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Report Shows Declining Wages and Few Jobs in Kentucky

Greg Stotelmyer

Five years after the recession officially ended, Kentucky workers still are grappling with a scarcity of jobs and continued declines in wages, according to a new report.

The study by the Kentucky Center for Economic Policy found a substantial gap between jobs and job-seekers that still needs to be closed.

"The jobs that we're seeing created and the jobs people have aren't necessarily good jobs," said KCEP director Jason Bailey, one of the report's authors. "People are seeing their real wages decline or stagnate."

According to the report, Kentucky is nearly 81,000 jobs short of getting back to the same unemployment rate the state had when the recession began in December 2007.

While the nonpartisan Congressional Budget Office has reported the Recovery Act created 3.5 million jobs nationwide, Bailey said he thinks the nation "pulled the plug" on that approach too early.

"It stopped us from descending into another Great Depression," he said, "but then we stopped, and we actually put the car in reverse when we should have been moving forward with further investments that help spur faster growth."

In its report, KCEP urges the federal government to avoid prematurely raising interest rates. Also, Bailey said, the eroding value of the minimum wage has to be stopped.

"It has not kept up with inflation," he said. "It's far below its peak in the 1960s, and increasing the minimum wage back up to at least $10 an hour would help about one in four Kentucky workers increase their take-home pay and better afford their family's basic needs."

An attempt earlier this year to increase the state minimum wage failed in the Kentucky Legislature. Bailey said one positive development for the working poor in Kentucky has been expanded access to health insurance.

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