Each year the Kansas Department of Transportation surveys the condition of highway pavement and issues a report called the Network Optimization System (NOS) Survey. 1
Of the condition of highways, the report notes: “Since the data was first collected in 1983, the percentage of pavement surface in good condition has appreciably increased while the percentage of poor pavement has significantly decreased.”
Kansas Highway Conditions, through 2017. Click for larger.Here’s a chart of the conditions of Kansas roads and highways. 2 It shows that, for interstate highways, the percent of the system in good condition has been pretty level since 2001, although there is a slight decline recently that is within the range of normal year-to-year variation. For non-interstate highways, the percent in good condition fell starting in 2004, but has rebounded, with a small decline in the most recent year.
Based on these charts, there’s no factual basis to claim that Kansas roads and highways are deteriorating or crumbling.
KDOT notes that the condition report “…also shows that while the last few years have been challenging due to very tight budgets, KDOT and its partners continue to find means to maintain the pavement surface condition.” The most recent financial report from KDOT shows that spending on preservation has fallen significantly the past three years, while spending on maintenance has been level. 3
A look at some of the large economic development programs in Wichita and Kansas.
Here’s video of a presentation I gave at the Wichita Pachyderm Club this week on economic development incentives. The video was produced by Paul Soutar of Graphic Lens. View below, or click here to view at YouTube.
Following, articles that address some of the topics I presented:
Industrial revenue bonds in Kansas: Industrial Revenue Bonds are a mechanism that Kansas cities and counties use to allow companies to avoid paying property and sales taxes.
Wichita TIF projects: some background: Tax increment financing disrupts the usual flow of tax dollars, routing funds away from cash-strapped cities, counties, and schools back to the TIF-financed development. TIF creates distortions in the way cities develop, and researchers find that the use of TIF means lower economic growth.
Community improvement districts in Kansas: In Kansas Community Improvement Districts, merchants charge additional sales tax for the benefit of the property owners, instead of the general public.
STAR bonds in Kansas: The Kansas STAR bonds program provides a mechanism for spending by autopilot, without specific appropriation by the legislature.
For the Wichita metropolitan area in August 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.
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.
Click for larger.
The best numbers for Wichita are the total nonfarm employment series, which rose from 291,300 last August to 296,000 this July. That’s an increase of 4,700 jobs, or 1.6 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)
The unemployment rate fell to 3.8 percent, down from 4.6 percent from a year ago.
Considering seasonally adjusted data from the household survey, the labor force rose by five persons from July 2018, and the number of unemployed persons fell by 511 (4.7 percent), and the unemployment rate fell to 3.6 percent from 3.8 percent. The number of employed persons not on farms rose to 296,366 in August from 295,810 the prior month, an increase of 556 persons, or 0.2 percent.
What is the importance of agriculture to the Kansas economy?
United States Representative Roger Marshall said: “My district is the largest ag-producing congressional district in the country, with 60 percent of the economy being ag related. Forty percent of the Kansas economy is ag related.” 1
The Kansas Hospital Association argues: “In Table 5, the total income impact of health care services resulted in an estimated $19.4 billion for the economy. Thus, health care is directly or closely related to about 11.6 percent of the state’s total income.” 2
The Kansas Department of Transportation produced a study that finds: “In 2017, $20.6 billion in annual economic benefit was supported by aviation and aviation-related activities in Kansas, supported nearly 91,300 jobs, and generated more than $4.4 billion in annual payroll.” 3 $20.6 billion is 14.9 percent of the $138.328 billion Kansas economy.
The nonalcoholic beverage industry says: “With a direct economic impact of $2.0 billion.” Then “Factoring in this retail impact further broadens the economic reach of the nonalcoholic beverage industry by an additional $1.7 billion beyond what our industry generates directly.” 4 The total of $3.7 billion is about 2.7 percent of the Kansas economy. That’s coming just from nonalcoholic beverages.
We can easily find other examples of industry groups emphasizing their importance to the Kansas economy. But these findings are almost always exaggerated, especially in the case of agriculture.
For example, the Kansas Department of Agriculture says “Using the most recent IMPLAN data available (2015) adjusted for 2017, 65 agriculture, food, and food processing sectors were analyzed to determine their overall contribution to the Kansas economy. These 65 sectors have a total direct output of approximately $47.9 billion and support 125,714 jobs in Kansas.” 5 The document says this is 31.6 percent of Kansas GDP.
Direct output is defined in the same document in this paragraph: “Direct, indirect, and induced effects sum together to estimate the total economic contribution in the state. Direct effects capture the contribution from agricultural and food products. Indirect effects capture the economic benefit from farms and agricultural businesses purchasing inputs from supporting industries within the state. Induced effects capture the benefits created when employees of farms, agricultural businesses, and the supporting industries spend their wages on goods and services within the state.”
Adding indirect and induced effects results in $67,461,102,358 ($67.5 billion) in economic contribution, which the Department of Agriculture says is 44.5 percent of Kansas economic output, also called gross domestic product (GDP).
It is true that agricultural workers spend money like anyone else. They spend on food, shelter, taxes, recreation, cars, clothing, and other things. Therefore, an agriculture industry support group might say “Farmers keep small town Kansas restaurants in business, providing jobs for restaurant workers.”
Then, a restaurant industry support group might say “By buying meats and produce locally, restaurants keep Kansas farmers in business.”
All this is true. But we need to be careful when counting contributions to the whole. Here, when farmers eat at restaurants, that is counted as induced effects of agriculture contributing to Kansas GDP. But, the restaurant industry counts the production and serving of these meals as its own direct output to Kansas GDP.
Similarly, when the restaurant buys food from a farmer, the purchase counts as indirect effects of the restaurant industry as they purchase inputs and contribute to Kansas GDP. The farmer, of course, considers that as his direct output, again contributing to Kansas GDP.
This economic activity is good and natural, and the more, the better. But we can’t count it twice when allocating GDP to industries.
Consider the industry category “Dog and cat food manufacturing,” said by the Department of Agriculture to employ 2,183.7 people in Kansas, producing $3,125,350,139 ($3.1 billion) in contribution to the Kansas GDP. That’s 2.2 percent of Kansas GDP. Should all the output of this industry be considered part of Kansas agriculture? The manufacturing industry counts this as part of its contribution to GDP. It’s true that the inputs to the manufacturing are agricultural products, but we don’t know if they are ag products that are produced in Kansas and should be counted as part of Kansas GDP.
Kansas GDP by Industry
The nearby table shows that for 2017, agriculture counted for 3.2 percent of the Kansas economy. For the period 1997 to 2017, it was 2.7 percent. There are many industry groups with greater output than agriculture.
How are the GDP numbers for agriculture inflated to 44.5 percent? IMPLAN, that’s how. It is an economic model used to estimate contributions of economic activity to the larger economy. 6
It’s true that when an industry produces economic activity, it spawns other economic activity. These are the indirect and induced effects that IMPLAN produces. But these numbers are hugely inflated. When considering all industries, economic activity is counted more than once.
When it suits their needs, industry groups, like other special interest groups, use IMPLAN to boost their importance. Consider manufacturing, which at 16.4 percent of GDP is the second-largest industry in Kansas. When manufacturing companies appeal to state or local government for subsidies, they use IMPLAN or related mechanisms to inflate their importance. Almost everyone does this. It’s standard procedure.
Except: When multiple industries the same indirect and induced economic activity, such analysis becomes meaningless. If we added up the IMPLAN-calculated value of each industry to the Kansas economy, we’d end up with a value several times larger than the actual value. This is what the Kansas Department of Agriculture has done. We expect this behavior from companies or local economic development agencies when they appeal for economic development incentives and other forms of special treatment. They need to inflate their importance to gullible government bureaucrats and elected officials. But government agencies should not do this.
On the other hand, what is the harm in overstating the importance of an industry? The harm is that policy decisions are made using false evidence.
For August 2018, more jobs in Kansas, and a nearly unchanged labor force. Wichita jobs also rose.
Data released this week from the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving jobs picture for Kansas in August 2018.
Over the year (August 2017 to August 2018), the Kansas labor force is down slightly, while up slightly over the past three months. These changes are small, all being in the range of 0.1 percent or less.
The number of unemployed persons continues to fall, declining by 1.4 percent from July to August. The unemployment rate was 3.3 percent in August, down from 3.6 percent from one year ago, and from 3.4 percent in July.
Click for larger
The number of Kansas nonfarm jobs for August 2018 rose by 1.9 percent over last August, adding 26,600 jobs. This is using seasonally adjusted data, and the non-adjusted figure is larger at 29,900.
From July 2018 to August, jobs in Kansas rose by 3,600, which is 0.3 percent.
Click for larger
This release also provided some data for metropolitan areas. For the Wichita MSA, here are employees on nonfarm payrolls, not seasonally adjusted:
August 2017: 291,300
July 2018: 294,500
August 2018: 296,000 (up 4,700 jobs, or 1.6 percent over the year)
Comparing July 2018 to August 2018 isn’t meaningful using this data, as it is not adjusted for seasonality.
Photo by Patrick Emerson. Used under a Creative Commons license.
Wichita and national GDP. Click for larger.The GDP figures are real, meaning adjusted for inflation. They are annual numbers through 2017. The release this week also includes revisions for the prior year. In the case of Wichita, the revision was significant, with a loss in GDP being revised to a gain. See Wichita economy shrinks, and a revision for details.
A nearby example from the visualization compares Wichita metro GDP growth to that of the nation’s metropolitan areas.
For 2017, the Wichita metropolitan area GDP, in real dollars, fell by 1.4 percent. Revised statistics for 2016 indicate growth of 3.8 percent for that year. Last year BEA reported growth of -1.4 percent.
In the revised statistics released today, GDP in 2012 was 28,346 million in chained 2009 dollars. In 2017 it was 29,610 million, a change of 1,264 million or 4.4 percent. For all U.S. metropolitan areas, the same statistic increased from 13,692,212 million to 15,224,212 million, an increase of 1,532,000 million or 11.2 percent.
Kansas has more state government employees per resident than most states, and the trend is rising.
Each year the United States Census Bureau surveys federal, state, and local government civilian employees. 1 The amount of payroll for a single month (March) is also recorded. In this case, I’ve made the data for state government employees available in an interactive visualization.
For 2016, Kansas had 17.90 full-time equivalent state government employees per thousand residents. This ranked 15th among the states. These employees resulted in payroll cost of $979 per resident, which is 21st among the states.
Nearby is an example from the visualization showing state government employment count (full-time equivalent) per thousand residents for Kansas and some nearby states. It shows total employment, and in addition, education employment and hospital employment. (Since nearly all employees in Kansas elementary and secondary schools are employees of local government, not the state, the employees shown are working in higher education. See below for visualizations of local government employees.)
Two things are evident: The level of employment in Kansas is generally higher than the other states, and the trend in Kansas is rising when many states are level or declining. This data counters the story often told, which is that state government employment has been slashed.
If we look at data for state and local government employees, the conclusions are nearly the same.
Click here to learn more and access the visualization.
An interactive visualization of state government employment, grouped by state and function.
These are state government employees only. Local and federal government employees are not included.
Source of data is United States Census Bureau, Local Government Employment and Payroll Data: March 2016. The program’s page is Annual Survey of Public Employment & Payroll (ASPEP).
In the visualization, I’ve multiplied the March payroll number by 12 to produce an approximation of annual payroll. Using each state’s population for each year, I’ve also computed the annual payroll on a per-resident basis and the number of full-time equivalent (FTE) employees per thousand residents.
State and local tax collections presented in an interactive visualization.
The United States Census Bureau provides tax collection data for states and local governments on a quarterly basis. The data is provided by category such as total taxes, sales taxes, personal income taxes, etc. 1
The Bureau describes the program as:
The Quarterly Summary of State and Local Government Tax Revenue provides quarterly estimates of state and local government tax revenue at a national level, as well as detailed tax revenue data for individual states. The information contained in this survey is the most current information available on a nationwide basis for government tax collections.
While the state data records are ultimately from state government sources, the classification of taxes among the different categories is entirely the responsibility of the Census Bureau. Therefore, tax classification might not reflect the actual classification or presentation as requested by the various state government respondents. 2
This data is not adjusted for inflation. Some taxes, such a property taxes, show large seasonal variations.
I’ve gathered the data and have made it available in an interactive visualization. There are several views of the data, represented by the tabs at the top. You may select a time frame, the states that appear, and the tax categories that appear.
Kansas has nearly the highest number of local government employees per resident, compared to other states.
Local government employment by state. Click for larger.Local government employment in education. Click for larger.For all local government employees, Kansas had 50.59 per thousand residents in 2016, higher than all states (and areas) but the District of Columbia and Wyoming. These employees had an annual payroll of $2,141.16 per resident. Ten states were higher.
Considering elementary and secondary education, Kansas had 30.03 such employees per thousand residents. This was higher than all states but Vermont and Wyoming. The payroll for these employees was $1,150.85 per resident, with eleven states above Kansas.
Kansas is a small state in terms of population. Might small states have higher needs for employees on a per-resident basis? A plot of employees vs. population shows nearly no relationship between the two.
These are local government employees only. State and federal government employees are not included.
Of note, Hawaii has no local employees in elementary and secondary education, as it has one school district which is run by the state. 1
The source of this data is the United States Census Bureau. I’ve gathered it and placed in in an interactive visualization. Click here to learn about the visualization and use it to make your own charts and tables.
State population vs. local government employment per resident. Click for larger.
An interactive visualization of local government employment, grouped by state and function.
These are local government employees only. State and federal government employees are not included.
Source of data is United States Census Bureau, Local Government Employment and Payroll Data: March 2016. The program’s page is Annual Survey of Public Employment & Payroll (ASPEP).
In the visualization, I’ve multiplied the March payroll number by 12 to produce an approximation of annual payroll. Using each state’s population for each year, I’ve also computed the annual payroll on a per-resident basis and the number of full-time equivalent (FTE) employees per thousand residents.
In this episode of WichitaLiberty.TV: The end of a Sedgwick County Commission election, the Wichita Eagle editorializes on school spending and more taxes, and Wichita Mayor Jeff Longwell seems misinformed on the Wichita economy. View below, or click here to view at YouTube. Episode 207, broadcast August 26, 2018.
Article: Wichita Eagle argues for higher taxes: The Wichita Eagle editorial board wants higher taxes. Relying on its data and arguments will lead citizens to misinformed and uninformed opinions.
Article: The Wichita Mayor on employment: On a televised call-in show, Wichita Mayor Jeff Longwell is proud of the performance of the city in growing jobs.
For the first quarter of 2018, the number of jobs in Sedgwick County grew, but at a rate slower than the nation.
Data released today from the Bureau of Labor Statistics, part of the United States Department of Labor shows an improving labor picture in Sedgwick County, but one growing at one-fifth the rate of the nation.
For the first quarter of 2018 there were 12,500 establishments in Sedgwick County employing 247,800 workers. That is an increase in jobs of 0.3 percent from the same time the previous year, a rate which ranked 293 among the nation’s 350 largest counties. For the same period, the national job growth rate was 1.6 percent.
(Ranked by labor force, Sedgwick County is the 120th largest county.)
The average weekly wage was $967, an increase of 2.4 percent over the year, that change ranking 228 among the same 350 largest counties. The U.S. average weekly wage increased 3.7 percent over the same period.
For July 2018, more jobs in Kansas, and a nearly unchanged labor force. Wichita jobs also rose.
Data released today from the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving jobs picture for Kansas in July 2018.
Over the year (July 2017 to July 2018), the Kansas labor force is down slightly, while up slightly over the past three months. These changes are small, all being in the range of 0.1 percent.
The number of unemployed persons continues to fall. The unemployment rate remains at 3.4 percent, down from 3.6 percent from one year ago.
Click for larger.
The number of Kansas nonfarm jobs for July 2018 rose by 1.7 percent over last July, adding 23,400 jobs. This is using seasonally adjusted data, and the non-adjusted figure is larger at 24,900.
Click for larger.
This release also provided some data for metropolitan areas. For the Wichita MSA, here are employees on nonfarm payrolls, not seasonally adjusted:
July 2017: 290,600
June 2018: 297,700
July 2018: 295,200 (up 4,500 jobs, or 1.6 percent over the year)
Comparing June 2018 to July 2018 isn’t meaningful using this data, as it is not adjusted for seasonality.
Of note, the same data series for the nation rose from 146,486,000 to 148,901,000 over the year, an increase of 1.6 percent.
For the Wichita metropolitan area in June 2018, jobs are up, the unemployment rate is down, and the labor force is smaller, compared to the same month one year ago.
Data released this week 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 for larger.
The best numbers for Wichita are the total nonfarm employment series, which rose from 294,900 last June to 297,900 this June. That’s an increase of 3,000 jobs, or 1.0 percent. (This data is not seasonally adjusted, so month-to-month comparisons are not valid.)
Of note, the same series of data for the nation rose from 147,578,000 to 150,057,000 over the same time, an increase of 1.7 percent.
The unemployment rate fell to 4.0 percent from a year ago. Part of the improvement in the unemployment rate is due to a slightly smaller labor force.
Considering seasonally adjusted data from the household survey, the labor force rose slightly from May 2018, and employment was unchanged. This is a slowdown of a positive trend in the previous three months.
On a televised call-in show, Wichita Mayor Jeff Longwell is proud of the performance of the city in growing jobs.
On the inaugural episode of Call the Mayor on KPTS, Wichita’s public television station, Wichita Mayor Jeff Longwell said this:
Three years ago the biggest concern in this community is we need jobs. Jobs, jobs, jobs. And today, we need people. And so keeping Cargill in Wichita and seeing Spirit grow and seeing companies invest is far different than what we had just three years ago when people were so concerned about the opportunity to find meaningful employment in our city.
What the mayor said sounds good. Now. here are statistics from Bureau of Labor Statistics, civilian labor force and nonfarm employment by metropolitan area, seasonally adjusted, for the Wichita Metropolitan Statistical Area:
May 2018
Civilian labor force: 306,574 (down by 1.5 percent)
Employment: 295,012 (down by 0.42 percent)
Unemployment rate: 3.8 percent (down by 1.0 percentage point, or 20.8 percent)
These are statistics from the Local Area Unemployment Statistics (LAUS) data set, also known as the household survey.
Here are some other statistics, again from Bureau of Labor Statistics, state and area employment, seasonally adjusted, for the Wichita Metropolitan Statistical Area:
May 2015
Employment: 295,500
May 2018
Employment: 298,600 (up by 1.0 percent)
These are statistics from the Current Employment Statistics (CES) data set, sometimes called payroll data.
These are two different sets of data. One shows employment rising, and one shows it declining. The difference comes from the fact that one set of data comes from households, and the other from employers. For a full explanation of the data and how there can be these differences, see Visualization: Metro area employment and unemployment.
The important thing is that Mayor Longwell said, in a roundabout way, that there are plenty of jobs in Wichita, and there are not enough workers to fill them.
If there are not enough workers in Wichita, it’s because the labor force (the number of people working plus those looking for work) shrank over the time period the mayor mentioned. That’s why there are not enough people to meet Wichita’s job growth (such as it is).
And while the number of jobs in Wichita rose in the employer survey, it rose by 1.0 percent over three years. The same statistic for the entire United States rose by 5.1 percent over the same period. This doesn’t seem like much of an accomplishment, Wichita growing jobs at a rate one-fifth of the nation.
In the first quarter of 2018, the Kansas economy grew at the annual rate of 0.5 percent in real terms, slowing from the previous quarter.
In the first quarter of 2018, the Kansas economy grew at the annual rate of 0.5 percent in real (inflation-adjusted) dollars, according to statistics released today by Bureau of Economic Analysis, a division of the United States Department of Commerce. GDP for the quarter was at the annual rate of $161,551 million.
This is a decline in the rate of growth from the fourth quarter of 2017, when the rate was 2.3 percent.
Click for larger.The first quarter numbers put Kansas in 47th position among the states, with only Arkansas, Idaho, and North Dakota posting lower numbers. Quarterly GDP can be volatile, as shown in the nearby chart.
For Kansas, industries that differed markedly from the state average include:
Agriculture, forestry, fishing, and hunting, down by 1.08 percent.
Wholesale trade, down by 0.13 percent.
Management of companies and enterprises, up by 0.07 percent.
Administrative and support and waste management and remediation services, unchanged.
Educational services, up by 0.01 percent.
Arts, entertainment, and recreation, down by 0.03 percent.
Accomodation and food services, down by 0.03 percent.
For June 2018, more jobs in Kansas, and a nearly unchanged labor force. Wichita jobs also rose.
Data released this week from the Bureau of Labor Statistics, part of the United States Department of Labor, shows an improving jobs picture for Kansas in June 2018.
Over the year (June 2017 to June 2018), the Kansas labor force is down slightly, while up slightly over the past three months. These changes are small, all being in the range of 0.1 percent.
The number of unemployed persons continues to fall. The unemployment rate remains at 3.4 percent.
Click for larger.
The number of Kansas nonfarm jobs for June 2018 rose by 1.8 percent over last June, adding 24,800 jobs. This is using seasonally adjusted data, and the non-adjusted figure is larger at 30,900.
Click for larger.
This release also provided some data for metropolitan areas. For Wichita, here are employees on nonfarm payrolls, not seasonally adjusted
June 2017: 294,900
May 2018: 300,600
June 2018: 297,900 (up 3,000 jobs, or 1.0 percent over the year)
Comparing May 2018 to June 2018 isn’t meaningful using this data, as it is not adjusted for seasonality.
