Kansas Employment below Peak

and declining.

Figure 1: Log nonfarm payroll employment for Missouri (blue), Kansas (red), and US (black), seasonally adjusted, 2011M01=0. Source: BLS, and author’s calculations.

45 thoughts on “Kansas Employment below Peak

  1. PeakTrader

    Kansas unemployment rate lowest since 2000:


    The liberal media, along with other liberals, jump to the conclusion tax cuts are responsible for slower growth when it could be other factors. For example:

    “Kansas has broken the state record for new business formations every year since the tax cuts went into effect, even though startups have decreased nationwide since the Great Recession. All of this happened despite tremendous economic headwinds, particularly in falling commodity prices and exports, slowing oil and natural-gas markets, and falling manufacturing.”

    1. Lee

      C’mon dude, you gotta try harder than that. Guess that’s hard to do with that chart staring you in the face.

      1. PeakTrader

        I’m sure, you need some hard work.

        Kansas seems to be at full employment, since its unemployment rate is 3.7%.

        1. noneconomist

          In April 2007 according to BLS data, (data.bls.gov) the Kansas labor force totaled 1.48 million. In April 2017, the Kansas labor force totaled 1.48 million. The unemployment rate was 4.2%
          In May, 2012, the month Brownback’s tax cuts were passed, the Kansas labor forced totaled 1.48 million. The unemployment rate was 5.8%
          Good news: more Kansans are employed than in 2013. Bad news: that “shot of adrenaline” into the heart of the Kansas economy and the pro-growth bonanza promised by Brownback has yet to materialize.

    2. 2slugbaits

      PeakTrader Obviously you never took an undergraduate (never mind a graduate) level course in econometrics, otherwise you would understand the concept of fixed effects. The fact that the Kansas unemployment rate is lower than the national average is irrelevant. Pity you don’t understand basic econometrics.

      Curious that you didn’t want to advertise the source of that long quote about new business formations. So let me help you out. It was….ready for it? That bastion of intellectual integrity, “The National Review”:


      So “The National Review” and “US News” are your idea of serious economic analysis??? Really? And what about those supposed “headwinds”? Notice that Menzie’s graph shows Missouri. I’ve been to Kansas and Missouri more times than I can count. The only part of the Kansas economy that isn’t on life support is the part near Missouri and Kansas City. So why the large and growing gap between the two states?

      1. PeakTrader

        2slugbaits, obviously, you’re wrong. Econometrics was required for both undergrad and grad Econ. However, my fields of specialty were international trade and money and central banking. Anyway, I understand fixed effects. What you don’t understand is it’s harder to move from full employment to beyond full employment than moving to full employment. And, Kansas and Missouri economies are not the same.

        1. 2slugbaits

          PeakTrader Your “explanation” has a number of problems. First, Menzie’s chart clearly shows a decline in total employment. That ought to raise some red flags about the unemployment rate, which is after all a ratio of employment to total workforce. Then there’s the problem with average hourly weekly hours, which have drifted downward ever since Brownback took office. Go check the FRED data. Weekly hours worked are actually less than they were during the Great Recession. That’s a little hard to square with your claim of a vigorous labor market. Next let’s look at broader measures of unemployment…say U6, which measures those working less than 35 hours per week but would like to work more, but can’t for economic reasons. How does Kansas compares to her near neighbors averaging over the last year?

          Kansas: 8.1%
          Missouri: 7.8%
          Nebraska: 6.2%
          Iowa: 7.1%
          Colorado: 6.9%
          Oklahoma: 8.8%
          Arkansas: 7.2%

          Well…the good news is that Kansas is doing better than Oklahoma. Yippee!!!

          So much for your argument about it being hard to move from full employment to fuller employment. Kansas ain’t even close to soaking up its available workforce. Lots of folks working marginal jobs and you think that’s a success story. Unbelievable. Seriously, have you been to Kansas recently? I go there often. In fact, I’m supposed to be there in mid-June for some family reunion thing. The good news is that I have an excuse…it conflicts with some meetings I have with the commander at one of the real armpits of the Army. It’s like choosing hemlock or arsenic. Kansas is a hellhole once you get outside of the KC area and the two big college towns.

  2. joseph

    PeakTrader: “Kansas has broken the state record for new business formations every year since the tax cuts went into effect, even though startups have decreased nationwide since the Great Recession.”

    Most of those “new” business formations are just existing companies who have restructured themselves as pass-through entities to take advantage to Brownback’s infamous LLC tax exemption. These aren’t new companies. Just old companies exploiting a new tax loophole. These new tax avoidance business entities don’t create a single new job. They just create a crater in the state budget.

    1. PeakTrader

      Joseph, can you present or cite the data?

      When it’s cheaper to start or expand a business, there may be more business start-ups and expansions. More money can be plowed-back into the business. At least, employees can be paid more.

    2. DeDude

      Exactly – if there was such an explosion in truly NEW businesses then there should also be an associated increase in people having jobs. The critical parameter is jobs not the number of registered businesses. The BS about it being hard because everybody are already employed is presuming that people cannot move into Kansas and that is just not true. If there was a huge demand for employees from all these “new” businesses then you would both see increased wages and also migration of workers from other states – and finally a substantial increase in total employment. That is how economic growth work – and none of that has been observed in Kansas.

      Peak trader is not pursuing the truth about what is happening in Kansas – but rather pushing a specific narrative, desperately trying to find “evidence” in favor of it. And yes desperate is the word, because you got to be desperate to go to National Review for your information.

      1. dilbert dogbert

        I was reading these in the NYT and wondering:
        if PT was an unpaid member.
        Nah!! Couldn’t be.

      2. dilbert dogbert

        I went to Google to look at Kansas City. Interesting. Maybe folks in KC Kansas are commuting to jobs in KC Mo? If business was booming in Kansas wouldn’t the flow be in the other direction?

      3. PeakTrader

        Dedude, if there was only one economic force, that would be true. However, there are many forces – positive and negative – resulting in a net effect. Tax cuts, that benefit individuals and businesses, may offset a collapse in commodity prices, in agriculture and fossil fuels, declining government jobs, falling exports and manufacturing, etc.. The liberal media provides a lopsided, ignorant, and negative view that saturates the news.

        1. 2slugbaits

          PeakTrader Your arguments are getting more and more bizarre. Your posts remind me of people 500 years ago trying to salvage the Ptolemaic system with evermore epi-cycles. At this point you’re just winging it. Throwing out all kinds of arguments hoping that something sticks. You’ve invested so much pride and intellectual energy into defending these godawful GOP & ALEC policies that it’s become a matter of just trying to save face by not admitting that you’re wrong. You’re just digging a deeper hole. Give it up.

          Commodity prices didn’t just affect Kansas, but yet Kansas has fared the worst. Changes in exports and manufacturing affected all states, not just Kansas. Sorry, but no special pleading is allowed. What makes Kansas (more or less) unique is Brownback’s misguided decision to give supply side nonsense one more try. And guess what? We’re seeing pretty much the same thing play out in Wisconsin, which seems hell bent on following the Kansas path to economic stagnation.

          Brownback was moron when he was a senator, and he didn’t get any smarter as a governor. Let’s hope his stay at the Vatican will precipitate a miracle and he grows a brain.

          1. PeakTrader

            When you compare states, adjustments need to be made for apples to apples comparisons.

        2. DeDude

          Aha -the magic *. When the data doesn’t support your narrative then you invent some undocumented invisible force that explain why it is the data, and not your narrative, that is wrong. Sort of funny how those declining government jobs become one of your lifelines – just unfortunate that it was one of the features of Brownbacks right wing policy, not a bug. In order to afford all those tax cuts for the investor class (so they could invest in non-productive assets) the GOPsters cut government jobs. And, surprise, it turned out that those were consumers who no longer could consume as much.

      4. PeakTrader

        And, it’s easier to take up slack in the labor market than to create more strain moving beyond full employment.

        1. noneconomist

          The original propaganda re: the tax cuts involved growth. When signed into law into 2012, Brownback’s hyperbole included giving the Kansas economy “a shot of adrenaline” and “This is the best package in America based on what any state is doing to be pro growth.”
          One forecast made then was Kansas creating 20,000+ NEW JOBS beyond those normally created.
          Five years later, that clearly has not been the case, whether you follow the slings and arrows aimed by the bad ol’ liberal media or the data provided by various economists, researchers, et. al.
          Had this experiment( Brownback’s own description) been that wildly successful, Kansas would not have resorted to budget balancing by raising other taxes (sales and tobacco foremost) to make up for income tax shortfalls.
          And news that Kansas’ highest paid public employee–KU basketball coach Bill Self–pays very little in state income tax because it enables those who can do so–including many professionals– to forgo taxes on salary and focus taxes on “profits” instead.

  3. Phil

    When people lose their jobs and there are no jobs available and no safety net they either leave the state or start a business in a desperate attempt to make money.
    That is what has happened in Kansas.
    And starting a business with no capital is basically self-employment with no employees at below minimum wage in order to survive.
    All while the billionaires avoid any and all taxes while enjoying the benefits of government legal protection and infrastructure.
    Without the minimal Federal government safety net Kansas, and other red states, would be in a state of civil unrest.
    That is the vision of the future of the US by the Republican party of today.

  4. joseph

    PeakTrader: “When it’s cheaper to start or expand a business, there may be more business start-ups and expansions. More money can be plowed-back into the business. At least, employees can be paid more.”

    PeakTrader again demonstrates he is a complete idiot. I’m guessing that he has worked for a wage his entire life and knows absolutely nothing about starting or running a business or else he wouldn’t speak in complete ignorance.

    Cutting taxes doesn’t make it easier to start a business. A new business has little or no profit so pays little or no taxes. Almost all cash flow is reinvested in startup costs so is untaxed.

    Cutting taxes doesn’t provide more money to expand a business because any money used to expand the business is untaxed as a business expense. In fact, the higher the tax rate, the greater the incentive to reinvest because any money reinvested is untaxed. When you cut the tax rate, the owner of the business is more likely to take money out of the business and spend it on himself rather that reinvest it to reduce taxes.

    Cutting taxes doesn’t provide more money for employees. Every dollar spent on employees is already untaxed. You want to cut your taxes — pay your employees more.

    It is just astounding the complete ignorance PeakTrader has about running a business or how business taxes work. From the juvenile tone of his statements, I still think it is more likely he is living in his parents’ basement than his story about studying economics and working in banking. No adult could be that dumb.

    1. Timothy Hughbanks

      What do you bet the idiot will be back in another comment section soon repeating the same stupid bromides?

      1. PeakTrader

        There’s no idiot and stupid bromides. Just someone who can’t respond to comments, certainly not in a rational way, and name calling is all he has.

    2. PeakTrader

      Joseph, I’m sure, you really believe when it’s more expensive to start and expand a business, there will be more business start-ups and expansions. And, you really believe more business tax revenue to the givernment means more money plowed back into businesses and higher wages.

      Here’s what the tax foundation concluded:

      “One of the main goals of fundamental tax reform is to make U.S. businesses more competitive and to increase economic growth. This requires a reduction in taxes on businesses and investment. Most attention is given to traditional C corporations because they face high tax burdens by international standards and account for a large amount of economic activity. As a result, less attention has been given to pass-through businesses. Since pass-through businesses now account for more than half of the business income and employment in the United States, any business tax reform needs to address the individual income tax code as well as the corporate income tax code.”


      And, you didn’t provide any data I asked for. Instead, all I got was a temper tantrum, because you couldn’t respond to my statement and had to create a new one.

  5. joseph

    PeakTrader: “I’m sure, you really believe when it’s more expensive to start and expand a business, there will be more business start-ups and expansions.”

    PeakTrader, you are a child who has never started a business. I have started several and worked in the startup of others. When someone is starting a business, the very last thing they worry about is taxes. The very last. Taxes have zero influence on starting a business because the first thing a business struggles with is making a profit, any profit. There is near zero tax on most startups because they have little or no profit to tax, often for many years.

    So your belief that taxes make business startups too expensive portrays a profound ignorance about how businesses work and how taxes work.

    PeakTrader: “More money can be plowed-back into the business. At least, employees can be paid more.”

    This is perhaps the most blatantly ignorant of your statements. Money “plowed back” into a business is already tax-free. Money paid to employees is already tax-free. You know how to have zero taxes, regardless of the tax rate? Take all of your profit and reinvest it in your business — or raise the wages of your employees. High tax rates don’t inhibit reinvestment or higher wages. Just the opposite, high tax rates encourage reinvestment because that is the easiest way to reduce your taxes.

    If you don’t even understand how taxes work, you are wasting your breath commenting here. You read Atlas Shrugged and a couple of posts from Breitbart and you think you know something about business. It is obvious from your ignorant statements here you don’t know the first thing about running a business because you have never run one.

    And don’t even bother quoting the Tax Foundation. They are a right wing hack organization that never saw a tax they didn’t like. Saying the Tax Foundation hates taxes is about as informative as saying that Donald Trump hates Mexicans. It is hardly a revelation and provides zero enlightenment.

  6. PeakTrader

    Joseph doesn’t understand businesses are in business to make money and avoid bankruptcy. Business owners work hard, often earn little income, and can pay a high tax rate on that income. He completely ignores concepts, like expectations, and doesn’t really respond to your comments. Instead, he responds to comments you didn’t make and gives a view expected from a simpleton. Then, criticizes you for his own ignorance, which is extensive.

    1. baffling

      peak, you sound like the student who listened to half the lectures in your finance and economics classes, but did not understand a single concept that was discussed. you repeat the phrases you heard in the hopes that an authoritative tone will conceal your lack of understanding of the ideas.

      joseph and 2slugbaits, among others, have demonstrated very clearly the flaws in your ideas of startups, taxes and small business tax and growth. you seem to have learned absolutely nothing from them, which is a shame. you simply repeat the same old lines in every post menzie provides. its too bad you spend so much time on this blog and absorb so little information. a waste, really.

      1. PeakTrader

        Baffling, that’s just more nonsense.

        All you do is play games to waste people’s time.

        1. baffling

          at least i am not an unemployable banker who demonstrates his ineptitude on an econ blog.

          1. baffling

            well peak, you are the only fool i know who thinks successful economic policy occurs with a dropping unemployment rate and decreasing number of workers in the state. think about that. you claim to have a pro growth agenda. the number of workers has decreased. and you consider this a shining success of conservative economic policy. you spout nonsense.

  7. Steven Kopits

    The data does not support the assertion, when farm labor is included.

    Kansas Civilian Labor Force
    Nov 1,479.5
    Dec 1,478.8
    Jan 1,479.4
    Feb 1,481.8
    Mar 1,484.6
    Apr 1,487.3

    Nov 1,415.7
    Dec 1,415.3
    Jan 1,418.2
    Feb 1,422.9
    Mar 1,428.7
    Apr 1,432.5

    Kansas has been adding about 4,000 jobs a month since Dec.


    1. Steven Kopits

      Since November,

      the civilian labor force in Kansas has been growing at the pace of 1,560 persons / month

      the number of jobs have increased at the pace of 3,360 jobs / month

      job growth has outpaced labor force growth by 1,800 jobs / month,

      leading the unemployment rate to fall from 4.3% to 3.7%, with 55,000 persons unemployed in a total labor force pool of 1,487,0000.

    2. Menzie Chinn Post author

      Steve Kopits: As I have noted numerous times, at the state level, the civilian employment numbers are particularly imprecise [1], and are substantially revised over time.

      1. Steven Kopits

        If you are telling me you’re smarter than BLS, go ahead.

        If you’re not, then your thesis is materially misleading.

      2. Steven Kopits

        Let me also comment more broadly on the matter of credibility.

        You may think that you are advancing liberal causes with attacks on Kansas governance. However, when I revert to the actual statistics, and see your claims are at best misleading, it calls into question your motivation and credibility. And this is the more so when we extend these posts to a longer stretch, with memories of the joys of ‘good’ Minnesota v ‘bad’ Wisconsin.

        I am frankly accustomed to your spin by now, but conservatives will not draw the lesson you intend. Rather than question their ideological or policy orientations, they will take away the lesson that the left is well prepared to lie to them. And I mean this more broadly, not just to you specifically, but to the likes of CNN, MSNBC, the NYT and NPR, as well.

        The left has no monopoly on spin, and Fox has become all but unwatchable when they are in a mood to slavishly support the President in the face of the most patent transgressions. Hence the surge in MSNBC ratings as those of us in the middle feel around for someone to give it to us straight, or at least straight-ish.

        Nevertheless, the net result of all this partisanship is the implosion of belief in the press and any number of analysts as detached observers of the political scene. No one — or very few — retain credibility in this world.

        I do not know whether this is compatible with democracy in the longer run.

        1. Menzie Chinn Post author

          Steven Kopits: Geez. I’m just saying don’t rely heavily on series with known large degrees of imprecision and subject to very big revisions. That’s partisan? I mean, I don’t start skipping to the household series when it shows a big decline in Wisconsin employment — I pretty much focus on the establishment series. Isn’t that what a good analyst should do?

          1. Steven Kopits

            You mean, how would I do it?

            I would look at the major revisions resulting from Brownback / Walker policies and see what effects these could plausibly have, if I were going to play a partisan game.

            And, more to the point, I would concentrate on interesting states, eg,

            – how did Colorado become No. 1?
            – how did Texas come in dead last in unemployment rate improvement?
            – why has West Virginia improved so much, and why is it improving so much faster than California, even though they both currently have the same unemployment rate?
            – why has the comparison between MN and Wisconsin deteriorated so much in Wisconsin’s favor?
            – why is unemployment so comparatively high across much of the Deep South?
            – is there any hope for New Mexico?

            Those are the topics of interest to me.

            I stand firmly behind my comments on credibility

  8. Steven Kopits

    And how about that Wisconsin

    Unemployment rates (rank)

    Wisconsin: 3.1% (tie 8th) / Year ago 4.1% (15th)
    Kansas: 3.7% (tie 15th) / Year ago 4.1% (17th)
    Minnesota: 3.8% (tie 17th) / Year ago 3.8% (12th)

    Much maligned Walker Wisconsin has done very well, dropping the unemployment rate by 1 pp over the last year and moving up in rank from 15th to 8th.

    Kansas has done reasonably well, unemployment rate down 0.4 pp, rank improved to 15th from 17th.

    Minnesota, oh Minnesota of the grand safety net, zero gain in unemployment rate over the last year, falling in rank from 12th to 17th.

  9. joseph

    PeakTrader: “Business owners work hard, often earn little income, and can pay a high tax rate on that income.”

    Good grief! Have you ever heard anything so dumb — business owners have little income and simultaneously have high tax rates!

    Business owners who have little income likely have zero or close to zero income taxes. Pass-through business owners don’t have burdensome tax rates. They have exactly the same tax rates as the employees that work for them. Sheesh, you know nothing about taxes!

    It’s quite obvious that you know nothing about running a business. It is quite obvious that you have never run a business. But that doesn’t keep you from ignorantly pontificating about a subject you know nothing about. It’s embarrassing.

  10. PeakTrader

    Obviously, you didn’t read or couldn’t understand the link I provided for you above. For example:

    “Example 1–Madison Inc. is an S corporation owned 50% each by Fred Flood and Sue Ponds. Fred and Sue don’t take a salary (more on that later). Madison has sales of $310,000 and deductible expenses of $194,000 for the year. That’s $116,000 in taxable income that’s passed through to the shareholders. Thus, Fred and Sue each report $58,000 on their personal income tax returns. Fred’s married and has taxable income (his wife’s salary plus dividends and interest less itemized deductions for taxes, mortgage interest, etc. and personal exemptions) of $148,000. Fred adds the $58,000 in S corporation income to his regular taxable income to arrive at total taxable income of $191,000 and computes the tax. Looking at the table at the end of the article for 2013 you’ll see that for a married taxpayer with taxable income between $146,400 and $223,050 is taxed at 28%. Since all of the S corporation income falls in this range, Fred and his wife pay $16,240 ($58,000 X 0.28) in federal taxes on the earnings from the S corporation.”

  11. joseph

    So what is your point? That a household that makes over $200,000 a year should pay no tax?

    And of course it is rather arbitrary to claim that the $58,000 in business income is taxed at 28%. You could just as easily say that the $58K is taxed at 15% and it is his wife’s salary that is taxed at 28%.

    If you look at their entire income and total tax, their effective tax rate is only 25%. Hardly what anyone would call onerous. They are paying no more tax than any other household — not one dollar more than any other household with that level of income. So what’s the beef?

    Your statement that a business owner that has little income has high taxes is one of the dumbest things I’ve ever heard. You don’t seem to understand how taxes for businesses works at all.

    But the point is that in Kansas, due to the Brownback LLC loophole, this household earns $58,000 of business income absolutely free of state income taxes, while a wage earner getting $58,000 pays state income taxes. You consider that to be fair?

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