Lexington, KY -
Health insurance premiums are huge for employers," began Kentucky Chamber of Commerce CEO and President Dave Adkisson.
And at the mention of employee health insurance, Adkisson offered a stunning analogy. When asked to speak on the effect that rising health-care costs are having on businesses, Adkisson shows the audience a picture of a Scott County home that was on the market at a price of $150,000 last year. Then he explains that, for a large employer that provides health insurance for an employee and family, it would be more cost-efficient to buy that house for them than to pay for their health care, which typically amounts to $1,100 per month for a family of four.
"And that's not an exotic health coverage plan," Adkisson said. "That's a standard plan with comprehensive benefits. And so that's how big a deal it is to companies, and that's why companies are having to shift some of that burden over to the employees, so the employees will become more responsible for their own wellness."
While waiting to see how the Obama administration and Congress deal with out-of-control health-care costs, the state chamber has partnered with the Kentucky Cabinet for Health and Family Services to produce a Workplace Wellness Kit.
"It's a how-to guide Ö on how an employer of any size can get into a wellness program for their employees," Adkisson explained. The idea is that Kentucky employers and taxpayers simply can no longer indulge the state's abysmal record of ranking at the bottom of the best health-related listings and at the top of the worst - "The Kentucky Uglies," as UK President Lee Todd has described it. The toolkit is available online at www.kychamber.com and can be downloaded as a PDF.
Also available in the online podcast is Adkisson's account of the chamber's recent statewide survey of Kentucky businesses and a follow-up teleconference with business leaders and economists all across the state to measure their views of the health of the Kentucky economy in the midst of a major recession.
Here are some excerpts from the discussion:
Let's jump right into the survey and tell us if you can sketch out what you found.
DA: We questioned our 2,700 members across the state from Paducah to Pikeville and asked them about the economy, their revenue, their employment-what they were experiencing. And we had 250 responses which we thought was excellentÖ if you imagined a hotel room with 250 business people from different walks of business in there, and each one of them, they're not just reading newspaper headlines and feeling good or feeling bad based on the stock market or something. They're talking to their customers, they're talking to their suppliers, they're reading trade publications, they're going to their industry meetings, conventions, etc., some of them have consultants doing professional analysis for them, spotting trends and all. So 250 people in their best judgment projected that a year from now that things would be better. They projected three months, six months and 12 months, and with each of those snapshots, things got a little rosier. Specifically, a year from now, if their predictions come true, two out of five employers, about 40 percent, will have increased their employment, a significant turnaround from the last year. Two out of five employers, another 40 percent, will stay the same and 20 percent, one out of five employers, will have further decreased their employment. That's not an immediate rebound, but I think with the other glimpses of hope that are out there, there's a cause for optimism that there is light at the end of the tunnel.
Were those dynamics confirmed in what you heard from business leaders and economists who participated in the recent teleconference?
DA: Yes. We had two economists: Dr. Paul Coomes from the University of Louisville and Maria Hampton, who is with the St. Louis Branch of the Federal Reserve, covering southern Indiana and western Kentucky. I think I could characterize their comments as things are not as bad as they were. (Hampton) said that's about as positive as she could say it right now. She felt that third quarter of '09 ... would be a transitional quarter - in other words, basically break-even in terms of the economy growing. And in the fourth quarter, (we would be) seeing some positive growth and then more growth in the first quarter of 2010. Actually, I thought that was fairly optimistic. Most of the economists that I have been trying to keep up with have said they see recovery in maybe the first quarter of 2010. The other stories from around the state were more snapshot-type stories of the present situation; we weren't asking them to project. A big coal operator in eastern Kentucky said that coal was down. You just can't sell coal on the spot market right now, which was very different from the same gentleman's comments back in January, when he was having trouble finding people, and coal was selling in the $65-a-ton range.
That's a very brief period of time.
DA: That's right - in four months, a complete turn in eastern Kentucky.
Would you say that is a result of manufacturing falling off?
DA: I suppose so, yes, and utilities requiring less for manufacturing. And then in northern Kentucky, a fairly dismal report about commercial construction; of course, they're a very new economy up there based around that airport. Central Kentucky was probably the most stable and the most encouraging in that sense. Louisville still (has) over 10 percent unemployment, fairly significant prob-lems there with the exception of Fort Knox, where they're creating about 3,000 jobs in the next year or two for the U.S. Army's human resources command. In other words, Fort Knox, instead of training tank drivers, will now coordinate the global human resources function for the U.S. Army, and then of course, you've had the big battery plant proposed for (Elizabethtown), which is subject to the stimulus money from the federal government coming down in a competitive process. There were some positive signs in western Kentucky: Fort Campbell soldiers coming home from Afghanistan and Iraq and therefore spending more money in Hopkinsville and Clarksville, Tennessee-that metro area there. Automotive is down significantly in Bowling Green, and Bowling Green (has been) one of the most robust communities in this state, perhaps more robust than Louisville and Lexington, maybe more comparable to the northern Kentucky economy over the last ten years. They're disproportionately hurting because of automotive cutbacks. And then southern Kentucky tourism around the Cumberland Lake area, house boat sales are down to basically nil. Tourism, they're hopeful that this year's summer program and the dam repair down there will yield better results than last year. So it was really a patchwork around the state - none of it that great, nothing to write home about in the sense of recovery, but people are hopeful that things will turn around here in the next quarter or so.