Labor Market Conditions Prepared for Kansas State Workforce Board April 30, 2014 Labor Market Information Services Kansas Department of Labor Tyler Tenbrink Senior Labor Economist 785-296-5000 Ext. 2593 Tyler.Tenbrink@dol.ks.gov

Demand for Labor Statewide

The number of private sector jobs in the state grew at an average rate of 1,500 jobs per month from February 2010 to November 2013. Since November 2013, job growth has slowed (see red line). The state has lost 800 jobs since November. Over the year job gains have slowed from 23,500 jobs over the year in November 2013 to 15,200 jobs over the year in March. This information comes from the establishment survey which counts both full and part-time jobs as a job.

Average Weekly Hours worked in the private sector are often a leading indicator of employment. Employers adjust workers schedules in the short-term to align with changes in demand for their products and services. If changes in demand persist, employers may make staffing changes (adding workers or laying off workers). The number of average weekly hours peaked in December 2012 at 34.9. Since that time average weekly hours has declined to 34.6 hours. Source: Kansas Department of Labor, Labor Market Information Services, in conjunction with the Bureau of Labor Statistics

Typically, an increase in real average hourly wages in the state indicates employers are demanding an increased quantity of labor and are willing to pay more per hour to get it. Another explanation is the supply of labor is not sufficient to meet demand. However, in this case at least as far back to December 2012, hourly wages have increased and weekly wages have not. This suggests employers are offering more pay per hour but reducing hours or hiring more part-time workers in relation to full time workers. (CES wages include monetary compensation only, not total compensation costs.)

Several industries are seeing increased demand for their goods and services and employers are responding by adding employment and increasing hours. Industries showing the most strength are Construction and Education and Health Services (this is private education only). Several industries are seeing increased demand for their goods and services. Employers are responding by adding employment and increasing hours. Industries showing the most strength are Construction and Education and Health Services (this is private education only). Professional and Business Services is showing strong growth in Hours and Jobs, however, wages are not growing (-0.2%) OTY. This may be due to a structural change happening in Professional and Business services. This industry includes temporary employment services. Many of the temporary jobs are lower wage occupations than other occupations traditionally included in Professional and Business Services. This may be one factor pulling wages down. Manufacturing and Trade, Transportation, and Utilities are both showing weakness in two of the three indicators. Manufacturing is one industry where hourly earnings are increasing but hours and decreasing. It is not really a case of employers trading full time workers for part-time workers because the number of jobs is declining. Employers may be choosing more machines and less workers to produce their products.

Manufacturing is having trouble recovering jobs from the recession Manufacturing is having trouble recovering jobs from the recession. Employment hit a low of 159,200 jobs back in March 2010, March of 2014 employment has only increased to 161,400. That is only a gain of 2,200 jobs in four years time. Average weekly hours had been increasing in trend until January of this year when we saw a sharp decrease in both hours and employment. The down turn in hours may be temporary, the series does show quite a lot of volatility.

The outlook in the construction industry looks positive The outlook in the construction industry looks positive. Jobs, Hours, and Wages are increasing over the year. The increasing trend in building permits has flattened. There were 321 building permits in February down from 804 in January. March data will not be released until April 24th

Labor Force and Unemployment Labor Supply Labor Force and Unemployment

The seasonally adjusted statewide unemployment rate has come down to 4 The seasonally adjusted statewide unemployment rate has come down to 4.9%. Nearly all of the western half of the state has returned to pre recession levels. Some pockets of higher unemployment still persist. The area around and north of Kansas City, Wyandotte, Leavenworth, Atchison, and Jefferson counties range from 6.1% to 7.4. Labette county in southeast Kansas is 7.4% and Linn county along the Missouri boarder is still at 7.0 percent.

This cart shows those groups of people who are not counted in the unemployment rate. In 2013, the CPS program estimates Kansas had on average 4,900 discouraged workers. When surveyed these people specifically indicated they believe there are no jobs available at this time for them. This is a very small percentage of the labor force. The discouraged workers are included in the group of marginally attached workers. These workers want a job, are available to work, searched for work in the past 12 months but have not searched in the 4 weeks preceding the survey. There were and estimated 19, 400 marginally attached workers in the state in 2013. The largest group is workers working part-time for economic reasons. CPS estimates this group to be 64,100. The bulk of these (46,200) usually work part-time and are currently working more part-time due to economic reasons. The remaining 17,900 usually work full-time, but are currently working part-time for economic reasons. .

Labor Force Composition How does Kansas stack up against the US

This chart shows the number of people in the labor force compared to the number of jobs. In 2013 The number of jobs in Kansas was 98% of the number of employed people. The number of jobs in the US was 95% of the number of employed in the labor force. This shows the labor market is tighter in Kansas than in the US. There are less workers available compared to the number of jobs in the state. Keep in mind Jobs are counted at place of work, the labor force is counted at household, so people living in KC KS and working in KC MO will be counted as part of the labor force but their job will not be counted. Also, people working multiple jobs will be counted as more than one job but only one in the labor force. Source: Kansas Department of Labor, Labor Market Information Services, in conjunction with the Bureau of Labor Statistics

Unemployed 65,100 Unemployed 107,700 Unemployed 107,700 Unemployed 80,400 Unemployed 80,400 Most of the increase in unemployment during the recession was the result of people previously not looking for work starting to look for work in 2009. It is not due to people losing their jobs. By 2013 many of the people who entered the labor force in 2009 have now left the labor force or stopped looking for work. Unemployed 107,691 Unemployed 80,444 Source: Kansas Department of Labor, Labor Market Information Services, in conjunction with the Bureau of Labor Statistics

The bulk of the unemployed in Kansas has been unemployed less than 5 weeks (33.5%), much of this can be described as frictional unemployment. In the US, only 16.9% of the unemployed were unemployed 5 weeks or less. Kansas is much better off than the nation in terms of long-term unemployed. In 2013, 37.6% of the unemployed were unemployed longer than 27 weeks. In Kansas, only 27.9% of unemployed were long-term unemployed. Source: Kansas Department of Labor, Labor Market Information Services, in conjunction with the Bureau of Labor Statistics

Source: Kansas Department of Labor, Labor Market Information Services in conjunction with the Bureau of Labor Statistics.

Working Part-time for Economic reasons Source: Kansas Department of Labor, Labor Market Information Services in conjunction with the Bureau of Labor Statistics.

Source: Kansas Department of Labor, Labor Market Information Services in conjunction with the Bureau of Labor Statistics.

Questions

Senior Labor Economist Tyler Tenbrink Senior Labor Economist Labor Market Information Services (LMIS) 401 SW Topeka Blvd, Topeka Kansas 66603 (785) 296-5000 ext. 2593