ByRachel Whitten
March 10, 2010

(KansasReporter) TOPEKA, Kan. – Kansas’ unemployment rate increased to 7.1 percent in January, helping to force the state’s unemployment benefits fund to seek federal help for the first time in history.

The increase from December’s 6.2 percent jobless rate is a bit smaller than normal for December to January changes, the Kansas Department of Labor said Wednesday. Analysts there say there are signs job markets in the state have begun stabilizing.

Even so, “these numbers are discouraging,” Kansas Gov. Mark Parkinson said.

“It’s clear that Kansas continues to reel from the effects of the national recession,” he said. “There are too many Kansans without a job.”

Some 6.3 percent of Kansas workers were unemployed in January, 2009. Altogether Kansas workers have lost 54,100 jobs in the last year, including 900 in the government sector, which previously has seemed more immune to reductions. U.S. Labor Department statistics indicate that government employment in Kansas has increased 1.2 percent, to 262,000 jobs since December, 2007, before the recession began deepening, while private sector employment decreased 5.1 percent, to just under 1.1 million workers.

The state’s persistently high unemployment rate drained Kansas’ unemployment insurance fund of more than $766 million in 2009. Labor Department officialswarned in January that federal help would be needed to pay unemployment benefits until new unemployment insurance tax payments could begin replenishing the fund in April and beyond.

Kansas began borrowing the first of what so far is $16.2 million to help cover unemployment checks on Feb. 23, said Kathy Toelkes, a state Labor Department spokesperson. 

“We became aware in the second quarter of last year that the trust fund was decreasing, but we were able to go into February before borrowing from the federal government,” Toelkes said.

The money will be interest free if it is repaid in 2010, Toelkes said. Twenty eight other states also are borrowing from the federal government to pay state unemployment claims.   

Department analysts said seasonal and holiday changes were the biggest contributors to the January increase. January’s increase was smaller than average for post-holiday job losses, which may be a sign Kansas job markets are stabilizing, said Tyler Tenbrink, a Labor Department economist.

Over the last five months, “we’re seeing the rate of job loss moderating, but we have not seen job creation,” Tenbrink said.

Kansas unemployment was highest in Doniphan County, at 13.1 percent and lowest in Haskell and Wichita Counties at 2.7 percent.