Kentucky’s workforce crisis is apparent. Wherever you go in Kentucky, the “now hiring” signs are impossible to miss. You would be hard-pressed to find an employer who isn’t struggling to find staff and fill open positions.
And let’s be clear, this is not employers complaining or being picky, as some have argued. It’s simple math. Kentucky has 90,000 fewer workers today than it did in March of 2020. This means that just over half of Kentucky adults, 56 percent, are working, which is the lowest level since the 1970s.
However, the workforce challenges Kentucky employers are currently facing did not originate with pandemic. Rather, they have been building for the past two decades. In many cases, the pandemic simply shined a light on them and, in some cases, made them worse.
The story of Kentucky’s workforce challenges is the focus of the Kentucky Chamber Foundation’s new report, 20 Years in the Making: Kentucky’s Workforce Crisis. With this new report, we wanted to create a renewed sense of urgency to address these challenges and reframe conversations about workforce with a deeper understanding of root causes and the multi-faceted solutions it will take to put Kentucky on the right track.
Our report examines workforce trends in Kentucky from 2000 to the present, finding that the percentage of Kentucky adults participating in the workforce has been trending downwards for the past twenty years. Perhaps more troubling, our workforce participation rate has consistently trailed the nation throughout this timeframe by an average of almost four percentage points. Kentucky currently ranks 48th in the nation for workforce participation, only ahead of Mississippi and West Virginia.
Key root causes include factors such as retirements, skills gaps, health issues, incarceration and criminal records, slow population growth, child care, transportation, broadband access, social safety net programs, and more.
Many of these challenges are nationwide issues, too; but some may be more acute in Kentucky. For example, economists at the University of Kentucky have concluded the opioid epidemic alone may be responsible for removing up to 55,000 Kentuckians from the workforce. Broader health issues, skills gaps, lack of access to child care, and criminal justice are other factors that may be uniquely pressing in Kentucky.
So, the question is how do we tackle these issues? For starters, we need to accept the fact that there is no silver bullet. Just as the causes are multifaceted, the solutions must be, as well. Our report lays out an array of specific actions Kentucky policymakers can take to solve the workforce crisis.
- To increase postsecondary attainment rates, for instance, we should make completing the Free Application for Federal Student Aid (FAFSA) a requirement for high school graduation.
- To remove barriers to employment for individuals with criminal records, we should improve our expungement laws, enhance re-entry support services, and repeal bans on ex-felons accessing state financial aid dollars.
- To encourage individuals receiving unemployment benefits to find their next career opportunity more quickly, we should strengthen Kentucky’s work search requirement and re-employment support services.
- To grow our population, we should lower Kentucky’s individual income tax to be more competitive in attracting workers from other states and retaining workers here in the Commonwealth.
These are just a few examples of the many recommendations we lay out in the report The bottom line is that Kentucky needs to recognize our workforce challenges as the crisis it is and treat them as such. More than that, there is so much to gain from finally tackling these issues.
With one of the lowest workforce participation rates in the nation, Kentucky will never be able to live up to its full economic potential. If Kentucky could achieve a workforce participation rate and employment-population ratio that outpaces the nation, I know we would be an economic powerhouse with which few other states could compete. It is time to truly tackle this issue and build the foundation on which that vision of Kentucky will stand.