Kansas’ work force participation rate surpasses pre-pandemic level
By TIM CARPENTER
Kansas Reflector
TOPEKA — The labor force participation rate in Kansas fully recovered from the rapid descent at outset of the COVID-19 pandemic and the number of people receiving unemployment benefits fell to the lowest level since the global health crisis began, state officials said.
The percentage of the Kansas population either working or actively looking for work stood at 67.2% in January 2020, slumped to 66.5% by June 2020 and climbed to 67.5% in September.
Edward Penner, senior economist with the Kansas Legislative Research Department, outlined the figures and a series of other economic indicators Monday for a joint House and Senate committee examining opportunities to adjust state tax policy.
“At this point,” Penner said, “all of those people are back in the labor force and then some. This has been one of those stories where Kansas has been different from the nation. Kansas workers have kind of come back into the labor force and returned to their jobs at a rate that exceeds that of what national workers have done.”
The number of individuals receiving unemployment insurance benefits in Kansas stood at 10,320 in October, the lowest number since the COVID-19 pandemic began.
At the same time, state tax revenue surpassed estimates by $750 million in the fiscal year that ended in June. The updated revenue estimate for the current fiscal year was increased by $1.3 billion, which prompted Gov. Laura Kelly and a bipartisan contingent of legislators to promote the possibility of slashing the state’s 6.5% sales tax on food.
GOP statistical pushback
Sen. Mark Steffen, a Republican from Hutchinson, said he was curious whether there was sharp improvement in work force participation after enhanced federal unemployment benefits expired in early September. Many GOP lawmakers pressured Kelly to cut off that congressional aid before the scheduled conclusion of federal programs, arguing the extra assistance was incentive for people to delay a return to their jobs. She declined to order cuts to jobless aid.
Penner said much of the labor force came back into the fold in the initial five months of the pandemic. Demise of supplemental unemployment payments didn’t substantially improve participation in the Kansas work force, he said.
Rep. Adam Smith, the Weskan Republican and chairman of the House Taxation Committee, said he was convinced businesses were still suffering labor shortages in northwest Kansas. He urged legislative staff to craft an estimate of unfilled jobs statewide in Kansas.
“I still see a lot of businesses that are hiring,” he said.
From February to April 2020, Kansas lost 158,000 non-farm jobs as the economy unraveled amid spread of the virus. The latest statistics indicated 73.5% of that job crater had been filled by September. The remaining gap might be linked to people who retired early or workers uneasy about accepting a job with a shortage of child care providers and uncertainty about influence of COVID-19 on schools, Penner said.
Sen. Tom Holland, a Baldwin City Democrat, said he had heartburn about the manner in which businesses responded to economic disruption associated with the pandemic. He said it appeared some employers focused on dropping older personnel at the upper end of the pay scale.
“My fear is that you had companies that laid off their more senior work force,” Holland said. “Basically, they’re dumping those jobs.”
Rep. Francis Awerkamp, R-St. Marys, said legislative staff ought to balance statistical presentations to the Legislature by including an assessment of financial harm caused by government pandemic directives.
“Can we also add an estimate on the economic impact of all the shutdowns, the lockdowns and the mandates from the government?” he said.
Prep for 2022 session
According to the state’s economic forecasters, the Kansas unemployment rate could complete this year at 3.9% before falling to 3.5% in 2022 and 3.4% in 2023. The national unemployment rate is expected to be around 5.5% for 2021, 3.8% in 2022 and 3.5% in 2023.
Sen. Caryn Tyson, a Parker Republican who chairs the Senate’s regular tax committee, said it was important for people to be cautious when weighing unemployment statistics. She said that while working on a master’s degree in engineering management at the University of Kansas it became evident to her labor estimates lacked precision.
“The way they gather the numbers, the data for those unemployment numbers, is speculative and not always accurate,” said Tyson, a GOP candidate for state treasurer.
Work on tax, budget and coronavirus issues in the 2022 legislative session could take on an especially partisan tone given desire of Republicans and Democrats to influence Kelly’s re-election campaign for governor in November 2022.
Tyson said she would have preferred to move ahead with significant tax reform during the 2021 legislative session, but was sidelined by House and Senate leaders who objected to timing of her goal.
The two days of hearings scheduled for the interim House-Senate tax committee is designed to prepare members of both chambers for comprehensive adjustment of state tax law in the upcoming session, she said.
“We can move forward quickly,” she told other members of the panel. “That is the objective of the two-day meeting. To help arm you and get us ready for the 2022 session.”