2007 Kansas State of Labor Address

Good morning, everyone. I’m Jim Garner, Secretary of the Kansas Department of Labor, and it’s my pleasure to bring you the best Labor Day wishes from Governor Kathleen Sebelius and Lt. Governor Mark Parkinson. I am pleased to present this report on the State of Labor in Kansas and the first-ever Kansas Economic Report produced by our agency. It hasn’t been too many years since I presented my first State of Labor address. In 2003, the picture of the Kansas economy was, at best, gloomy. Fortunately, both Kansas and the nation have climbed out of that hole and we’ve shown significant growth in some key areas. Let me start by giving you the big picture, and then I’ll touch on some of the important details. The good news is that Kansas has a growing and diverse economy, with increased job opportunities. The Kansas economy mirrors several positive national trends, and in some cases, resists some negative ones. Our state enjoys an affordable cost of living and low inflation. We appear poised for continued growth in the coming years. Despite all these positive signs, we shouldn’t be complacent. We face some challenges down the road, in our efforts to combat poverty and to attract skilled workers to our state. The diverse Kansas economy has been doing quite well since the difficult times I reported on in 2003 and last year was particularly good. We are experiencing growth in goods-producing industries like manufacturing and in our service economy. The demand for skilled workers is high, particularly in health care. Last year, we added 20,500 jobs to the Kansas economy—the strongest job growth in our state since 1998. We are projected to surpass that record this year and next. The Kansas unemployment rate last year was 4.5 percent, just below the national rate of 4.6 percent. The value of Kansas goods and service is on the rise. The growth in our Gross Domestic Product reflects the improving economic conditions in the state. Similarly, personal income is increasing while the cost of living and inflation remain low.

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While Kansas has an affordable housing market, we also have benefited from the nationwide housing boom. Over the past five years, home values in Kansas have increased 30 percent – but homes here are still affordable. While all of these indicators are certainly good news, Kansas also shines when compared to national trends. While the nation suffers from an overall loss in manufacturing jobs, Kansas is making gains, especially in aviation. Rising demand for aviation parts and products worldwide has translated into increased employment in this industry. Aviation jobs in Kansas pay well – nearly double the average wage in our state. Kansas manufacturing has a lot to offer to outsiders, with everything from planes to food. The growing manufacturing sector has driven up Kansas exports. With aviation leading the way, our exports increased 28 percent in 2006. Transportation equipment is definitely fueling this increase as Kansas ranks 17th among the 50 states in terms of transportationrelated exports. Similarly, the growth in health care jobs is fueling our service economy. The growing demand for health care across the country is being felt in Kansas as well. We had about 48,000 job openings in this state last year and many were health care-related. In particular, there is a great demand for nurses, nurses’ aides and orderlies. Since 2001, employment in health care has increased more than 10 percent statewide. The goods and services produced in our state have steadily increased in value. Kansas real GDP has grown over the years. Last year, we recorded the 19th highest gross domestic product of the 50 states. Our workers are benefiting from these gains. Coming in just below the national average, Kansas ranks in the top half of the states in per capita personal income. And we’re improving. Two years ago we ranked 23rd in the nation. Last year, we came in at 21st.

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In contrast to the rest of the country, Kansas homeowners benefited from stable growth in our housing market in 2006. Permits for residential construction were down nationwide, but in Kansas, they went up. Our report predicts many of these positive economic trends, including job and income growth, will continue. Looking into 2012, we anticipate growth in education, health and computer-related occupations. Even with all this good news, we face challenges ahead. For starters, Kansas must prove to outsiders that this is a good place to work and live, so we can attract more businesses and more workers to our state. We’ve got a very tight labor market. About 70 percent of the Kansas population is already in the work force, and unemployment remains low. That means there aren’t a lot of people left to fill the demand for skilled workers in manufacturing, health care or other industries. With so many people already working, these demands probably won’t be met by simply getting more of our existing population into the work force. As baby boomers retire in the coming years, we’ll face a growing need to attract more skilled workers to our state. This is a real challenge, but definitely a better challenge than those we faced as we lost thousands of jobs in 2003. Fortunately, with a low cost of living, good jobs and affordable housing, we can make a good case for people to move here. Another troubling trend is the growing number of people living below the poverty line. The poverty rate in Kansas is rising. The increasing number of children living in poverty is most worrisome. We must confront the increasing gap between those who have and those who are doing without. One way to address this challenge may be to increase efforts to promote anti-poverty initiatives like the Earned Income Tax Credit and the food sales tax rebate.

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Even in the face of these new challenges, I know that Kansans will succeed. With workers, businesses and government partnering together, we can meet these challenges head on. We can create more good jobs in our state, we can attract more workers and we can help those who need a step up.

As we approach this last holiday of summer, I hope everyone will take time to recognize and honor the hard working men and women of Kansas who do their part each day to make our state a better place.

Thank you.

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