2012

Those arguing for a shift toward sales taxes and away from income taxes in Kentucky overstate the influence of income taxes on where people live. And they overlook the benefits of income taxes, including how they improve tax fairness and drive long-term revenue growth.

One argument, which comes up in the consultants’ report to the governor’s tax reform commission, concerns location decisions along Kentucky’s border regions. Since close to half of the Kentucky population lives close to a state border, there are more opportunities for individuals to choose which state read more