Call to Order and Roll Call
The 2nd meeting of the Subcommittee on Rural Issues of the Interim Joint Committee on Agriculture was held on Wednesday, November 14, 2012, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Mike Denham, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Vernie McGaha, Co-Chair; Representative Mike Denham, Co-Chair; Senators Joe Bowen, David Givens, Paul Hornback, and Ken Winters; Representatives John "Bam" Carney, C.B. Embry Jr., Kim King, Tom McKee, Terry Mills, Bart Rowland and Steven Rudy.
Guests: Ron Couch, Director of Research and Statistics, Kentucky Education and Workforce Development Cabinet and Dr. Alison Davis, Director, Community and Economic Development Initiative of Kentucky.
LRC Staff: Tanya Monsanto, Stefan Kasacavage, Kelly Ludwig, and Susan Spoonamore, Committee Assistant.
The October 10, 2012 minutes were approved by voice vote, without objection, upon motion made by Representative Rudy and second by Senator McGaha.
Discussion on Population Shift and its Effects on Rural Issues
Mr. Ron Crouch, Director of Research and Statistics, Kentucky Education and Workforce Development Cabinet, stated that the face of Kentucky and its rural areas, as well as America, is changing through diversity and longevity. By 2050, it is projected that the world population under 25 years of age will have stopped growing. After 2050, all population growth will be in the 45 or above age bracket. In five to ten years, the world will see a significant increase in the aging population. The projected increase in the aging population will cause major issues for Medicaid and social security funding. The northeast and midwest are in a major population decline. If the current trends continue, California, Arizona, Texas, and Nevada will be the new Appalachia. The southeast, including Kentucky and its rural areas, have major potential to do well if the right investments are made. Kentucky is fortunate to have an abundance of water because water may become the new oil in the future.
Mr. Crouch stated that, contrary to popular belief, many people are staying in rural areas. The only thing that has changed demographically is that families have fewer children. The trend shows a decline in the younger population of workers, which means that the United States will have to re-tool and retrain the older workforce.
Mr. Crouch pointed out that, according to Kentucky’s 2010 Census, the fastest growing population under 18 years of age was minority and mostly Hispanic. In some counties, the largest employer is the health care industry. Kentucky has lost some manufacturing due to automated equipment. A challenge for rural Kentucky is dealing with a two-tier wage system. New workers are making less than the older workers resulting in an increase in use of food stamps. Another challenge is that 42 percent of children are born to unwed mothers who are mainly in their twenties. Women are investing in education, but men are not. In Kentucky, seven percent of males are less likely to graduate from high school than females.
In response to Representative Denham’s questions, Mr. Crouch stated that the world population was not growing due to better education, medical care, and urbanization. In the past, children were considered an economic asset. By 2050, the number of children will start declining in raw numbers. The reason for the population increase in the Golden Triangle is due to access to interstates. Most Kentucky counties are still gaining population as opposed to a lot of other states.
In response to Senator Givens’ questions, Mr. Crouch stated that the last ten years showed an increase of employment in the government sector due mainly to the hiring of additional policemen and firefighters in local government. Data for 2012 shows that the public sector is losing employment and the private sector is gaining. If Kentucky makes the right investments in the Hispanic population, infrastructure, water, and a skilled educated population, then the economic future will look good. One other area of concern was people running out of money before running out of life.
In response to Representative Carney’s questions, Mr. Crouch said there was not a way to track the cost of living in Kentucky counties. Having technical schools around the state would be helpful in training skilled workers, along with training for electricians, plumbers, and mechanics.
In response to Representative Rudy, Mr. Crouch said that one of reasons that the population had been declining in rural areas such as Fulton and Hickman was because farming had become automated. Farms were not hiring additional help.
In response to Senator Hornback, Mr. Crouch said that young male students were not applying themselves. Jobs are getting smarter, and Kentucky needs young males to be more skilled and educated.
In response to Senator Bowen’s question, Mr. Crouch said he did not know the exact amount of shoreline that Kentucky has, but it will be important to keep the water clean so that it will be a valuable asset.
Discussion on Jobs in Rural Kentucky
Dr. Alison Davis, Community and Economic Development Initiative of Kentucky (CEDIK), College of Agriculture, University of Kentucky, stated that CEDIK works with communities and organizations across Kentucky. CEDIK provides support to all counties for economic and community development. According to a recent report, rural Kentucky is lagging behind all of the southern states in per capita income and high poverty levels. In eastern Kentucky, substance abuse is insurmountable and makes it almost impossible to implement any type of economic development strategy. There are jobs available in eastern Kentucky; however, employers are unable to hire workers due to the prevalence of substance abuse. Another issue for Kentucky is Social Security and SSI. Incentives are needed to induce people to work. Many families will say that they do better financially by not working. She explained the differences between rural and urban Kentucky. It is documented that the rural areas are losing people to work in urban areas. As examples, she said that Bath County has a population of 4,100 and, of those, 875 people are staying in the county to work. In Owsley County, only 1.3 percent of the residents are able to find jobs, and only 17 people are making $40,000 a year or more.
Dr. Davis said that between 2000 and 2009, Kentucky lost 21 percent from non-resident companies. Self-employment increased by 151 percent. Manufacturing jobs are coming back, but there is a large demand for professional services and skilled and trade jobs. Kentucky has not grown as much as it should have in healthcare jobs and growing those jobs in the rural area is essential to economic growth. The largest growth in jobs comes from businesses that currently exist in Kentucky. Overall, job growth has declined, consistent with the recession. Kentucky should focus on expanding businesses and a support system for entrepreneurs and self-employed.
Ms. Davis explained that many states have invested in economic gardening programs. These programs embrace strategies to grow existing businesses who have survived the first year. In Littleton, Colorado, through economic gardening, the city doubled jobs from 15,000 to 34,000.
CEDIK surveyed 1,200 of the fastest growing manufacturers and asked what their top incentives were in considering locating to Kentucky. The top answers were education, a good healthcare system, and a skilled labor force. In talking with physicians who were leaving the area, the major complaint was lack of entertainment and jobs.
Ms. Davis noted that the website for CEDIK contained information regarding agriculture, healthcare, and overall economic welfare for all counties.
In response to Representative Denham’s questions Ms. Davis said that a regional coalition in Kentucky is possible. Communities are slowly recognizing the benefits from sharing some information. There are still concerns on how to share water rights and taxes. There is not enough information available yet to say if House Bill 1 is making a difference in eastern Kentucky.
In response to Senator Givens, Ms. Davis said that there were several reasons for the closing of Goodyear in Union City, Tennessee. There had been a decline in the population affecting the number of skilled workers available. Workers at the Goodyear plant made excellent money, but there were no extra amenities for them to continue living in the area. When Goodyear announced it was leaving the area, there were opportunities that should have happened. The small business development centers should have been there working to get the labor force re-tooled so people could have developed their own business ventures.
There being no further business, the meeting adjourned.