Voice For Liberty

Tag: Greater Wichita Partnership

  • Wichita jobs and employment, March 2020

    Wichita jobs and employment, March 2020

    For the Wichita metropolitan area in March 2020, the labor force is up, the number of unemployed persons is up, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows increases in labor force and jobs from February, with the unemployment rate unchanged. It is unclear how the pandemic has affected this data.

    Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area for March 2020.

    Because of the COVID-19 pandemic, it is difficult to assess the meaning of the March data. BLS gathers this data through two survey programs. For employment data derived from the Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey and which counts jobs, the estimate is for the pay period that includes the twelfth day of the month. For data from the Current Population Survey, which counts people, the estimate is for the “reference week,” which is usually the week that includes the twelfth day of the month. For the Wichita metropolitan area, here are the dates of some major events that would be expected to affect employment:

    • March 13: President Trump declares a national emergency that began on March 1.
    • March 16: Social distancing guidelines announced for the nation.
    • March 24: Kansas City metro area stay-at-home order takes effect.
    • March 25: Sedgwick County stay-at-home order takes effect.
    • March 30: Kansas stay-at-home order takes effect.

    As noted, the BLS data is collected nearer the start of the month than the end. For Wichita, these events that should affect employment occurred mostly towards the end of the month. There were also these two major events that affected employment in recent months: Spirit Aerosytems announced layoffs (2,796) that started January 22 1, according to news reports, and Textron (875) the month before 2.

    BLS also offered this guidance, and more, for the March data:

    We cannot precisely quantify the effects of the pandemic on the job market in March. However, it is clear that the decrease in employment and hours and the increase in unemployment can be ascribed to the effects of the illness and efforts to contain the virus. It is important to keep in mind that the March survey reference periods for both surveys predated many coronavirus-related business and school closures in the second half of the month. 3

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 302,800 last March to 307,100 in March 2020. That’s an increase of 4,300 jobs (1.4 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.0 percent. The unemployment rate in March 2020 was 3.5 percent, down from 3.6 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 800 persons (0.3 percent) in March 2020 from February 2020, the number of unemployed persons rose by 95 (0.9 percent), and the unemployment rate was 3.5 percent, unchanged from February January. The number of employed persons not working on farms rose to 307,367 in March from 306,662 the prior month, an increase of 705 persons (0.2 percent).

    The following chart of the monthly change in labor force and employment shows the positive trend in employment and labor force over the last year. In some months the change has been small, but always positive, with one exception.

    The following chart of changes from the same month one year ago shows a slight decline in the rate of growth of both employment and labor force, but with both still growing.

    The following chart of changes in employment from the same month of the previous year shows months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.33 percent, and for the Wichita MSA, 1.56 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer periods. The change is calculated from the same month of the previous year. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

    —
    Notes

    1. https://www.kansasworks.com/ada/mn_warn_dsp.cfm?id=2021 ↩
    2. Textron, Inc. Form 8-K, December 5, 2019. Available at https://www.sec.gov/ix?doc=/Archives/edgar/data/217346/000110465919070378/tm1924597-1_8k.htm. ↩
    3. Bureau of Labor Statistics. Frequently asked questions: The impact of the coronavirus (COVID-19) pandemic on The Employment Situation for March 2020. Available at http://www.bls.gov/cps/employment-situation-covid19-faq-march-2020.pdf. ↩
  • Metropolitan employment and labor force

    Metropolitan employment and labor force

    A visualization of employment, labor force, and unemployment rate for metropolitan areas, now with data through February 2020.

    How does the Wichita metropolitan area compare with others regarding employment, labor force, and unemployment rate? The Bureau of Labor Statistics, part of the United States Department of Labor, has data that provides the answer.

    I’ve gathered data from BLS and present it in an interactive visualization with tables, charts, and a map. Click here to learn more and use the visualization. Below is an example from the visualization.

    Click for larger.
  • Wichita jobs and employment, February 2020

    Wichita jobs and employment, February 2020

    For the Wichita metropolitan area in February 2020, the labor force is up, the number of unemployed persons is up, the unemployment rate is up, and the number of people working is up when compared to the same month one year ago. Seasonal data shows increases in labor force and jobs from January.

    Data released yesterday by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a mostly improving employment situation for the Wichita Metropolitan Statistical Area.

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 302,300 last February to 307,000 this February 2020. That’s an increase of 4,700 jobs (1.6 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.6 percent. The unemployment rate in February 2020 was 3.8 percent, up from 3.6 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 1,594 persons (0.5 percent) in February 2020 from January 2020, the number of unemployed persons rose by 192 (1.8 percent), and the unemployment rate was 3.5 percent, up from 3.4 percent in January. The number of employed persons not working on farms rose to 303,935 in February from 302,533 the prior month, an increase of 1,402 persons (0.5 percent).

    A note regarding recent layoffs and COVID-19

    This data is for February 2020. Spirit Aerosytems announced layoffs (2,796) that started January 22 1, according to news reports, and Textron (875) the month before 2. The effect of these layoffs should be realized in these statistics. For employment data derived from the Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey, the estimate is for the pay period that includes the twelfth day of the month. For data from the Current Population Survey, which counts people, the estimate is for the “reference week,” which is usually the week that includes the twelfth day of the month. This data was collected well before there was any talk of closing businesses due to the COVID-19 pandemic.

    The following chart of the monthly change in labor force and employment shows the positive trend in employment and labor force over the last eight months.

    The following chart of changes from the same month one year ago shows a decline in the rate of growth of both employment and labor force, but with growth returning the past six or seven months.

    The following chart of changes in employment from the same month of the previous year shows months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.37 percent, and for the Wichita MSA, 1.81 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer periods. The change is calculated from the same month of the previous year. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

    —
    Notes

  • Wichita jobs and employment, January 2020

    Wichita jobs and employment, January 2020

    For the Wichita metropolitan area in January 2020, the labor force is up, the number of unemployed persons is down, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows increases in labor force and jobs from December.

    Data released yesterday by the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving employment situation for the Wichita Metropolitan Statistical Area.

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 299,400 last January to 303,100 this January 2020. That’s an increase of 3,700 jobs (1.2 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.5 percent. The unemployment rate in January 2020 was 3.7 percent, down from 3.9 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 1,149 persons (0.4 percent) in January 2020 from December 2019, the number of unemployed persons rose by 79 (0.7 percent), and the unemployment rate was 3.4 percent, unchanged from December. The number of employed persons not working on farms rose to 302,522 in January from 301,452 the prior month, an increase of 1,070 persons (0.4 percent).

    The following chart of the monthly change in labor force and employment shows the positive trend in employment and labor force over the last nine months.

    The following chart of changes from the same month one year ago shows a decline in the rate of growth of both employment and labor force considering the entire year, but with growth returning the past five or six months.

    The following chart of changes in employment from the same month of the previous year shows months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.38 percent, and for the Wichita MSA, 1.80 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer periods. The change is calculated from the same month of the previous year. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

    A note regarding recent layoffs

    This data is for January 2020. Spirit Aerosytems announced layoffs that started January 22, according to news reports. The effect of these layoffs is probably not realized in these statistics. For employment data derived from the Current Employment Statistics (CES) program, also known as the payroll survey or the establishment survey, the estimate is for the pay period that includes the twelfth day of the month. For data from the Current Population Survey, which counts people, the estimate is for the “reference week,” which is usually the week that includes the twelfth day of the month.

    Photo credit unsplash-logoDorrell Tibbs

  • Wichita jobs and employment, December 2019

    Wichita jobs and employment, December 2019

    For the Wichita metropolitan area in December 2019, the labor force is up, the number of unemployed persons is down, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows small increases in labor force and jobs from November.

    Data released today by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a slowly improving employment situation for the Wichita Metropolitan Statistical Area. (Of note, this data was gathered before the announcements of layoffs at Spirit Aerosystems in Wichita.)

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 303,600 last December to 305,300 this November. That’s an increase of 1,700 jobs (0.6 percent). (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.4 percent. The unemployment rate in December 2019 was 3.2 percent, down from 3.4 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 288 persons (0.1 percent) in December 2019 from November 2019, the number of unemployed persons rose by 40 (0.4 percent), and the unemployment rate was 3.4 percent, unchanged from November. The number of employed persons not working on farms rose to 301,452 in December from 301,204 the prior month, an increase of 248 persons (0.2 percent).

    The following chart of the monthly change in labor force and employment shows the rising trend in employment and labor force over the last eight months.

    The following chart of changes from the same month one year ago shows a decline in the rate of growth of both employment and labor force considering the entire year, but with growth returning the past four or five months.

    The following chart of changes in employment from the same month of the previous year shows some months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.58 percent, and for the Wichita MSA, 1.27 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer time periods. The change is calculated from the same month one year ago. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

  • Wichita aerospace manufacturing concentration

    Wichita aerospace manufacturing concentration

    Wichita leaders want to diversify the area economy. Has there been progress?

    In the wake of layoffs at Textron Aviation (875) 1 and Spirit Aerosystems (2,796), 2 Wichita’s leaders shift their attention to the need to diversify the Wichita metropolitan area economy. This has been a recognized need for a long time. 3

    One way to measure the concentration of an industry in a location is by the proportion of employment in that industry. The Bureau of Labor Statistics provides employment by industry for metropolitan areas. I’ve gathered the data for the Wichita MSA for two industries: Aerospace Product and Parts Manufacturing (NAICS code 3364) and all manufacturing. I’ve gathered this data for the Wichita Metropolitan Statistical Area and compare it to total private sector employment. This data is not adjusted for seasonality, as some are available only in that manner. Data is through November 2019.


    As the charts illustrate, there was a large shift in the two industry’s share of employment around the time of the Great Recession. Since then, the ratios have been more stable, with a slow decline until a small reversal of that trend over the last two years.

    The chart of employment ratio changes from the same month one year ago confirms: Manufacturing and aerospace employment has grown faster than total private employment for the last two years or so.

    Another way to measure the concentration of industry is through location quotients. The Bureau of Labor Statistics provides these, most notably for counties as part of the Quarterly of Census and Wages. 4 As described by BLS, “Location quotients are useful for studying the composition of jobs in an area relative to the average, or for finding areas that have high concentrations of jobs in certain occupations. As measured here, a location quotient shows the occupation’s share of an area’s employment relative to the national average.” 5

    Further: “For example, a location quotient of 2.0 indicates that an occupation accounts for twice the share of employment in the area than it does nationally, and a location quotient of 0.5 indicates the area’s share of employment in the occupation is half the national share.”

    This data is available by industry. I’ve gathered data for Aerospace Product and Parts Manufacturing (NAICS code 3364) for Sedgwick County and present it in a nearby chart.


    First, note that the location quotient is large, averaging around 32 in recent years. This means the concentration of workers in this industry in Sedgwick County is 32 times the concentration nationwide.

    Second, the location quotient fell from 2007 through 2014. Since then, it has been steady.

    Has the Wichita area diversified its economy? Based on these two measures, the answer is yes. That increase in diversity coincided with a large decline in aviation-related employment, with that decline being larger than the decline in all Wichita-area private-sector employment. That was not planned or desired. It was a result of worldwide trends, most notably the Great Recession.

    But since 2014, concentration in aviation-related employment has changed little, meaning no progress in diversification.

    —
    Notes

    1. Textron, Inc. Form 8-K, December 5, 2019. Available at https://www.sec.gov/ix?doc=/Archives/edgar/data/217346/000110465919070378/tm1924597-1_8k.htm. ↩
    2. https://www.kansasworks.com/ada/mn_warn_dsp.cfm?id=2021 ↩
    3. See, for example: Roe, John. Where To From Here? Surviving The Coming Bad Times Will Require A Direction, Wichita Eagle, February 7, 1993. ↩
    4. Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Available at https://www.bls.gov/cew/datatoc.htm. ↩
    5. Bureau of Labor Statistics. Using Location Quotients to Analyze Occupational Data. Available at https://www.bls.gov/oes/highlight_location_quotients.htm. ↩
  • Can Wichita learn from a setback?

    Can Wichita learn from a setback?

    What can Wichita learn from the news of layoffs at Spirit and Textron?

    While the Wichita metropolitan area is facing immediate stress due to layoffs at two large employers, we need to look at the long-term horizon and evaluate whether our economic development strategy needs adjustments.

    Like many areas, Wichita relies on economic development incentives to lure companies, or to persuade them to stay rather than leave for elsewhere. There is much research finding incentives playing a minor part in business decisions. Nathan M. Jensen, for example, found this:

    In my own study of 80 incentive offerings in Texas, published in October in the journal Public Choice, I found that numerous companies applied for incentives after they had already broken ground and, in some cases, after they had completed building. A few even noted in their applications that they weren’t looking at other states for their investments. Yet all of these companies received taxpayer dollars for doing what they would have done anyway.

    This points to the open secret of economic development: Though incentives are rarely effective in changing firms’ investment decisions, they do allow politicians to attend ribbon-cutting ceremonies where they can highlight their own role in attracting a new company (or retaining an old one) and creating jobs. 1

    Timothy J. Bartik found this: “Reviewing 34 estimates from research studies of incentives’ effects, Bartik found that typical incentives only tip 2 to 25 percent of location decisions — that is, the company wouldn’t have located there ‘but for’ the incentive.” 2

    So how can we know if incentives are needed in a particular instance? It’s difficult, as neither party has an incentive to be forthright. If a business executive does not ask for incentives, the firm’s owners are justified in asking why not. And it’s difficult for politicians and bureaucrats to turn down opportunities to bask in the glory of groundbreaking and ribbon-cutting ceremonies and their improved chances at re-election.

    Incentives increase the cost of government for those who don’t receive them. Yes, cities like Wichita promote a benefit-cost analysis that shows that for each dollar spent or forgone for incentives, the city receives even more. But this happens with all economic activity, even that which is not incentivized. This leads to the important question: Is the incentive necessary? With so much evidence showing incentives are not necessary, Wichita spends a lot on companies that don’t need incentives, with everyone else paying their cost.

    Even before the Spirit announcement, Wichita was looking at a slowly-growing economy. The Center for Economic Development and Business Research at Wichita State University provides forecasts for the Wichita economy. For 2020, CEDBR wrote in its October forecast, “For 2020, growth is expected to be more modest, as the Wichita economy is projected to add approximately 1,600 new jobs and grow 0.5 percent.” 3 For comparison, total nonfarm employment rose by 2,800 jobs (0.9 percent) from November 2018 to November 2019. For the same period, employment in the nation grew by 1.5 percent. CEDBR forecast a slowing of the growth of the Wichita economy, and that was well before the announcements of layoffs at Texron and Spirit.

    What to do?

    A Wichita Eagle editorial suggests diversifying the local economy. That’s been a goal for decades. But it hasn’t happened. 4

    The Eagle also advises “swift, decisive action,” taking “economic development off the back burner, where it’s languished for years.” This is surprising, as organizations like Greater Wichita Partnership are devoted to the task of economic development. GWP tells us, “Fast-forwarding economic growth is at the heart of the Greater Wichita Partnership’s mission. 5 The cost of employing its two top executives topped $485,000 in 2018. It also paid $115,000 to share an executive with another agency. 6 If the Eagle thinks this is practicing economic development at a slow simmer, we need to make a few big changes.

    The Eagle also calls for “generous funding streams.” This may be a reference to the common perception that Wichita has few economic development incentives available. But we have about the same as everyone else: Forgiveness of property and sales taxes, tax increment funding, refunds of employee state withholding taxes, sales tax districts, investment tax credits, historic tax credits, loans, parking easements, grants, and regulatory relief. The city says it no longer uses cash incentives, which is not true.

    The Eagle notes some bright spots, mentioning specifically, “Cargill’s decision to stay in Wichita.” But that was a decision to stay, and it came at great cost to the city.

    We need to say no to incentives for large firms.

    There’s plenty of evidence that young business firms are the key to economic growth. 7 But Wichita’s economic development policies, as evidenced by the lavishing of subsidy on Spirit and Cargill, are definitely stacked against the entrepreneur.

    These subsidies and practices are harmful to the Wichita economy, creating a strangling effect on entrepreneurship and young companies. As large subsidized companies escape paying taxes, others have to pay. This increases the burden of the cost of government on everyone else — in particular on the companies we need to nurture.

    Instead, Wichita relies on targeted investment in our future. Our elected officials and bureaucrats believe they have the ability to select which companies are worthy of public investment, and which are not. It’s a form of centralized planning by government that shapes the future direction of the Wichita economy. It hasn’t been working.

    —
    Notes

    1. *The Amazon HQ2 Fiasco Was No Outlier.* Available at https://www.wsj.com/articles/the-amazon-hq2-fiasco-was-no-outlier-11544800749. ↩
    2. Upjohn Institute. Available at https://www.upjohn.org/research-highlights/how-effective-are-local-economic-development-incentives. ↩
    3. Center for Economic Development and Business Research at Wichita State University. Wichita Employment Forecast. October 3, 2019. Available at https://www.cedbr.org/content/2019/eoc/2020-wichita-forecast.pdf. ↩
    4. Weeks, Bob. Wichita aerospace manufacturing concentration. Available at https://wichitaliberty.org/economics/wichita-aerospace-manufacturing-concentration/. ↩
    5. https://greaterwichitapartnership.org/about_us/about_us. ↩
    6. IRS form 990 for 2018. ↩
    7. Jason Wiens and Chris Jackson. *The Importance of Young Firms for Economic Growth. * Available at https://www.kauffman.org/what-we-do/resources/entrepreneurship-policy-digest/the-importance-of-young-firms-for-economic-growth. ↩
  • Wichita jobs and employment, November 2019

    Wichita jobs and employment, November 2019

    For the Wichita metropolitan area in November 2019, the labor force is up, the number of unemployed persons is down, the unemployment rate is down, and the number of people working is up when compared to the same month one year ago. Seasonal data shows small increases in labor force and jobs from October.

    Data released last week by the Bureau of Labor Statistics, part of the United States Department of Labor, shows a slowly improving employment situation for the Wichita Metropolitan Statistical Area.

    Click charts and tables for larger versions.

    Total nonfarm employment rose from 303,600 last November to 306,100 this November. That’s an increase of 2,800 jobs or 0.9 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.) For the same period, employment in the nation grew by 1.5 percent. The unemployment rate in November 2019 was 3.2 percent, down from 3.3 percent one year ago.

    Considering seasonally adjusted data from the household survey, the labor force rose by 634 persons (0.2 percent) in November 2019 from October 2019, the number of unemployed persons rose by 10 (0.1 percent), and the unemployment rate was 3.4 percent, unchanged from October. The number of employed persons not working on farms rose to 301,338 in November from 300,714 the prior month, an increase of 495 persons, or 0.2 percent.

    The following chart of the monthly change in labor force and employment shows the rise in employment and labor force over the last five months.

    The following chart of changes from the same month one year ago shows a decline in the rate of growth of both employment and labor force. The values are (almost all) growing, but at a slower pace each month until the last three months.

    The following chart of changes in employment from the same month of the previous year shows some months when the Wichita MSA performed better than the nation. Over the past 12 months, the average monthly job growth for the nation was 1.49 percent, and for the Wichita MSA, 0.82 percent.

    The following two charts show changes in jobs for Wichita and the nation over longer time periods. The change is calculated from the same month one year ago. For times when the Wichita line was above the nation, Wichita was growing faster than the nation. This was often the case during the decades starting in 1990 and 2000. Since 2010, however, Wichita has rarely outperformed the nation and sometimes has been far below the nation.

  • Wichita economy grows, and a revision

    Wichita economy grows, and a revision

    The Wichita economy grew in 2018, and revised statistics show growth in 2017.

    Statistics released this month by the Bureau of Economic Analysis, an agency of the United States Department of Commerce, report real gross domestic product (GDP) figures for metropolitan areas. Also included are revised statistics for previous years.

    For 2018, the Wichita metropolitan area GDP, in real dollars, grew by 3.3 percent. Revisions to 2017 data show that Wichita GDP grew by 1.7 percent in 2017. Last year BEA reported growth for that year of -1.4 percent.

    In the statistics released this month, GDP in 2018 was $32,832,296 thousand, measured in chained 2012 dollars. In 2017 it was $31,780,917 thousand, a change of $1,051,379 thousand or 3.3 percent. For the nation, real GDP grew by 2.9 percent.

    The revision to the 2017 GDP may come as a surprise. The nearby chart shows that while GDP rose in that year, employment declined.