LOUISVILLE, Ky. (WDRB) – According to the Kentucky Cabinet for Education and Workforce Development, the state's unemployment rate was at 4 percent in March, the lowest since 1976.
Growth in tech companies such as the Louisville-based internet marketing firm El Toro is one reason why. It is one of the fastest-growing tech companies in the country from a half-dozen employees less than five years ago, to 90 today. And there are plans to double in size.
"We'll add 40 or 50 employees this coming year which is another pretty aggressive hiring clip for us," said El Toro President and CEO Stacy Griggs.
Companies such as El Toro reflect the growth of Kentucky's economy.
"Almost every employer that we're working with in this region is growing," said Mike Gritton, executive director of Kentuckiana Works.
Gritton said Louisville is in the midst of a perfect storm, with a number of industries all growing at the same time.
"You've got healthcare, IT, manufacturing, construction, and then all of that construction is partly around retail, hospitality, restaurants because of the big bourbon and tourism economy," said Gritton.
The growth is generally seen throughout the state with the unemployment rate dropping from 5.1 percent in 2016 to 4.9 percent last year.
Dr. Mike Clark, associate director of the Center for Business and Economic Research at the University of Kentucky, told WDRB News policy changes such as "right-to-work" may help, but are not the main reasons for last year’s growth.
He said state-level changes may make Kentucky more attractive to some businesses, but the state's unemployment rate is more closely tied to changes in the national economy.
"For Kentucky, the main driver of the economy is going to be the national economy," said Dr. Mike Clark, associate director of the Center for Business and Economic Research at the University of Kentucky. "As the national economy goes up or down, Kentucky is going to follow along with that."
While the number of available jobs is growing, paychecks are not keeping pace. Personal income in Kentucky rose just 1.6 percent last year according to the U.S. Bureau for Economic Analysis. That is well behind the national rate of 3.1 percent.
"The challenge for us is many of the companies that are growing, are growing in sectors like the pick-and-pack warehouse where we're happy to have the work, but there isn't much of a career opportunity or career ladder for people in those jobs," said Gritton.
But if the economy continues to grow, workers may become more scarce, leading to a rise in wages and/or benefits.
"So the good news there is, the market does work over time. And in order to attract more people in, you're going to have to pay them a little better," Gritton said.
Stacy Griggs said he learned a long time ago that his company had to work hard to hire good talent.
"You have to do things to 'A,' make it attractive for employees to come to work for you, and 'B,'' keep the employees that you've got happy," he said.
Economists said the challenge for policy-makers is to extend the job growth into areas such as eastern Kentucky and west Louisville where unemployment is still a major problem.
For a breakdown of Kentucky's unemployment rate by county, click here.
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