Transcript Kentuckys-Economyx

KENTUCKY’S ECONOMY
Pre-Learning Quiz
1. What is capitalism?
2. What is a “free-market economy”?
3. How important is agriculture in Kentucky,
and what do we mostly raise / grow?
4. How important is manufacturing, and what
do we in Kentucky produce / make?
5. How has Kentucky’s economy changed over
the years?
Important Economic Terms
Capitalism: an economic system characterized by private or
corporate ownership of capital goods, by investments that are
determined by private decision, and by prices, production, and
the distribution of goods that are determined mainly by
competition in a free market
Free Market Economy: an economic market or system in which
prices are based on competition among private businesses and
not controlled by a government
Per Capita Income: income of each person
Gross Product: the total value of the goods and services produced
during a year, not including the value of income earned in
foreign countries (Gross Domestic Product / Gross State Product)
Economics
 People make choices
about how to use
limited resources,
decide the ownership
of resources, and
structure markets for
the distribution of
goods and services.
Economics
 What are the basic
characteristics of free
market, command, and
mixed economies?
 www.adamsmith.org
Economics
 Characteristics of
major economic
systems
 Free market
 Private ownership of
property/resources
 Profit
 Competition
 Consumer sovereignty
 Individual choice
Economics
 Characteristics of
 Command economy
major economic
systems
 Central ownership of
property/resources
 Centrally-planned
economy
 Lack of consumer
choice
Economics
 Characteristics of major
economic systems
 Mixed economy
 Individuals and businesses
as decision makers for the
private sector
 Government as decision
maker for the public sector
 A greater government role
than in a free market
economy
 Most common economic
system today
Economics
 The United States
economy is a mixed
economy .
 In the United States
private individuals,
businesses, and
government share
economic decision
making
Economics
 What are the essential
characteristics of the
United States
economy?
Economics
 Characteristics of the
United States economy
 Free markets—Markets are
allowed to operate without
undue interference from
the government.
 Private property—
Individuals and businesses
have the right to own
personal property as well
as the means of production
without undue interference
from the government
Economics
 Characteristics of the United
States economy
 Profit—Profit consists of
earnings after all expenses have
been paid.
 Competition—Rivalry between
producers/sellers of a good or
service results in better quality
goods and services at a lower
price.
 Consumer sovereignty—
Consumers determine through
purchases, what goods and
services will be produced.
You tube BLUEGRASS AIRPORT
 Kentucky’s Economy:
Current Trends and
Future Realities
(parts 1-2)
Class Activity
Write a paragraph describing the
economic system of the United
States, summarizing it as briefly –
yet completely – as possible,
including information about
capitalism, free-market, profit,
and competition.
Overview
Between statehood and the Civil War, Kentucky
was one of the preeminent agricultural
states, partly because of good access to river
transportation down the Ohio and the
Mississippi to southern markets. Coal mining
had become an important part of the
economy by the late 19th century.
Overview
Although agriculture is still important in
Kentucky, manufacturing has grown rapidly
since World War II and was, by the mid-1980s,
the most important sector of the economy as
a source of both employment and personal
income. Kentucky leads the nation in the
production of bituminous coal and whiskey
(distilling half of the nation's total in 1996),
and ranks 2nd in tobacco output.
Overview
 Early in its history Kentucky gained recognition
for its excellent farming conditions. It was the
site of the first commercial winery in the United
States (started in present day Jessamine County
in 1799) and due to the high calcium content of
the soil in the Bluegrass region quickly became a
major horse breeding (and later racing) area.
Today Kentucky ranks 5th nationally in goat
farming, 8th in beef cattle production,[60] and
14th in corn production.[61]
Overview
Today Kentucky's economy has expanded to
importance in non agricultural terms as well,
especially in auto manufacturing, energy fuel
production, and medical facilities. As of 2010
24% of electricity produced in the USA
depended on either enriched uranium rods
coming from the Paducah Gaseous Diffusion
Plant (the only domestic site of low grade
uranium enrichment), or from the 107,336 tons of
coal extracted from the state's two coal fields
Overview
Kentucky ranks 4th among U.S. states in the number of
automobiles and trucks assembled. The Chevrolet
Corvette, Cadillac XLR(2004–2009), Ford
Escape, Ford Super Duty trucks, Ford
Expedition, Lincoln Navigator, Toyota Camry, Toyota
Avalon, Toyota Solara, and Toyota Venza are
assembled in Kentucky.
In May 2010, the Army Human Resource Center of
Excellence, the largest office building in the state at
nearly 900,000-square-feet, opened at Fort Knox,
employing nearly 4,300 soldiers and civilians
Kentucky Business
The best selling car in the United States,
the Toyota Camry, is manufactured in
Georgetown, Kentucky
Kentucky Business
The best selling truck in the United States,
the Ford F-Series, is manufactured in
Louisville, Kentucky
Top 10 Industries in KY
(in millions of dollars)
Motor Vehicles and Equipment $10,255
Health Services $8,064
Business Services $3,599
Food and Kindred Products
2,718
Electric, Gas, and Sanitary Services $2,551
Transportation by Air $2,351
Industrial Machinery and Equipment $2,274
Chemicals and Allied Products $1,964
Trucking and Warehousing$1,944
Fabricated Metal Products $1,891

Source: U.S. Census Bureau
Statistics
The total gross state product for 2010 was
$163.3 billion, 28th in the nation. Its percapita personal income was US$28,513, 43rd
in the nation.
As of July 2012, the state's unemployment rate
is 8.3%.
Class Activity
KENTUCKY’S ECONOMY: SUMMARY
Write a paragraph summarizing Kentucky’s
economy, including products, manufacturing,
and specific products grown or made in
Kentucky.
Also, answer these questions:
1. What makes Kentucky’s economy STRONG?
2. What could make our economy BETTER?
3. What JOB do you see yourself doing in 10 years,
and what do you have to do to prepare for it?
Taxation
There are 6 income tax brackets, ranging from
2% to 6% of personal income. The sales tax
rate in Kentucky is 6%. Kentucky has a
broadly based classified property tax system.
All classes of property, unless exempted by
the Constitution, are taxed by the state,
although at widely varying rates.
Taxation
Real property is assessed on 100% of the fair
market value and property taxes are due by
December 31.
Once the primary source of state and local
government revenue, property taxes now
account for only about 6% of the Kentucky's
annual General Fund revenues
Taxation
Until January 1, 2006, Kentucky imposed a tax on
intangible personal property held by a taxpayer
on January 1 of each year. The Kentucky
intangible tax was repealed under House Bill 272.
Intangible property consisted of any property or
investment , such as bonds, notes, accounts
receivable, trusts, enforceable contracts sale of
real estate (land contracts), money in hand,
money in safe deposit boxes, annuities, interests
in estates, etc.
Kentucky Taxes
 Rev.ky.gov
 FORMS, INFORMATION, ETC.
Then & Now
Kentucky is an important center of
manufacturing, agriculture, and mining. Until
the 20th century, farming was the state’s main
economic activity. As a result of abundant
coal and hydroelectric power, manufacturing
grew in importance after the 1930s. Today,
manufacturing is Kentucky’s major economic
activity, followed by service industries.
Agriculture
Kentucky remains one of the nation’s major
agricultural states. Tobacco is the leading
source of crop income. Kentucky ranks
second among the states, after North
Carolina, in the production of tobacco. The
state’s other major cash crops are corn,
soybeans, and hay.
Agriculture
Kentucky’s farmers also raise livestock—cattle
and horses. The breeding and selling of
thoroughbred horses is Kentucky’s most
valuable source of livestock income. Most of
the thoroughbred horses come from the
bluegrass pastures that are located near
Lexington.
KY’s Top 10 Leading Crops
Total (in millions)
 Hay $500.4
 Tobacco $456.1
 Soybeans $405.2
 Corn $377.3
 Wheat $66.5
 Sorghum $7.5
 Apples $2.3
 Barley $1.1
 Peaches $1.0
Source: National Agricultural Statistics Service
KY’s Land usage
Pastureland 23%
Cropland 21%
Other Land 3%
Federal Land 5%
Developed Land 7%
Forest Land 41%
Coal
Kentucky is a leading coal-producing state. Coal
is mined in Kentucky’s eastern Appalachian
counties and in western Kentucky.
About 60 percent of Kentucky’s coal comes
from underground mines, the rest from
surface mines. Coal-burning plants produce
about 97 percent of Kentucky’s electric
power. Hydroelectric utilities, such as Barkley
and Kentucky dams, produce most of the
rest.
Coal
Kentucky
 Coal-miners-in-kentucky.com
 Benhamky.org
Manufacturing
Manufacturing and service industries are
Kentucky’s most important economic
activities. Most industries are located in
Louisville, Lexington, and northern Kentucky.
The production of transportation equipment,
such as motor vehicles, is Kentucky’s leading
manufacturing activity. Chemicals rank
second among the state’s manufactured
products.
Service Industries
Major service industries are related to
government, finance, health care, tourism,
and wholesale and retail trade.
Employment
KY’s Employment by Industry
Source: Current Employment Statistics © 2005 Office of Employment and Training
An Official Commonwealth of Kentucky Web Site.
 Agriculture, forestry, fishing, hunting, and mining 59,729 (3.3%)
 Construction 129,618 (7.2%)
 Manufacturing 315,774 (17.6%)
 Wholesale trade 60,854 (3.4%)
 Retail trade 217,164 (12.1%)
 Transportation and warehousing, utilities 108,738 (6.0%)
 Information 39,303 (2.2%)
 Finance, insurance, real estate, and rental and leasing 97,350 (5.4%)
 Professional, scientific, and business services 111,878 (6.2%)
 Education, health, and social services 365,605 (20.3%)
 Leisure and hospitality 129,973 (7.2%)
 Public administration 77,128 (4.3%)
 Other services 85,150 (4.3%)
Kentucky Exports
In recent decades, Kentucky’s role in the global
economy has steadily risen. In 2004,
Kentucky’s exports totaled nearly $13 billion.
About 18 percent of all manufacturing
workers in Kentucky depend on exports for
their jobs. Kentucky now ranks 19th among
the 50 states and the District of Columbia in
its amount of exports.
Kentucky Exports
Manufactured goods account for nearly 96.1% ($12.5
billion) of Kentucky’s exports. Agriculture accounts
for 2.2% ($277 million), and minerals and ores
account for less than 1% ($28.4 million.)
Transportation equipment ranked as Kentucky’s top
export in 2004. Other top exports were chemicals,
machinery, and computer and electronic products.
Livestock is the only non-manufacturing industry
among Kentucky’s top ten exports. Livestock ranks
as Kentucky’s tenth largest export ($244 million.) In
2004, Kentucky was first in the nation in livestock
exports and first in the nation in equine (horse)
exports ($157.2 million).
Kentucky Exports
By 2005, Kentucky was exporting globally to more than
165 foreign destinations. Canada is Kentucky’s
largest foreign market. In 2004, Kentucky’s exports
to Canada totaled almost $4.63 billion, which made
up 35.7 percent of the state’s total exports. France is
the state’s second largest export market. It received
more than $1.08 billion of goods, or 8.3 percent of all
Kentucky exports. Following Canada and France,
Kentucky’s major export markets include the United
Kingdom ($959 million), Japan ($865 million), and
Mexico ($786 million).
http://www.thinkkentucky.com/kyedc/inttrade.asp
Gross Product & Income
Two key indicators of the strength of Kentucky’s
economy are the gross state product and per
capita personal income. The gross state product
shows the values of the goods and services
produced in Kentucky. The U.S. Department of
Commerce reports that in 2004, Kentucky’s
gross state product was about $135.4 billion. Per
capita income shows the average income for
each Kentucky resident. The U.S. Department of
Commerce reports that in 2004, Kentucky’s per
capita personal income was nearly $27,709.
Per Capita Income
United States
Kentucky
Kentucky Rank
293,655,404
4,145,922
26th
94,393
34,549
-
Cost of Doing Business Index
(2003)
100.0
85.0
4th
Cost of Living Index (1st
Quarter 2005)
100.0
93.0
16th
$593 Billion
$8.46 Billion
23rd Highest
Per Capita State Taxes Paid
(2004)
$2,025
$2,041
21st Highest
State and Local Tax Burden
(2005)
10.1%
10.3%
33rd Highest
Per Capita Personal Income
(2004p)
$32,937
$27,709
42nd
Average Annual Wage and
Salary (2003)
$37,130
$31,169
34th
Total Gross State Product
(2004p)
$11.6 Trillion
$135.4 Billion
26th
Category
Total Population (2004)
Average County Population
(2004)
Total State Taxes Paid
(2004)
Per Capita Gross State Product (2004)
$39,672
$32,661
42nd
12.5%
14.4%
41st
5.5%
5.3%
28th
Total Exports in Billions (2004)
$817.9
$13
19th
Exports per Capita (2004)
$2,785
$3,134
9th
Percentage of Adults With a High
School
Education or Higher (2004)
85.0%
81.8%
44th
Percentage of Adults With Four
or More Years of College (2004)
25.0%
21.0%
48th
Poverty Rate (2003)
Annual Employment Rate (2004)
Eastern Kentucky Economy
In contrast to the generally prosperous
Bluegrass area and the growing industrial
cities, eastern Kentucky, highly dependent on
coal mining, has long been one of the poorest
regions in the US. Beginning in the early
1960s, both the state and federal
governments undertook programs to combat
poverty in Appalachian Kentucky.
Greenup County Economy
Economy Greenup, KY United States
Unemployment Rate8.40% 8.60%
Recent Job Growth-0.87% 0.35%
Future Job Growth29.86% 32.10%Sales
Taxes6.00% 5.00%
Income Taxes5.80% 4.70%
Income per Cap.$22,300$26,154
Household Income$42,299$50,935
(source: www.bestplaces.net)
Greenup County Income
ESTIMATED HOUSEHOLDS BY HOUSEHOLD
INCOMEIncome Less Than
15K16.05%12.37%Income between 15K and
25K13.96%10.53%Income between 25K and
35K12.84%10.88%Income between 35K and
50K14.68%15.37%Income between 50K and
75K20.11%20.14%Income between 75K and
100K10.52%12.41%Income between 100K and
150K8.34%11.27%Income between 150K and
250K2.66%5.01%Income between 250K and
500K0.77%1.86%Income greater than
500K0.08%0.16%
Greenup County Occupations
POPULATION BY OCCUPATIONManagement,
Business, and Financial
Operations7.82%14.04%Professional and
Related
Occupations18.18%20.61%Service14.58%14.45
%Sales and Office27.56%26.75%Farming,
Fishing, and Forestry0.66%0.70%Construction,
Extraction, and
Maintenance13.15%9.42%Production,
Transportation, and Material
Moving18.05%14.05%