When Republican Rep. Russell Webber (R-Shepherdsville) talked about House Bill 4 on the House floor last month, he cited workforce participation rates released from the Kentucky Chamber as a reason for the need to cut unemployment benefits and get Kentuckians back to work.
“Right now, 47 percent of the working-age population in Kentucky is not working, so we have 53 percent of our working-age population that is actively working,” Russell said.
Rep. Josh Bray (R-Mount Vernon) also argued that the bill, which would slash unemployment benefits for Kentuckians, would help drive up the workforce participation rate in Kentucky.
“If you want to bring jobs to Eastern Kentucky, we have to improve our workforce participation rate,” Bray said.
In the report released from the Chamber, the workforce participation rate had steadily declined since 2000, when the participation rate was at 63.5 percent.
“Kentucky’s workforce participation rate has steadily declined since 2000 and plummeted during the pandemic,” the report says. “This means that, over time, a growing percentage of Kentucky’s adult population has not been working or actively looking for work.”
“The labor force participation rate is a very commonly used economic metric to gauge the overall health and quality of a labor force and a labor market,” said Charles Aull, senior policy analyst for the Kentucky Chamber of Commerce. “It does include all adults aged 16 or older with a few different exceptions.”
But, the Kentucky Center for Economic Policy believes those numbers are misleading, and it’s leading to legislation that’s cutting vital services to Kentuckians, such as unemployment and food assistance.
“Anyone using the lower number is painting a grossly misleading picture of what is going on,” said Jason Bailey, the executive director of the KCEP. “Some corporate lobbyists have an agenda in mind: to promote massive cuts to unemployment insurance, food assistance, and other benefits that have been so vital to Kentuckians in this crisis. It is important we have a conversation based on facts and not intentionally skewed numbers.”
“I don’t think there’s anything misleading about the report that we produced in that regard,” Aull said.
The KCEP alleges that the Chamber is using data for adults over the age of 16 and many older adults. Bailey said the actual number of prime working-age adults, ages 25-54, is at 80 percent.
“The much lower number the Chamber uses is the share of all adults ages 16 and over who are in the workforce,” Bailey said. “ Since it is all adults, the latter number includes sophomores in high school all the way to great grandmothers, and in that way is a misleading statistic since many of those people should not be expected to be working.”
An analysis released by the KCEP shows that Kentucky has one of the strongest job rebounds ever after the significant job losses during the pandemic.
“About half of the just 20 percent of prime-age Kentuckians not in the labor force are caregivers, and most all of the rest are sick or disabled or are attending school,” Bailey said. “The fact is Kentuckians are going back to work from the COVID recession in record numbers, not sitting on the sidelines, as we describe in this analysis. The employers having difficulty attracting applicants are those who insist on offering low wages with few benefits and little workplace flexibility.”
Aull said the Kentucky Chamber does look at the prime age numbers, but that doesn’t paint the whole picture, as those between the ages of 55-64 do contribute to the overall economy.
“So, I think their insistence on dismissing the significance of that age group is a bit concerning,” Aull said.
He elaborated that it’s also important to look at Kentucky compared to the rest of the nation, and looking at the prime age workforce by itself is not the best way to do it. You want to use the prime-age workforce and compare it to the rest of the country, and historically, Kentucky ends up with the same narrative of the workforce participation rate as a whole.
“Kentucky tends to have a smaller share of its working population participating in the workforce than comparison to the nation as a whole and competitor states, and the data bears that out,” Aull said.
