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Economy Report
After recovering well from the economic recession of 2008, the world was significantly impacted from the COVID-19 pandemic. The economy is a primary topic of concern in the community because of the significant rise in inflation and its impact on the affordability of necessities. This section looks at current economic conditions and trends from the past 10 years to better understand how to strengthen the region and continue to make Kenton County a preferred place to live, work, and play.
Two major indicators of economic health are per capita income and median household income. Per capita shows the average income per person in a region. A high per capita income shows a strong economy and overall wealth. Historically, Kenton County’s per capita income has been the highest of the Northern Kentucky counties: Campbell, Boone and Kenton (Figure 1). Kenton County’s per capita income has historically fallen just shy of the United States and Cincinnati Metropolitan Statistical Area per capita income. Since 2011, Boone County has slowly grown to have the highest per capita income out of the Northern Kentucky counties until 2021. Campbell County has had a 59% increase in per capita income since 2010. As of 2021, Campbell County has the highest per capita income in Northern Kentucky with $38,404. Boone County has the second highest, $38,292.
The above figure shows the steady increase in per capita income since 2010 in 2021 inflation adjusted numbers. Nationally, per capita income has increased 38% since 2010. Kenton County, Boone County and the Cincinnati Metropolitan region have not met this increase with a 36%, 34% and 37% respectively. These trends are seen in the median household income as well. However, the United States falls below Northern Kentucky in this case.
Boone County has a significantly higher median household income than the rest of Northern Kentucky (Figure 2). This can be attributed to a smaller average household size and higher wages. Northern Kentucky has a higher median household income than the rest of the nation in 2021. This was not the case in 2010. The growth in income in Campbell County that was seen in the previous figure is seen here as well.
Poverty throughout Northern Kentucky has decreased, except in Kenton County where it has increased (Figure 3). Historically, since 1980, Kenton County has consistently had lower poverty rates than the national average and the Cincinnati Metro region. This trend has subsided going into the 2020s.
In line with historic trends, Northern Kentucky has followed the unemployment rates closely. Unemployment has reached historically low rates over the past few years. This can be attributed to a high number of job opportunities and increased income during the pandemic from stimulus packages. Figure 4 above shows the average unemployment rate for the year. It is important to note that during the peak of the Covid-19 pandemic, unemployment rates peaked.
Figure 5 shows the historic rates of unemployment by quarter. In quarter two of 2020, unemployment rose to 13%, the highest recorded since the 1920s great depression. With the anticipation of the predicted recession, unemployment is top of mind for many. Job loss is anticipated to be fewer than in prior recessions. As many firms, especially small businesses, are already understaffed.
Over the last ten years, Northern Kentucky has seen a significant increase in employment in a few industries. In Kenton County, the largest workforce increase was seen in the Warehousing and Storage industry with a 19.91% growth since 2011. This was the largest industry increase seen out of all Northern Kentucky counties. In Boone County, the Electrical Equipment and Appliance Manufacturing industry saw a 10% growth since 2011. Finally, in Campbell County, a 4% growth was seen in Data Processing, Hosting and Related Services.
With the growth in these industries, specialization has occurred in Northern Kentucky as well. This specialization is measured through a location quotient. Location quotient (LQ) is calculated by taking the industry share of the county and comparing it to the industry share of the nation. If a location quotient is greater than one, the industry is considered specialized. The higher the location quotient, the more specialized the county is in the particular industry.
Figure 6 shows the increase in employment in Kenton County in two industries: Support Activities for Transportation and Warehousing and Storage. This has led to a specialization in the county. The highest specialization for Kenton County is in Securities, Commodity Contracts, and Investments. Fidelity has a large corporate office in Covington, explaining the high specialization. In Boone County, the highest specialization is in the Air Transportation industry, as explained by the CVG airport. Despite the drop in specialization from 6.44 to 5.40 the industry has actually increased employment in Boone County. The reduction of specialization is due to the increase of employment in the industry throughout the nation. Campbell County is not as specialized compared to the other Northern Kentucky counties. The highest location quotient of 2.08 falls in the Rental and Leasing Services industry. Within the Cincinnati Metropolitan Statistical Area, no industries are significantly specialized. The highest location quotient for 2021 was 1.21 within the Paper manufacturing Industry. This can be attributed to the high specialization within Boone County, as part of Boone County is included in the Cincinnati MSA.
The table in the previous section showed specialization in warehousing and storage, so it should be expected that more warehousing jobs will come to the County. Warehousing can offer employment for a large portion of a population, but the wages may not be as high as others, which is simply a result of the roles at warehouses.
Due to this, the manufacturing industry is a bigger target for the County. While the previous table did not show this, Kenton County does also specialize in many manufacturing realms, such as food manufacturing (2.59), chemical manufacturing (1.38), machinery manufacturing (2.43), and electrical equipment & appliance manufacturing (2.35). Recall back that the higher the number is, the more specialization Kenton County has in that specific industry. Considering this information, Kenton County is targeting the manufacturing industry for future job opportunities. Manufacturing offers higher quality jobs than other industries through generally higher wages to offer living-wage jobs and building a larger skilled workforce through development opportunities to improve the overall economy.
Educational attainment across the nation has increased (Figure 7). Campbell County has made the most significant increase in educational attainment over the last 10 years. With an increase of 12% of the population holding a bachelor’s degree or higher. Northern Kentucky has increased to hold a higher educational attainment than the rest of the nation.
Kenton County recovered well from the economic recession of 2008 and like every other county, we are still determining the impacts from the COVID-19 pandemic. This section focused on the economic conditions over the past decade with a focus on income, poverty, employment, and education. Below are some key points:
• Per capita income ranked highly among Northern Kentucky counties, but Campbell County now holds the top spot as of 2021.
• Poverty rates have increased in recent years but remain lower than the national average.
• Unemployment has reached historically low rates over the past few years.
• There has been significant employment growth in industries like warehousing and storage, electrical equipment and appliance manufacturing, and data processing.
• Kenton County specializes in numerous manufacturing fields, but the highest industry the County specializes in is securities, commodity contracts, and investments.
• Kenton County is targeting manufacturing for future job opportunities considering its specialization and the benefits that come with the industry.
• Educational attainment has increased nationally, but Northern Kentucky now surpasses the national average with 33.4% of Kenton County’s population holding a bachelor’s degree or higher.
