By John Cheves
Gov. Steve Beshear frequently credits himself with creating or retaining more than 19,500 Kentucky jobs, but some of those jobs don’t exist.
Hundreds of specific jobs that the Democratic governor identifies on his campaign Web site actually have not been created since the initial press releases went out, or they were partially offset by subsequent layoffs at the same companies, or they were announced under Ernie Fletcher, Beshear’s Republican predecessor.
For example, the Web site says “Steve Beshear worked with Worldcolor to create 135 new jobs” in Simpson County. It cites a 2010 state press release as its source. But the jobs never came to Worldcolor, a printer later bought by Quad/Graphics.
“The jobs pretty much have been put on hold,” plant manager Todd Ramsey said in a recent interview.
The Beshear Web site proclaims Lockheed Martin’s plan to create 224 jobs in Lexington, tied to $15 million in tax credits that Beshear announced. It does not mention at least 77 layoffs now underway at that defense contracting plant.
In Nelson County, the Web site says, “Steve Beshear worked with Flowers Food Bakery to bring 145 new jobs and $52 million investment.” But the company said in 2007, during the Fletcher administration, that it would build its next bakery in Harrodsburg and create those jobs. Beshear arrived two years later for the ribbon cutting.
Overall, nearly 86,000 more Kentuckians are jobless now than when Beshear took office, according to the U.S. Bureau of Labor Statistics. The state’s unemployment rate stood at 9.5 percent in August, up from 5.6 percent in December 2007.
The Beshear campaign defended its claims on Thursday.
“The numbers are accurate and we stand by them,” Beshear spokesman Matt Erwin said. “Companies have been approved for incentives to create 19,000 jobs and save 7,000 jobs. If they decide against creating or saving those jobs, or don’t live up to their commitment, they will not receive any incentive from the state.”
As for the jobless numbers, Erwin said the Beshear campaign uses employment numbers rather than unemployment numbers. According to the Bureau of Labor Statistics, Kentucky now has 13,531 fewer employed people than it did when Beshear took office. The bureau drops people from the labor pool count if they stop looking for work for 12 months.
Economists say worsening unemployment is not Beshear’s fault; it’s due to a struggling national economy. Most states have lost jobs. However, Beshear can’t take credit for jobs created on his watch anymore than he should accept blame for jobs lost, they said.
Employers add jobs when the economy is strong, not because of special tricks by the government, said Ken Troske, a University of Kentucky economist who studies the state’s economic development efforts.
“When you look at the data carefully, the government’s efforts at job creation are rather small in terms of success and rather expensive, whether it’s the federal stimulus package or state tax incentives,” Troske said.
In his campaign commercials, Beshear touts the state’s retooled tax-inventive system, which he and the legislature accomplished in 2009. More tax breaks now go to smaller, homegrown companies, compared to the previous model, which focused on wooing large factories away from other states — with mixed results.
“Beshear’s economic incentives are helping to keep people working in large and small businesses across Kentucky,” the narrator says in one of the governor’s campaign commercials.
It’s too early to know what impact the new tax incentives will have. Construction and expansion can take years. Kentucky approved $73.5 million in incentives in 2010, barely more than the $72.5 million it approved in 2008.
Troske said the tax incentive changes were “useful,” but companies still are more drawn to an educated workforce and good infrastructure, such as highways, ports and airports. Those are amenities that require decades to develop, not a single four-year term, he said. Others agreed with that assessment.
“It is the role of government to take the long view. Investing in schools, in educated communities, is a part of that. Tax incentives are not,” said Justin Maxson, president of the Mountain Association for Community Economic Development, a Berea nonprofit that assists small businesses in Appalachia.
In the meantime, Beshear’s shaky jobs claims are providing fodder for his opponents as he seeks re-election on Nov. 8. He faces Republican David Williams, the state Senate president, and independent Gatewood Gailbraith, a lawyer.
“Governor Beshear’s entire campaign is designed to cover up his abysmal record on job creation, and today’s news confirms that he will say anything to get elected,” Williams said Thursday. “As governor, Kentuckians will always get the truth from me about our economy.”
“His defense for the declining economic and job growth is that he was the victim of the national economic crisis,” said Dea Riley, Galbraith’s running mate. “Yet he did nothing to prepare, nor take appropriate steps to stabilize Kentucky’s economy.”