The jolly economists at Creighton University in Omaha continue to have good news for Kansas and the other Plains states. The Business Conditions Index which Creighton economist Ernie Gross creates and updates every month grew to 60.2 in May from 57.7 in April. Any number above 50 indicates a growing economy.
Prof. Gross’ survey also shows that Kansas and the other eight Plains states benefited from exports of farm commodities and manufactured goods, such as hydraulic hose, diplomas for graduates, braking equipment for trucks and trailers and chocolate candy.
The Kansas unemployment rate dropped a smidgen in April to 6.7 percent. That compares to a 9.8 percent federal rate. Kansas is better off because the farm sector is strong and the manufacturing sector is doing OK. Our employment would be stronger still if it weren’t for such stringent cutbacks in state spending.
Government employment has dropped significantly as budget cuts take hold. Continued erosion can be expected because of the sharp reduction in state aid to education. School districts have long since eliminated the “extras” and now must cut into the bone and muscle — a way of saying that smaller faculties and more kids in each classroom will be showing up across the state next fall.
Losing teachers will hit smaller communities like Moran, Humboldt and Iola hard because those to be laid off — or not hired, as the case may be — will be the young professionals who add so much to school faculties and to neighborhoods. And, just to talk dollars, because the incomes they bring to the economy are above average and will be missed.
To sum it up, the Plains economy is strong and getting stronger and the growth engine is the private sector. And that’s a switch. Over the years since World War II government has been out front as an employer. For the time being, it is shrinking rather than growing. Even the military has been trimmed a bit nationally even though it has grown significantly in Kansas.
The shrinking will stop or, at least, moderate. As our population continues to age, more people will be employed with tax dollars to minister to the elderly and government ranks will start growing again. And unless peace breaks out all over the world, the U.S. military will continue to employ millions of men and women.
In the meantime, today’s top challenge will be to re-start America’s economic engine. It will take a growth rate be-tween 4 and 5 percent to soak up today’s unemployed and provide jobs for the new generation of workers. That’s twice the current growth level.
How to ignite a new economic fire has escaped decision-makers in Europe and, goodness knows, Washington, D.C. Fiscal manipulation has been tried with tepid results: Taxes were cut dramatically; higher deficits and recession followed. Big time borrowing and spending helped stop the recession from becoming a depression but did not spark the growth anticipated.
Now budget cuts are being prescribed on the theory that smaller government will somehow create a bigger private sector. Millions of new college graduates searching for satisfying work eagerly await the result.
— Emerson Lynn, jr.
