Kentucky lost 15.5% of its jobs in April due to the COVID-19 pandemic with industries like hotels, restaurants and manufacturing especially hard hit. Because urban areas tend to have more jobs in these sectors, they also had a higher rate of job loss than rural parts of the state. Continued and significantly expanded federal fiscal relief will be needed to address sinking state and local revenues, ensure individuals out of work can get by, prevent further job loss and shorten the recession.
COVID-19 job losses felt across all industries
Every industry laid off workers in April as consumer spending fell and healthy-at-home orders necessary to reduce the spread of infection required businesses to temporarily close. Although the decrease in total nonfarm employment in Kentucky was 15.5%, it ranged from 53.2% in Arts, Entertainment and Recreation to 0.6% for Federal Government employment (the least hard-hit private industry was Finance and Insurance at 1.8%).
Hover on the graph below to see state industry specifics.
By far, Accommodations and Food Services were the hardest hit in terms of the total number of layoffs (69,700) with public health orders limiting restaurants to carry-out and drive through only, and as healthy-at-home orders reduced hotel stays. The next biggest job losses were in Durable Goods Manufacturing (48,500) and Health Care & Social Assistance (32,300), which includes child care services. Combined, Kentucky lost 289,600 jobs in one month, which far surpasses the worst month of the Great Recession, when in January 2009, Kentucky lost 19,700 jobs.
Federal, state and local governments did not lay off employees to the same degree that most private sector industries did in April, with an average employment decrease of 5.4% across government. However, state and local governments are seeing cratering revenues, and face unprecedented shortfalls that will lead to significant layoffs and critical service reductions soon without substantial federal aid. State and local government employment makes up 1 out of every 7 Kentucky jobs.
Every county in Kentucky lost jobs, urban areas hit hardest
County-level employment declines between February and April ranged from a 5.1% drop in Wolfe County to an estimated 29.6% in Marion County. Regionally, the areas hardest hit were counties in the “Golden Triangle” bounded by Louisville, Lexington and Northern Kentucky, and the counties surrounding Bowling Green. In fact, counties in metro areas saw a job loss of 14.2% compared to counties in non-metro areas, which had a job loss of 10.6%.
Urban areas of the state tend to have more jobs in sectors like Accommodations and Food Services, Durable Goods Manufacturing, and Arts and Entertainment. Those were the same industries hardest hit since February.
More federal fiscal relief is critical to preserve jobs and speed eventual recovery
The depth of job loss during the past two months has been historic. Given the tenuousness of Kentucky’s “re-opening” amidst the ongoing pandemic and the magnitude of damage already done, without significant aid, individuals and families in Kentucky will face serious financial hardship for the foreseeable future. And given the projected magnitude of Kentucky’s revenue shortfalls and significant increase in costs related to the crisis, the limited and targeted federal assistance provided thus far is inadequate.
Assistance like what is proposed in the HEROES Act would go a long way toward addressing unmet needs. Key necessary measures to support individuals include more stimulus payments, an extension of enhanced unemployment benefits, a boost in food and housing assistance and supplemental pay for front line workers. Also essential is much more fiscal relief for state and local governments. Without action, states and localities will face increasing pressure to cut public services, resulting in more layoffs that will ripple through the rest of the economy.
Congress needs to act quickly to prevent more job losses, protect people who have already lost employment, and shorten this economic catastrophe as much as possible.