Lawrence’s unemployment remains high, but that’s only part of the problem, new numbers show

photo by: Courtesy: KU Institute for Policy & Social Research

Perhaps you noticed that May hasn’t been great on many fronts. (Granted, I have figured out how to gain weight despite having my mouth mostly covered, which is surely an advancement in ingenuity.) When it comes to unemployment, the news isn’t great anywhere, but there are some particularly troubling signs in Douglas County.

In short, Douglas County’s unemployment rate is growing faster than most urban counties in the state, according to the latest estimates produced by KU’s Institute for Policy & Social Research.

About the best that can be said is at least we aren’t Wichita. That’s good because Wichita, with its heavy concentration in aviation manufacturing, is surely one of the hardest-hit cities in America. The unemployment rate for Sedgwick County is 28.8%, the highest in the state for either an urban or rural county.

Douglas County had the second-highest unemployment rate in the state among any urban county. That has been the case for weeks now. You can see the estimated rates for all counties in the map above.

But as you dive deeper into the numbers, it is clear Lawrence is doing worse than Wichita in at least one unemployment category. The number of new people filing for unemployment is falling more slowly in Douglas County than in any other urban county in the state.

Yes, that is a confusing statement. Think of this way: Fortunately the number of new people filing for unemployment is less than it was several weeks ago when businesses first started to close as a result of the pandemic. For example, on May 2, there were 621 Douglas County residents making initial unemployment claims for the week, meaning they were seeking to get unemployment benefits for the first time. By May 16, the number of initial claims had fallen to 521. That’s a decline of 16%

So, it is good that Douglas County has a declining number of people seeking unemployment for the first time. What’s not good is that our numbers aren’t declining as fast as other counties. Every urban county in the state posted a larger decline in initial unemployment claims since May 2. Here’s a look at the number of initial claims for the week ending May 16 and the decline since the week ending May 2:

• Shawnee: 555 claims, down 39%

• Johnson: 1,770 claims, down 34%

• Sedgwick: 3,097 claims, down 28%

• Wyandotte: 657 claims, down 25%

• Douglas: 521 claims, down 16%

For whatever reason, it appears job losses are happening at a faster rate in Douglas County — or conversely re-hirings are happening at a slower rate — than in many other counties.

You can see evidence of that in other numbers, too. I went back to the beginning of April when unemployment numbers started soaring as a result of the pandemic. For the week ending April 4, Douglas County had an estimated unemployment rate of 9.4%. Neighboring Shawnee County had an estimated unemployment rate of 9.2%. In other words, we were only two-tenths of a percentage point higher than Shawnee County. Fast forward to the week ending May 16. Douglas County had an unemployment rate of 17.6%, while Shawnee County was at 16.6%. The gap between the two counties is now a full percentage point.

I also looked at Riley County, home to Manhattan, since it also is heavily reliant on a university. For the week ending April 4, its unemployment rate was 6.5%, which was 2.9 percentage points less than Lawrence’s. By May 16, the gap had grown to 4.9 percentage points, with Riley County’s unemployment at 12.7% compared to Douglas County’s 17.6%.

That’s a big difference. I’m not sure I understand it. I used to think it was because Riley County has a major employer next door in Fort Riley. That’s probably still a big factor, but Lawrence is right next door to the largest economy in the state — Johnson County — which produces a lot of job opportunities for Douglas County residents.

It probably is no coincidence that the two urban counties with the highest unemployment rates are the two least diversified economies in the state. Wichita is highly reliant on aviation manufacturing and Lawrence is highly reliant on government jobs, which includes KU employees. Below are some charts from KU’s Institute for Policy & Social Research that show how reliant.

The first chart is for Johnson County, the state’s strongest county by many measures. The chart shows how balanced Johnson County’s economy is. Dots that are on the far right of the chart show that the industry is a really large part of the county’s overall economy in terms of wages and revenues. Notice that Johnson County doesn’t have any industries really far to the right. Instead, it doesn’t have a single industry that is much more than 10% of the county’s overall economy. Johnson County’s unemployment rate checks in at 12.7%

photo by: Courtesy: KU Institute for Policy & Social Research

Johnson County

Next is Sedgwick County. Look at how far right the manufacturing sector, which in Wichita is aviation, is located on the chart. Manufacturing makes up nearly 30% of the Sedgwick County economy. The manufacturing economy has about a 60% unemployment rate in Sedgwick County, as evidenced by how how high the dot shows up on the chart. As noted earlier, Sedgwick County’s unemployment rate is 28.8%.

photo by: Courtesy: KU Institute for Policy & Social Research

Sedgwick County

Next is Douglas County. Look at how far right the government bubble is on our chart. More than 25% of Douglas County’s economy relies on the government sector. Even Shawnee County, home to the state capitol, is less reliant on government. It makes up less than 20% of the Shawnee County economy. I don’t have a chart for Riley County, but clearly Douglas County has one of the highest government percentages in the state.

photo by: Courtesy: KU Institute for Policy & Social Research

Douglas County

The good news is that the government sector has relatively low unemployment. The bad news is we already have a nearly 18% unemployment rate despite our largest industry being mainly spared from the job losses. What happens if government job losses begin happening, which is a real possibility given that KU employees are part of the government sector?

In short, things could be as bad, or worse, than they are in Wichita.

The charts can be kind of difficult to grasp, but one takeaway is pretty clear. Lawrence has a lot riding on whether the federal government provides financial aid to state and local governments.


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