Our tour of the nation’s economy continues with Kentucky. Kentucky was formed after the American Revolution when its residents separated from Virginia (West Virginia would do the same, but much later).
From that time on Kentucky was very much like many other southern states, especially the likes of Virginia, NC and Tennessee. Agriculture was very important to Kentucky. This was especially important due to the trade routes the existed while the country was still developing. The Ohio river bordered the north and fed to the Mississippi and Tennessee rivers. In the early days they farmed just about anything (like everyone else), but as specialization and consolidation rose in the 20th century, Kentucky’s focus shifted towards livestock. This includes cattle and goats, and the state is well known for their tradition of horses. They also do corn, wheat, tobacco, and apples in large quantities.
Like most states though, agriculture just doesn’t provide the jobs it used to. After WWII, manufacturing became very important to the Kentucky economy. This was similarly important to states on the northern border now known as the rust belt. The decline of manufacturing has hit the state hard, but they have been able to hold on to a few key products.
And by key, I mean real American product. The big brother of the best selling vehicle in the country (Ford F150) is made in Kentucky. These Ford Super Duty trucks do everyone from towing horses to EMS duty as ambulances. The best selling car in the US (the Toyota Camry) is also made in Kentucky. And one cannot forget the iconic Chevrolet Corvette, which has been made in Kentucky since the early 1980s and doesn’t look to be moving any time soon.
But Kentucky doesn’t just make cars and car parts. Though the supporting industries provide a lot of jobs, there’s an even more important manufacturer in Kentucky. Have you heard of a company called United States Enrichment Corporation? I doubt it, I sure hadn’t. It is not something that enriches people or society. They enrich uranium. And if you didn’t pay attention in science class or never watched a world domination movie, enriched uranium is vital to nuclear power plants (and bombs). As of right now, the only fully operating facility in the US is based in Kentucky. Not only is this vital for national security (don’t want a breach there) but it’s vital for our energy needs.
If that doesn’t have you energized enough, Kentucky is also important to another energy source, coal. The Appalachian Mountains are full of coal, and while we usually think of West Virginia and coal, Kentucky has their own motherload. This is mostly in the eastern part of the state, but there is another set of deposits that starts in the west and stretches north into Illinois. It is estimated that between coal and the nuclear rods, almost a quarter of our nation’s electricity production depends on Kentucky.
While that seems important, all is not well in Kentucky. Their unemployment rate is almost always higher than the national average, and there are many areas suffering. There are generous incentives in place for startup companies in Kentucky, but we haven’t seen anything huge. They have been able to get some big employers in the region with a number of UPS hubs and their global air hub called Worldport. They are still well known for their Bourbon too.
One of Kentucky’s greatest draws is its natural preservation. They have large portions of the state protected by local and national government. And they have successfully reintroduced certain species of animals that were extinct east of the Mississippi. This beauty, combined with an excellent reputation of college basketball and horsing tradition, gives the state a decent level of tourism income for one without a beach.
So it’s not the sexiest state, but Kentucky gets by. And with the types of cars they produce, their importance to our nation’s energy production, and of course the bourbon, there’s no question the heart of America is in Kentucky.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
