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ECONOMIC OVERVIEW

ECONOMIC OVERVIEW. Janet Kelly Urban Studies Institute University of Louisville. Recovery. Every four to six years we experience an economic slowdown The current bull market is in its fourth year CBO predicts real GDP growth at about 2.5% Business profits up over 7% from a year ago

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ECONOMIC OVERVIEW

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  1. ECONOMIC OVERVIEW Janet KellyUrban Studies InstituteUniversity of Louisville

  2. Recovery • Every four to six years we experience an economic slowdown • The current bull market is in its fourth year • CBO predicts real GDP growth at about 2.5% • Business profits up over 7% from a year ago • Auto sales and homebuilding leading the expansion • Unemployment will remain near 8%

  3. Unemployment in the Louisville Economy • New USI research report • usi.louisville.edu • Structural factors • Substitute technology for workers • Skills mismatch • Cyclical factors • Stimulus too timid • Aggregate demand remains sluggish

  4. Labor Market Distortions - Demand • Persistent high unemployment may lead employers to believe it is a “buyer’s market” • Seek perfect worker • Inflate qualifications • Offer below market wage rates • Discriminate against long term unemployed • Evidence that unemployed over six months significantly reduces likelihood of being hired

  5. Labor Market Distortions - Supply • Unemployed workers may have unrealistic expectations about achieving the same wages they enjoyed prior to the recession • Extension of unemployment benefits and expansion of assistance programs raised the reservation wage • Job search delayed until recovery • Months waiting reduced attractiveness to employers • House lock, making relocation difficult

  6. 2012 Jefferson County Employment by Age

  7. 2012 Jefferson County Employment by Race and/or Ethnicity Source: ACS 1 Year Estimates, US Census Bureau

  8. 2012 Jefferson County Employment by Educational Attainment

  9. 2012 Unemployment by Educational Attainment Source: ACS 1 Year Estimates, US Census Bureau

  10. Concluding Thoughts • Unemployment is not a number • Age, race and educational attainment shows the difference • Education gap affects prosperity now • More jobs than workers with a Bachelor's degree or higher • More workers than jobs in all lesser education categories • Education gap will drive local economy

  11. THANK YOU janet.kelly@louisville.edu 502-852-2435

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