Employment in Franklin County lower than jobless rate may indicate

1 December 2020 - Austin Horn (The State Journal)

Franklin County’s unemployment rate in 2020 tells a volatile story. 

Two months after a February low of 3.6% unemployment, the county’s rate shot up dramatically to 15.1% in response to the onset of the COVID-19 pandemic. 

By September, the state’s latest figure for Franklin County had the estimated unemployment rate sliding back to 5.5% — a nearly pre-pandemic figure. 

But economist and Director of the Center for Business and Economic Research at the University of Kentucky Dr. Michael Clark warns that the unemployment rate number doesn’t tell the whole story. Clark pointed to numbers that showed how employment across the state, and in Franklin County, hasn’t bounced back as strongly as the unemployment rate might suggest.

People who are classified as unemployed don't have a job but have searched for work during the four weeks leading up to their classification as unemployed. So while that number has leveled off, total employment numbers suggest that several people lost jobs and haven't been actively searching to re-enter the workforce.

For example, in February, 24,735 Franklin County residents were employed. That number fell by around 2,500 to 22,234 in April, according to the U.S. Bureau of Labor & Statistics.

Five months later, in September, that number had risen by just over 100, with preliminary data suggesting around 22,349 Franklin County residents were then employed.

That leaves well over 2,000 Franklin Countians who were employed in February but didn't have gainful employment seven months later.

“A closer look at the employment data shows the unemployment rate does not provide a complete picture of the situation in the state and its counties,” Clark said. “… Estimates indicate that many workers lost their jobs and stopped looking for work as the pandemic progressed. A few potential explanations for this could be expectations of being called back to work by their employers or the state waiving its job search requirement to receive unemployment benefits.”

Where those jobs lost in Franklin County occurred isn’t exactly clear.

Kentucky Capital Development Corp. President and CEO Terri Bradshaw suggested that the lost jobs could be concentrated in the food and beverage industry. She pointed to the recent closing of Frankfort chain sit-down restaurants O’Charley’s and Logan’s Roadhouse, as well as bars being limited by COVID-19 restrictions.

The other large employment sectors — such as manufacturing, logistics and retail — aren’t hurting, Bradshaw said.

“Manufacturing is hiring and they can’t find anyone to work, so it’s definitely not manufacturing,” Bradshaw said. “It’s not logistics, because that continues to grow like wildfire. It’s not retail. Small retail, once they got back in the swing of things, they pretty much got it. They’re suffering to some degree, though ... . And I don’t think it’s government workers, either.”

Though Clark says that employment is down uniformly across the state compared to what it was pre-pandemic, it appears that several surrounding counties have fared better than Franklin County when it comes to regaining employment for those who lost it.

Franklin and Anderson counties have only bounced back modestly — with Franklin adding just over 100 since April and Anderson regaining around 60 — but Henry, Owen, Scott, Shelby and Woodford counties have all seen employment numbers regain nearly half of what was lost in April, per the U.S. Bureau of Labor & Statistics.

Bradshaw seemed to think that the major issue was not jobs in Franklin County but rather with those who commuted to other counties to work. She pointed to recently reported data from both the City of Frankfort and Franklin County, with both reporting higher payroll taxes this past fiscal year.

The city, however, has already taken a well over $1 million hit this calendar year from the state and is poised to continue losing money because of state employees paying withholding taxes in their counties of residence — due to the rising trend of working from home — as opposed to Frankfort.

While these trends are unnerving, Clark said, the overall outlook should be positive. As he wrote in a report for KY Stats, Clark said that Kentucky and the rest of the nation is bouncing back.

“Kentucky’s economy has begun to recover as businesses reopened and learned to adapt their operations to reduce the risk of spreading COVID-19,” Clark said. “Total non-farm employment suggests that as of September, Kentucky recovered about 63% of jobs lost in the early months of the pandemic. So, while Kentucky’s economy is recovering, much like the rest of the nation, it has not yet fully recovered.”