An interactive visualization of labor force, employment, and unemployment rate for all metropolitan areas in the United States.
The example from the visualization shown below shows the Wichita Metropolitan Statistical Area and All Metro Areas. Data is through January 2018. Of note regarding Wichita:
Since the Great Recession ended, the unemployment rate in Wichita has fallen, as it has nationwide.
At the same time, employment (the number of people working) in Wichita, has been steady or rising slightly. Nationwide, employment has been growing.
At the same time, the civilian labor force in Wichita has been mostly falling, while rising nationwide.
When using the visualization you can adjust the date range to focus on recent years, or any other time period.
One of the tables released is “Over-the-year change in total nonfarm employment for metropolitan areas, not seasonally adjusted,” which shows changes in jobs from January 2017 to January 2018. 2 For this time period for the Wichita metropolitan area, the number of nonfarm jobs fell from 292.1 thousand to 291.1 thousand, a decline of 1,000 jobs or 0.3 percent.
Of 382 metropolitan areas, 57 performed worse than did Wichita. For these metro areas, the average growth in jobs was 1.15 percent.
Over the same period the unemployment rate in the Wichita MSA fell from 4.6 percent to 3.7 percent.
An interactive visualization of the civilian labor force, employment, and unemployment, for each state.
In the example from the visualization shown below, which shows indexed employment growth, you can see that Kansas (the highlighted line) is not faring well. There aren’t many states whose lines are below that of Kansas.
This data is from the Bureau of Labor Statistics, a division of the United States Department of Labor. It is current through January 2018.
Click here to use the visualization and to learn about the meaning of the data series. There are four views of the data, accessible through the tabs along the top. You may select a time frame and any combination of states. By clicking on the color legend, you can emphasize the lines for one or more states. (Ctrl+click to add more than one line.)
Employment status of the civilian noninstitutional population, example showing Kansas highlighted. Click for larger.
Following the Wichita Mayor, the Chair of the Sedgwick County Commission speaks on economic development.
Last week Sedgwick County Commissioner David Dennis penned a column for the Wichita Eagle praising the county’s efforts in economic development. 1 Dennis is also chair of the commission this year.
In his column, the commissioner wrote: “Economic development is a key topic for the Board of County Commissioners and for me in particular. Right now we have a lot of momentum to make our community a more attractive place for people and businesses.”
This emphasis on the word “momentum” seems to be a fad among Wichita’s government leaders. More about this later.
Dennis also wrote: “Traditional governmental incentives are a thing of the past. There are no more blank checks from Sedgwick County for businesses.”
Except: The county participates in incentive programs that allow companies like Spirit to escape paying taxes, and when you don’t have to pay taxes, that’s the same economic effect as someone giving you cash to pay those taxes. Spirit Aerosystems will receive Industrial Revenue Bonds, which are not a loan of money to Spirit, but allow the company to avoid paying property taxes and sales taxes. 23 These incentives are a cost to the county and other units of government, and are as good as cash to Spirit. (For this and many other projects the county is not involved in the approval of the IRB program, but it doesn’t object, and it sees its tacit approval as part of its partnership with the City of Wichita.)
Besides this, the county engages in traditional incentives — almost like a blank check — but disguises them. In this case, for example, the county is contributing $7 million towards the construction of a building exclusively for Spirit’s use. How will the county pay for that? The memorandum that the county agreed to states: “The county participation of $7 million US is anticipated to be available cash.” 4
You might be wondering if the county is treating this contribution as an investment that a business would make, where it would earn back its investment plus a profit by collecting rent from Spirit. After all, county leaders tell us they want to operate government like a business.
But, you’d be wrong if you thought that. The memorandum specifies the rent as $1 per year. Not $1 per square foot per year, but $1 per year for the entire building. Furthermore, at the end of 20 years, Spirit will have the option to purchase the property for $1.
There’s really no way to characterize this transaction other than as a multi-million giveaway to Spirit. Not directly as a blank check or cash, but in a roundabout way that costs the county and benefits Spirit in the same way as cash.
I can understand how Dennis and others like Wichita Mayor Jeff Longwell want to convince the public that they are no longer dishing out cash. Often, the public doesn’t like that. So instead they do the same thing in roundabout ways like leasing a building for $1 per year or paying millions in cash for a “parking easement” for which the city has no real use. 5 Chairman Dennis and others hope you won’t notice, but these leaders would be more credible if they didn’t try to obfuscate the truth.
Sedgwick County jobs. Click for larger.Sedgwick County jobs, change from prior year. Click for larger.At the end of his column, Dennis wrote: “There is a lot of momentum and forward movement in our community right now and I’m encouraged to see what we can achieve as a team.”
There’s that word again: momentum. Coincidently, shortly after this column was published, the Bureau of Labor Statistics published an update to the Quarterly Census of Employment and Wages. It shows the number of jobs in Sedgwick County declining. This update was released after Dennis wrote his column, but as can be seen from the nearby charts, the slowdown in Sedgwick County jobs and the Wichita-area economy is not a new trend.
If Dennis really believes our economy has “momentum and forward movement,” it is my sincere hope that he is simply uninformed or misinformed about these statistics. Because if he is aware, we can only conclude that he is something else that is worse than being merely ignorant.
A column written by Wichita Mayor Jeff Longwell ignores the reality of Wichita’s economy.
This week Wichita Mayor Jeff Longwell contributed a column to the Wichita Eagle that seems to defy economic reality. 1
For example, he wrote how Wichita is a “thriving city in a brand new age of possibility.” Construction and change is everywhere, he said.
The problem is this: Even though there seems to be a lot of construction and change, Wichita isn’t thriving.
There are several ways to gauge the economic health of a city. Jobs are probably most important, especially to politicians, and jobs data is available on a frequent and timely basis. And when we look at Wichita’s growth in nonfarm jobs, we see Wichita lagging far behind the nation.
Wichita and national nonfarm employment. Click for larger.Wichita and national nonfarm employment, ratio. Click for larger.It wasn’t always that way. Nearby charts show the ratio of Wichita job growth to the nation. When the line is above the value one, it means Wichita was outpacing the nation.
Wichita has done that many times — growing faster than the nation. But that hasn’t been the case recently. In fact, as the charts show, the ratio of Wichita to the nation is sinking. Wichita is falling farther behind.
But despite this evidence, the mayor wrote, “In the coming years, we’re going to continue our growth pattern, and we need passionate individuals supporting and expanding upon our efforts.”
I sincerely hope the mayor is not aware of the poor performance of the Wichita-area economy. Because if he is aware, and he promises to “continue our growth pattern,” we’re in for continued trouble. Did you know that the Wichita-area economy shrank from 2015 to 2016? That is, we produced fewer goods and services in 2016 than in 2015, after accounting for inflation. 2 Is this the growth pattern the mayor promises to continue?
Finally, the mayor issued this plea: “We can’t be complacent in our comfort. We must reconcile our vibrant history with a limitless future. Let’s shed the stigma of what we have been and embrace the vibrant mantle of what we’re becoming.”
First, anyone who’s complacently comfortable is uninformed or unbelieving of the statistics regarding the Wichita economy.
Second, “what we’re becoming” is a low-growth area, falling behind the rest of the country, with the gap growing. The opposite of “vibrant.”
Then, the “stigma of what we have been” describes Mayor Longwell and other long-time officeholders and bureaucrats. It is they who have taken responsibility for the development of the Wichita-area economy. It is their decisions and policies that have led to our slow growth. They are eager to take credit for the successes we do have. But as the mayor’s ill-informed article shows, they are not willing to accept responsibility for failure, much less to even acknowledge the truth.
For other measures of the Wichita economy, see:
Growing the Wichita economy. Wichita leaders are proud of our region’s economic growth. Here are the numbers.
Wichita leaders are proud of our region’s economic growth. Here are the numbers.
Greater Wichita Partnership is our region’s primary agency responsible for economic development. On its website, it tells us, “We are an organization built upon teamwork and the idea that, when everyone is advancing in the same direction, we can create a powerful force to effect change — and, thanks to our numerous investors and partners, we are.” One of the things GWP says we are doing is “Growing primary jobs.” 1
Recently Greater Wichita Partnership president Jeff Fluhr told a group of young people this:
From the innovation campus at Wichita State University and development along the Arkansas River in downtown, including a new baseball stadium, to the conversations happening now about a new convention center and performing arts facility, Fluhr said the momentum is pushing to keep Wichita on par with the development of other communities around the country.
That development, which has in recent years expanded to incorporate the entire region, is a critical component to attracting and retaining talent — the exact kind of talent in the ICT Millennial Summit crowd. 2
In announcing his candidacy for Sedgwick County Commission, Wichita city council member Wichita City Council Member Pete Meitzner (district 2, east Wichita) said, “We have enjoyed great progress and growth during my two terms as a City Council member and I plan to do my part to assure Sedgwick County is part of this continued success.” 4
Given all this, it ought to be easy to find economic data supporting momentum, progress, and growth. Let’s look at some indicators.
Personal income. For the Wichita metropolitan statistical area, personal income in 2016 rose slightly from the 2015 level, but is still below the 2014 level. In real (inflation-adjusted) dollars, personal income fell in 2016. 5
Personal Income Summary, Wichita, through 2016. Click for larger.
Population. In 1990 Wichita was the 80th largest metropolitan area. In 2016 its ranking had fallen to 87.
Trends of business activity in downtown Wichita. Click for larger.Downtown Wichita. There’s been a lot of investment in downtown Wichita, both public and private. But since 2008 the trend is fewer business establishments, fewer people working downtown, and lower earnings generated in downtown Wichita. Almost every year these numbers are lower than the year before. This is movement in the wrong direction, the opposite of progress. There may be good news in that the number of people living downtown may be rising, but business activity is declining. 6
Employment. While officials promote the low Wichita-area unemployment rate, there is an alternative interpretation: The September 2017 unemployment rate declined to just about half the January 2011 rate. The number of employed persons rose by 1.2 percent, but the labor force fell by 3.1 percent. If we consider only the unemployment rate, it looks like the Wichita area is prospering. But the unemployment rate hides bad news: The number of jobs increased only slightly, and the labor force fell by a lot. While it’s good that there are more people working, the decline in the labor force is a problem. (More about employment below.) 7
Wichita MSA unemployment through September 2017. Click for larger.
Growth in output. The worst news, however, is that the Wichita-area economy shrank from 2015 to 2016. In real (inflation-adjusted) dollars, the Wichita metropolitan area gross domestic product fell by 1.4 percent. For all metropolitan areas, GDP grew by 1.7 percent. Since 2001, GDP for all metropolitan areas grew by 29.3 percent, while Wichita had 12.3 percent growth. 8
Wichita MSA employment, annual change. Click for larger.The GDP figures are for 2016, and figures for 2017 won’t be available until September. So what happened in 2017? Could 2017 be the genesis of momentum to drive our economy forward?
While GDP figures aren’t available, jobs numbers are. For the year 2016, total nonfarm employment in the Wichita metropolitan area grew by 0.62 percent. For 2017, the growth rate was 0.56 percent — a slowdown in the rate of job growth.
These job growth figures are far below the rate for the nation, which were 1.79 and 1.58 percent respectively. Annual change in job growth, Wichita and USA through 2017. Click for larger.
Furthermore, Wichita’s job growth rate in 2016 was lower than 2015’s rate of 1.07 percent. This is momentum in the wrong direction. Nearby charts illustrate. 9
What to do?
You can’t change what you don’t acknowledge.
— Phillip C. McGraw
The failure of the Wichita-area economy to thrive is a tragedy. This is compounded by Wichita leaders failing — at least publicly — to acknowledge this. While we expect people like the mayor, council members, and the chamber of commerce to be cheerleaders for our city, we must wonder: Do these people know the economic statistics, or do they choose to ignore or disbelieve them?
From private conversations with some of these leaders and others, I think it’s a mix of both. Some are simply uninformed, while others are deliberately distorting the truth about the Wichita economy for political or personal gain. The people who are uninformed or misinformed can be educated, but the liars are beyond rehabilitation and should be replaced.
In some presentations these figures may differ slightly due to data revisions and methods of aggregation. These differences are small and not material. ↩
In this episode of WichitaLiberty.TV: Dave Trabert of Kansas Policy Institute joins Bob and Karl to discuss his new book What Was Really the Matter with the Kansas Tax Plan –- The Undoing of a Good Idea. View below, or click here to view at YouTube. Episode 186, broadcast March 3, 2018.
What Was Really the Matter with the Kansas Tax Plan
New Book Outlines Tax Lessons from Kansas “Experiment”
Tax relief opponents have repeatedly pointed to the 2012 Kansas tax plan as their primary example of why tax cuts do not work. But, other states like North Carolina, Indiana, and Tennessee contemporaneously, and successfully, cut taxes. What was different about the Kansas experience?
The answer to that question is multi-dimensional according to a new book from Kansas Policy Institute, entitled What Was Really the Matter with the Kansas Tax Plan — The Undoing of a Good Idea. The book covers the six years between the conception of Brownback’s tax cuts in 2011, the tax package being signed into law in 2012 and later repealed with the largest tax hike in state history in 2017. It documents the many mistakes that occurred, a toxic political undercurrent, and several unrelated economic circumstances that negatively impacted the budget and multiple misconceptions along the way.
Author and KPI president Dave Trabert says, “Much of what went wrong was avoidable. We hope citizens and legislators across the nation can learn from the mistakes made in Kansas as they strive to create the best path forward for everyone to achieve prosperity with lower taxes.”
The final chapter of the book is “Lessons Learned” and includes these big lessons:
Don’t cut revenue and increase spending.
Explain why tax relief is necessary (i.e., what are the consequences of not reducing the tax burden).
Develop a comprehensive plan to balance the budget on less tax revenue, with room for the unpredictable but inevitable misfortunes (like plummeting oil and farm commodity prices).
Have the right systems in place, including performance-based budgeting and a reliable revenue estimating process.
To ensure that lawmakers have this information as they work in statehouses around the country, nearly 8,000 complimentary copies are being distributed to every state legislator across the country in partnership with The Heartland Institute.
Danedri Herbert, an experienced journalist currently writing for the online publication “The Sentinel,” co-authored the book and former U.S. Senator Tom Coburn of Oklahoma wrote the Foreword. Coburn writes, “This is a very important book, not only for state and national legislators who try to represent citizens instead of special interests, but also for taxing and spending watchdogs in the press and those involved with good government citizen activist groups.”
What Was Really the Matter with the Kansas Tax Plan is published by Jameson Books, Inc. and copies will be available on Amazon.
Trabert concludes, “Kansas could have successfully cut taxes as other states have done. The undoing of a very good idea—allowing citizens to keep more of their hard-earned money—gets to the crux of the serious state and national challenges we face: policy takes a back seat to politics. The efforts of many elected officials are not on solving problems in ways that create the best path forward for all Americans to achieve prosperity, but on maintaining and consolidating power.”
Metro Monitor from Brookings Institution ranks metropolitan areas on economic performance. How does Wichita fare?
Each year Brookings Institution creates an index of major metropolitan areas called Metro Monitor. The index for 2018 is at https://www.brookings.edu/research/metro-monitor-2018/. The 2018 edition, discussed below, provides rankings based on changes from the year 2015 to 2016. Comparisons over other time periods are also available.
In the area of growth, Wichita ranked 91 out of 100 metropolitan areas. For jobs, the ranking was 89. In the charts, you can see that since the last recession, the Wichita area is falling behind the country, with the gap growing each year. The good news in growth is that Wichita ranks higher in jobs at young firms (67 of 100). Young firms — which are different from small business — are vitally important to economic growth. 1
Example from Metro Monitor for Wichita. Click for larger.
In the two other major categories that Brookings looks at, Wichita is 91 out of 100 in prosperity, and 94 out of 100 in inclusion.
These rankings are based on values through 2016 and represent change from 2015. The index also has data for two other time periods of longer duration.
Looking forward
As the Brookings data end in 2016, what might we find if the data was based on 2017 values? Some of the data Brookings uses is not available until after a lengthy delay, such GDP for metropolitan areas. That data, which is an important indicator of a region’s economic health, is scheduled to be released in September 2018 for complete year 2017 data.
Employment data is available fairly quickly, although it is often revised each year in March. The nearby chart, displaying data from the Bureau of Labor Statistics, shows changes in the average annual employment for Wichita and the nation. For the year 2016, total nonfarm employment in Wichita rose by 0.61 percent. For 2017, the growth rate was 0.54 percent — a slowdown in job growth. An interactive version of the chart is available here. 2
These growth figures are far below the rate for the nation, which were 1.79 and 1.58 percent respectively.
Wichita leaders are talking about success in developing the Wichita economy; that there is momentum for the future. Based on the data we have available, the rate of growth of employment slowed down in 2017 from what was already anemic growth. What is the basis for optimism if we continue our present policies and leadership?
Annual change in job growth, Wichita and USA through 2017. Click for larger.
FRED, from the Federal Reserve Bank of St. Louis, is a resource for examining economic data and creating charts and tables. Most of the available data is data gathered from other sources, in this case the Bureau of Labor Statistics. FRED provides a consistent interactive interface to the data, and provides several ways to share the data. Start at https://fred.stlouisfed.org/. ↩
