Growing our state’s population is a rising issue on the public policy priority list and should be a consideration in more of Frankfort’s decision-making.
Opportunity is lining up for Kentucky like never before. However, not having a sufficient workforce to meet the moment is a factor that can diminish the outcome.
Logistics, one of Kentucky’s specialties, is gaining the recognition it long has been due. Our logistics advantage has brought investment, projects and jobs for decades. Good transport infrastructure is a plus, but the biggest factor is geography: Two-thirds of the U.S. marketplace is within a day’s delivery drive. This has led UPS, DHL and now Amazon to locate their largest air freight hubs here; businesses can ship to the entire world in a day.
Now there are two new reasons Kentucky is seeing more action:
• First is the general reshoring of U.S. supply chains that were proven vulnerable to disruption by the COVID-19 pandemic. It is just getting started and will be a five-year process.
• Second, the pair of multibillion-dollar electric-vehicle battery plants coming to Kentucky will also require the creation of new supply chains.
There will be dozens of parts, materials and service providers standing up what is essentially a new sector in international advanced manufacturing.
These two developments present unprecedented opportunities that the commonwealth has the competitive advantages to win and use as building blocks for a better future.
Pandemic impacts continue to buffet the economy: shutdowns, business-sector declines, surges in e-commerce and other buying, supply chain disruption, demand and production imbalances. War in Europe is creating shortages in energy supplies, food grains, fertilizer and more.
Experience has shifted companies’ thinking to an understanding that they need to be near their sales markets and their suppliers. Physical operations in China or Bangladesh are cheaper, but increasingly subject to costly disruption. Last year 220,000 jobs “reshored” to the U.S. from abroad, mostly from China, and in 2020 it was 160,000 jobs.
Kentucky presents a safe, all-American solution to those looking to harden their supply chains. Ford has literally bet the company on the state and that was no random decision. Ford has the resources to give serious consideration to its choices. Others will follow suit.
Workforce development is a global challenge. Everyone is trying to build a skilled population that can best meet the job demands of today and tomorrow, and Kentucky is doing a good job growing its training infrastructure. Our unemployment rate is at an all-time low.
The commonwealth has experienced lower than the national average rates of population growth for decades but does continue to grow. Last year, 18 states lost population; in 2020, 16 states lost residents, and 10 shrank in 2019. Kentucky topped 4.5 million in 2020.
Changes in our tax structure are a growth-positive step. States with no or low income tax rates are winning. Their sales tax rates are higher, but so are their quality-of-life indexes. Public safety, education, health care and retiree-friendly policies can be welcoming also.
It will be wise for state leaders to seek and find opportunity to cooperate around policy that benefits us collectively. Political conflict might benefit a few, but it will harm everyone.