When you look at the monthly reports on unemployment rates across the state, Lawrence ends up looking like a pretty good place to ride out this economic storm.
After all, Lawrence’s unemployment rate in December stood at 4 percent, significantly below the statewide average of 4.9 percent. It also is lower than the unemployment rates in neighboring communities like Topeka and Kansas City.
So, yeah, Lawrence must have something going right when it comes to jobs.
New numbers by the federal Bureau of Labor Statistics paint a starkly different picture. In a new report released earlier this month, Douglas County shows up as a community that is on a long streak of job losses, and is shedding jobs at a much faster rate than the state as a whole.
“These numbers are definitely concerning,” City Commissioner Boog Highberger said. “It is clear that people here are feeling the pain of a bad economy.”
That much has been clear for a while, but local leaders said they were surprised at the depth of the job losses, and that significant job losses started occurring well before several major employers began announcing layoffs recently.
Here are the two major trends from the BLS numbers, which show totals only through June 2008:
• Douglas County has suffered through seven consecutive months — December 2007 through June 2008 — of “year-over-year” job losses. In other words, for seven straight months, Douglas County has had fewer jobs in that month than it had in the same month the previous year. Measuring job totals in that manner is the preferred method for most economists because it lessens the impact of seasonal variations on job totals.
• During that same period, Douglas County has been shedding jobs while the state as whole has slowly been adding jobs. Several other metro areas in the state also were either adding jobs or holding steady during that time period.
From the December 2007 through June 2008 period, the state had an average monthly job growth rate of 0.5 percent. Johnson County was at 1.2 percent per month, Shawnee County at 1.3 percent per month, and Riley County at 7.3 percent per month. Lawrence’s total was negative 1.3 percent per month.
So, why do the unemployment reports look so much better than this BLS report?
Primarily because the reports are measuring two different things. The state unemployment reports measure everybody who lives in Douglas County who has a job anywhere. In other words, everybody who lives in Douglas County but commutes into Topeka or Kansas City helps drive down the local unemployment rate.
The BLS report measures only the number of jobs that are in Douglas County.
The question that local leaders were struggling with was why Lawrence began showing job losses before the rest of the state. The general consensus was that Lawrence’s economy is more dependent on construction jobs — especially single-family construction — than other communities. The real estate industry was one of the first sectors hit by the current recession, and new housing starts in Lawrence in 2008 were at their lowest level in recent memory.
The city’s major economic engine — Kansas University — also hasn’t been adding large amounts of new jobs either, said City Commissioner Rob Chestnut.
“I think all of this says that we’re suffering because we don’t have the necessary diversity in our job base,” Chestnut said.
Mayor Mike Dever said he hopes the numbers cause the community to start thinking about the type of jobs that are needed.
“The community needs to decide whether it wants to invite businesses to town that might be filled by people who work in the construction industry currently,” Dever said. “Those won’t necessarily be white-collar jobs. They may not be jobs that require a college degree. They would be jobs for people who are used to working hard for a living.”
Highberger said he thought the numbers showed the city needs to shift its focus from trying to attract large new businesses to town, and instead concentrate more on helping existing businesses. He said, for example, that could involve local government figuring out ways to help local firms deal with the credit crisis through small loans or other programs.
But what leaders were agreeing upon is that the job numbers probably won’t show quick signs of getting better.
Just in the last two months, Amarr Garage Door Group and Sauer-Danfoss have announced layoffs, and Progress Vanguard announced it was closing its Lawrence plant. None of those job losses is reflected yet in the BLS numbers.
“We’re starting to lose jobs that have been more resilient in the past,” Dever said. “I think the situation will get worse before it gets better. But I do still think it will get better.”