New estimates show that Kentucky has added on average 1,500 net new jobs a month for the last six months and 1,525 a month for the last year. So far, the recovery is only very slowly shrinking the state’s jobs deficit, the gap between the jobs we have and the jobs we need to replace those lost in the recession and catch up with growth in the population.
At the worst point in the recession, Kentucky had lost an estimated 118,300 jobs. We have since gained back 85,700 of those jobs for a net loss of 32,600. However, we’ve needed 54,900 additional jobs over that time to keep up with population growth, for a total current jobs deficit of 87,500.
If job growth could accelerate to 2,500 jobs a month, it would still take about three years—until January 2016—to get back to the pre-recession unemployment rate. At 1,500 jobs a month, it would take much longer.
The state’s job story could be made worse by the impact on the economy of new sequestration-related budget cuts and the elimination of the temporary payroll tax cut at the end of last year. All the more reason the federal budget should include short-term public investment to spur faster job growth and avoid dangerous cuts that will slow the recovery.
Source: Economic Policy Institute analysis of Bureau of Labor Statistics Current Employment Statistics data.