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May 25, 2024

Kentucky annual unemployment rate sees big drop in 2021

Kentucky’s annual unemployment rate dipped to 4.7% in 2021, dropping 1.7 percentage points from the prior year, according to a release Monday from the Kentucky Center for Statistics.

The state reported a 26.7% reduction in the number of unemployed residents. At 95,205 last year, that represented a drop of more than 34,500 people seeking benefits last year.

Areas that suffered significant job losses due to the COVID-19 pandemic two years ago were sectors that saw some of the biggest gains last year. For example, the state’s leisure and hospitality sector reported 16,300 new jobs last year. Nearly 14,000 of those positions were in accommodations and food services, with the remainder in entertainment and recreation.

“The pandemic hit Kentucky’s leisure and hospitality sector hard in 2020,” said Mike Clark, director for the University of Kentucky’s Center for Business and Economic Research, in a statement. “While employment in this sector is still below pre-pandemic levels, it has improved considerably during 2021 as consumers returned to restaurants and entertainment venues.”

The state’s unemployment rate was nearly in the middle among all states, as 25 states reported a lower annual rate last year. Regionally, Kentucky’s rate was better than Illinois, Ohio and West Virginia’s. Indiana, Missouri, Tennessee and Virginia all reported lower annual unemployment rates.

Based on a federal survey of non-agricultural businesses, the state’s non-farm jobs totals grew by more than 59,000 last year to nearly 1.9 million.

Other sectors that reported job growth include the state’s trade and transportation utilities sector, which grew by more than 15,000 new positions. Professional services added 11,500. Education and health services and manufacturing each grew by about 7,000 each.

During a press briefing with reporters on Monday afternoon, Gov. Andy Beshear said that the job news is the latest signal that Kentucky’s economy is “on fire.” He added that all parts of the state are benefitting and seeing new investments.

“It’s very exciting,” he said. “It shows how this is happening all over and how prosperity can reach all parts of Kentucky.”

While the jobs report showed a lot of good news for Beshear, the Democratic leader who has touted the state’s economic recovery, it also gives some fuel to Republican lawmakers, who have raised concerns about Kentucky’s competitiveness among other states and the state’s low job-participation rate. On the latter, a September 2021 report issued by the Kentucky Chamber of Commerce found the state had the third-lowest workforce participation rate among the 50 states.

The workforce participation rate covers individuals age 16 and older who are either employed or receiving unemployment and seeking work. It excludes active-duty military personnel and individuals who are either incarcerated or institutionalized.

Slightly more than 2 million Kentuckians are considered employed or seeking work. According to the chamber’s study, the 56.3% rate from June 2021 is down from 63.5% in January 2020.

In Monday’s report, the Center for Statistics – an agency in the state’s Cabinet for Education and Workforce Development – reported Kentucky’s civilian labor force increased last year by 20,140 workers, a 1% gain. However, that 2 million figure is still down more than 24,500 workers from 10 years ago.

GOP lawmakers in the current session of the General Assembly are looking at a couple of bills to bolster the state’s participation rate. One is a tax reform bill that reduces the personal income tax rate. Another is a bill that would make sweeping changes to the state’s unemployment program.

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