Baloney Sandwich Index rises higher in August

The latest Baloney Sandwich Index predicts an upward trend in the jobless rate for the Fort Smith metro area.

The August BSI rose to 148.8 from 126.4 in July. The July jobless rate in the region was 7.6%, down from 7.7% in June. The region’s jobless rate has dropped from 8.7% in January. The August jobless rate for the region is set to be released Wednesday (Oct. 2) morning by the U.S. Bureau of Labor Statistics.

Ken Kupchick, author of the index and director of marketing and development for the River Valley Regional Food Bank, says the index has an almost 70% correlation with Sebastian County unemployment numbers. He uses three numbers to compute the BSI:
• The number of sack lunches served by the St. John’s Episcopal Church Sack Lunch program;
• The Sebastian County jobless rate; and,
• The Fort Smith metro jobless rate.

During August, the church provided 4,390 sack lunches, down from the 5,957 in August 2012, down from 5,177 lunches served during August 2011, and up from the 3,329 served during August 2010.

The average number of lunches served each month reached a high of 5,017 during 2012. The monthly average was 4,249 in 2011, 3,316 in 2010 and 3,448 in 2009. For the year, the 2013 month average is 3,744.

The sack lunch program began in 1986 by the church, located in downtown Fort Smith, to help the homeless. The handful of volunteers that began the program has grown to an estimated 125 volunteers who support the effort.

The index has declined from highs of more than 200 in 2013 because officials at St. John’s changed the policy to serving just one meal per person. Because of the long-term unemployment in the Fort Smith area, program volunteers previously provided extra meals to those who requested them. The extra meals were included in the index count.

For the most part, the BSI forecasted the ease in the unemployment rate from from a high of 8.4% at the county level in January to a low of 6.8% in May and from a high of 8.7% at the metro level in January to a low of 7.2% in May.

"The uptick in the BSI is real. The line at St. John’s is growing. At the Nutrition and Health Fair held last Saturday many showed up simply because included the words 'free food,’” Kupchick said.

Arkansas’ jobless rate during August was unchanged compared to July, but a year-over-year comparison shows that 27,000 have left the workforce and more than 26,000 fewer Arkansans are employed.

Kupchick said the index decline in 2013 is primarily the result of a policy change at St. John's Sack Lunch program. Because of long-term unemployment in the Fort Smith area, program volunteers were providing extra meals to those who requested them. The extra meals were included in the index count.

The food bank set an all-time record of distribution in July 2013 by placing 975,091 pounds with its 217 member agencies during the month. Kupchick is hopeful that better corn crops will help support the growing demand for food relief.

"Bumper corn crops this summer will translate into cheaper protein prices at the retail level this fall. Hopefully, this will also mean increased donations of chicken and beef to the Food Bank,” he explained.

Arkansas’ jobless rate during August was unchanged compared to July, but a year-over-year comparison shows that 27,000 have left the workforce and more than 26,000 fewer Arkansans are employed.

The most recent The Compass Report for the Fort Smith region provides some hope that the region’s lengthy employment problem may soon improve.

Economist Jeff Collins, who conducts the data collection and analysis for The Compass Report, said employment in the region is finally showing signs of stability.

“Nonfarm employment was up a solid 2.7 percent year-on-year (3,200 new jobs), with total nonfarm employment of 120,200 jobs in June. This was the strongest year-on-year increase since November 2007 and further evidence that the local labor market has stabilized after a prolonged period of decline,” Collins noted in his analysis.

More is needed than just stabilization, according to Kupchick.

“The long-term unemployed have gone beyond desperate, making food pantries and soup kitchens like St. Johns a way of life,” he said.