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Report: Kentucky's Economy Not as Rosy as Suggested


Tuesday, December 11, 2018   

FRANKFORT, Ky. — A new report challenges assertions from Kentucky policymakers that corporate investments are spurring an economic revival.

In its new analysis, The Kentucky Center for Economic Policy said the Cabinet for Economic Development's announcements of potential private business investment are not a reliable barometer of how the state's economy is faring. Executive Director of the think tank, Jason Bailey, said they took a close look at the $9.2 billion in investments announced in 2017.

"We find that about a third of those contain no new jobs,” Bailey said. “Nearly half of them will contain no new jobs if the Braidy Industries project in Northeastern Kentucky doesn't actually materialize, and there are significant questions about whether it will."

Bailey said more than 80 percent of those announcements were from companies already operating in the state, before the state's so-called right-to-work law went into effect. He said that brings into question whether those investments were the result of policy changes.

Gov. Matt Bevin's office dismissed the report in a statement, and said the state has "achieved the highest workforce participation ever and record-low unemployment."

Bailey said the state's investment projections also are not completely accurate because in 2016, the Cabinet stopped releasing a companion report on facilities that close down and eliminate jobs. While he agrees the economy is in recovery, Bailey said it's lopsided.

"We've seen job growth in the Golden Triangle, in Lexington, Louisville, Bowling Green and places like that. Much of rural Kentucky really hasn't seen job growth,” he said. “There's still not enough jobs to where we are back to where we were when the economy was strong, in about the year 2000."

The right-to-work law limits the power of unions to collect dues, and has been touted by Bevin and top Republicans as a factor in corporate investments coming into the Commonwealth. But Bailey argued lower labor standards and expanded tax breaks will not result in strong job creation.

"The most important thing the state can do is really reinvest in things like education, infrastructure that we've let erode over the past decade,” he said. “And that will create the conditions in which we will have small business startups and existing business expansion."

The research found that the state added only 700 jobs per month in the 21 months since right-to-work, in contrast to the 2,100 new jobs a month in the 21 months before it passed.

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