KY Policy Blog

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

What Would Kentucky Gain from More Business Tax Cuts?

By Jason Bailey
October 10, 2012

For a state like Kentucky—with high levels of poverty, low wages and too few jobs—a perpetual issue is how government can do more to promote prosperity. For years, the state has focused heavily on reducing business taxes and providing special tax incentives with the hope of attracting industry.

In truth, business tax cuts are not a formula for long-term economic development. Yet a focus on that strategy continues in the recently-released consultants’ report to Governor Beshear’s Blue Ribbon Tax Reform Commission.

The report argues that Kentucky needs to improve its read more

The Bigger Picture on Who Pays Taxes

By Jason Bailey
October 8, 2012

The vast majority of Kentuckians (and Americans) who don’t owe federal income taxes are either workers who pay payroll taxes, seniors, people with disabilities or students.

In 2009-2010, 49 percent of Kentuckians owed no federal income taxes. 76 percent were either workers who paid federal payroll taxes (57 percent) or the elderly (19 percent)—many of whom paid federal income taxes before they retired. These groups didn’t owe federal income taxes because their wages were too low; because they qualified for measures like the Earned Income Tax Credit, which helps lift read more