Unemployment drops to 3.2 percent in Kansas

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Unemployment in Kansas dropped to 3.2 percent in August after several months at 3.3 percent. While that number is encouraging, there is a downside. Businesses are having trouble finding qualified workers.

"A lot of people think unemployment is bad," said Jeremy Hill, Director of the Center for Economic Development and Business Research at Wichita State University. "Not necessarily."

Hill said unemployment functions like oil in an economy's engine, as a way for workers to transition from one job to another. 

"There's a transition period," Hill said. "You leave one job, go to the next, and you have a few months to get those jobs. Once that gets so small, it gets really tight and difficult for the entire economy to function."

About 1,000 people who were unemployed in Kansas found jobs in the August report. But, Hill said that isn't the only reason unemployment is down; around 1,500 new workers entered the Kansas workforce. Those 1,500 could come from different areas.

"One solution is, people who were not looking for a job, finally said 'This is the time for me to enter,'" Hill said. "And/or, we had people move from another state into this market, because they found another opportunity in the state."

Hill said the tight labor market in Kansas has economists at the national level puzzled over a certain question:

"If we're that short on labor, where are the wages?" 

Hill said the low unemployment rate is good news for households.

"You need that opportunity for a tightness in the labor market to get those wages up," Hill said. But, for employers, "A tight labor market means things are getting a little tight and getting more expensive. They need to start planning a little bit more. It'll be harder on them."

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