Monday, September 04, 2000

Report says Ky. lags in income, jobs

By Bruce Schreiner
The Associated Press

        LOUISVILLE — A report that puts Kentucky well behind the national pace in lifting personal incomes and creating high-tech jobs doesn't paint a complete picture, an economics professor says.

        And the report's conclusion that education improvements are key in the transition to an economy driven by brain power rather than muscle power reinforces initiatives under way, a spokesman for Kentucky business said.

        MDC Inc., a nonprofit research group based in Chapel Hill, N.C., said Kentucky failed to close the income gap with the nation as a whole in the past two decades. Kentucky's per capita income was 81 percent of the nation's average in 1997, the same as in 1978, the report said.

        Paul Coomes, a University of Louisville economics professor, said the findings offer generalizations that tell only half the story about Kentucky's economic condition.

        “It's true that there are parts of Kentucky that have had very low income growth, and that pulls the income down for the state,” he said.

        Other parts of the state have experienced robust growth surpassing much of the country, Mr. Coomes said. The Louisville and Lexington areas, and Northern Kentucky, in particular have had strong job growth, he said.

        Kentucky gained 543,000 jobs between 1978 and 1997, the report said, trailing the national and

        Southern rates. Kentucky would have added 700,000 jobs if it had matched the national growth rate, it said.

        The biggest employment gains by far were in the services and retail sectors, the report said. Jobs declined in agriculture and mining.

        The review of Kentucky's economy was part of a “State of the South” report issued by the research group. MDC has compiled the regional reports every two years since 1996.

        The report also said Kentucky has been slow to expand high-tech employment, with only 22 high-tech workers per 1,000 private-sector employees, placing it 39th among the states.

        Kentucky's employment in information-sector jobs and professional, scientific and technical jobs is well below the national average, it said.

        The report did find successes as well.

        It said Kentucky has far outpaced the nation in air transportation and motor vehicle manufacturing — a testament to the presence of the Delta Air Lines hub at the Cincinnati/Northern Kentucky International Airport, United Parcel Service, Toyota, Ford and the Corvette plant.

        Kentucky has run slightly ahead of the nation in the growth of business and health services, the report said.

        “While having made progress in diversifying its economy, the state has more work to do to expand its reach into the new economy,” the report said. “Especially through continued efforts to improve education, Kentucky must persist in making the transition from an economy featuring hard work to one defined more by smart work.”

        Tony Sholar, a spokesman for the Kentucky Chamber of Commerce, said the state has made strides in recent years to improve higher education and promote more entrepreneurship.

        Since 1997, the state has increased funding for universities and colleges and expanded programs for research, scholarships, enrollment growth and work force training. The state also started the so-called bucks for brains program to encourage universities to raise money to finance research into fields where they want to demonstrate national excellence.

        This year, the General Assembly enacted an economic development bill that created the position of “commissioner of the new economy.” A nationwide search is continuing to fill the job.

        Mr. Sholar said those initiatives mesh with the report's suggestions, and predicted the efforts will pay off for the state.

        He said expanding the high-tech sector could lure back young professionals educated in Kentucky but who left for jobs elsewhere.


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