This article first appeared in the March 1 version of the LINK Reader. To get these stories first, subscribe to our weekly print edition here.
As the United States rebounds from the COVID-19 pandemic, the nation’s economy faces a daunting labor issue: There are many available jobs but not enough workers to fill them.
Across the country, employers are scrambling to find workers to fill open positions. Recent data published by the U.S. Chamber of Commerce found there are 9.5 million job openings in the U.S., but only 6.5 million unemployed workers. That means that, if every one of those workers were hired, approximately 3 million jobs would still go unfilled.
Locally, Northern Kentucky business leaders are grappling with this reality. For now, the region is experiencing economic growth. If the labor pool shrinks in the coming years, though, whether through a lack of migration or baby boomers aging out of the workforce, the region’s leaders will be forced to reassess their economic goals and reckon with the consequences brought on by inaction.
“I’m unaware of an area in the country that is thriving, that isn’t growing,” Brent Cooper, president of the Northern Kentucky Chamber of Commerce, told LINK nky.
Attracting and retaining talent is a central component of economic strategy for regional bodies such as the NKY Chamber of Commerce, BE NKY Growth Partnership, meetNKY and OneNKY Alliance, among others.
“It doesn’t matter the industry. When we survey, the overarching No. 1 issue is we don’t have enough people,” Cooper said. “I think the leaders in the community have committed to the fact that the No. 1 overarching issue is growing, attracting and retaining talent.”
In addition to his duties at the Chamber of Commerce, Cooper is CEO of C-Forward, an information technology firm based in Covington. Cooper said that, despite raising wages since the pandemic, his business, along with many others in Northern Kentucky, has struggled to attract new employees.
Currently, all three Northern Kentucky counties boast low unemployment rates. Kenton County sits at 3.5%, while Boone and Campbell are at 3.4%, according to the U.S. Bureau of Labor Statistics. Nationally, the unemployment rate is 3.7%. Along with low unemployment rates, the counties’ combined civilian workforce is at an all-time high.
In Kentucky as a whole, the unemployed persons per job opening ratio was 0.8 in November 2023 and has been below 1.0 since November 2020, according to data provided by BE NKY. That means there is less than one available worker for every job opening.
So how did the U.S. – and Northern Kentucky – get into this precarious situation?
Unsurprisingly, some of the reasons can be traced to the pandemic. When offices were forced to close, a portion of white-collar workers were either laid off or required to work remotely.
When the pandemic subsided, employers added an unprecedented number of jobs. In 2022 alone, the U.S. economy added 4.5 million jobs. The only problem – there weren’t enough people to fill them.
Many workers used the pandemic as an opportunity to reassess their careers. Some workers decided to quit their jobs altogether, a phenomenon dubbed the Great Resignation.
Locally, the industries that were affected the most by retirements and resignations are blue-collar jobs, said David McAleese, research director at BE NKY.
“A lot of it is for those production jobs, construction, retail service, things like that. We are hearing this from the companies that we serve,” McAleese said. “In a lot of instances, the office and professional jobs – they’re having a much easier time, but, when it comes down to some of those more production and labor-intensive jobs, that’s where a lot of the challenge is.”
In the coming years, baby boomers – the second largest generation in the U.S. – will age into retirement, exiting the workforce and taking their decades of intellectual capital with them.
Janet Harrah, chief economist at Northern Kentucky University’s Center for Economic Analysis and Development, told LINK that there aren’t enough millennials and Gen Z workers available to fill the void left by the baby boomers. “Our population is aging rapidly. There’s not as many young people to come in at the back end to fill in the jobs,” she said.
From Harrah’s perspective, demographic trends play an outsized role in analyzing workforce trends. “Our population is getting older or having fewer children,” she said.
Not only are there not enough young workers now, there are not enough potential workers being born. In 2020, the U.S. birth rate dropped to its lowest level since the 1930s at 1.64 births per woman; the accepted replacement level birth rate – the rate at which the population is at least maintained – is 2.1 births. By the year 2034, older adults will outnumber children for the first time in the nation’s history, according to a report published by the Lightcast consulting firm.
Another cause of the labor shortage is decreasing immigration to the U.S. Between 2020 and 2021, when borders were shut down due to COVID-19, net international migration to the U.S. contributed only a 247,000-person increase to the nation’s population, according to U.S. Census Bureau data. That’s a 76% reduction when compared to the 1,049,000-person increase in the U.S. population between 2015 and 2016 from net international migration.
From the Chamber of Commerce’s point of view, increasing the number of legal immigrants in Northern Kentucky is necessary. Cooper said an internal Chamber of Commerce survey found that 78% of member businesses supported the organization being engaged in “reasonable legal immigration solutions.”
“I will say, it is an essential part of any ultimate workforce solution for our region long term. It has to include us being a welcoming place, and that’s making sure that people can come here and work here and pay taxes here and raise a family,” he said. “Those are key ingredients.”
If this issue isn’t adequately addressed, Cooper said Northern Kentucky could risk exacerbating already existing shortages in essential jobs such as police officers, nurses, teachers, emergency responders and firefighters.
“I think people miss when they talk about, ‘Hey, we don’t need more people, you know, we’re fine,’” Cooper said. “Not really. Just maintaining the quality of life – we don’t have enough nurses, we don’t have enough teachers, we don’t have enough police officers. Basic services that we’ve all come to depend on are going to are going to be delayed or denied.”
To avoid this outcome, what can Northern Kentucky do to help skill up its current workforce, while making the region more attractive for workers and employers to relocate here?
Northern Kentucky is in active competition for younger workers.
Last September, BE NKY invited Ernst & Young Economic Development Advisory Services Leader Amy Holloway to speak at their quarterly meeting. Holloway gave a presentation that outlined potential solutions such as increasing “quality-of-life investments” in recreation, housing and reliable public transportation. In the audience were Northern Kentucky officials, representatives and business leaders.
“What do we do with fewer people in our communities, and how important it is now to be investing in those quality of life assets, in those programs that make us an attractive place for people – to retain the population that we have, and even attract more people,” Holloway said during the presentation.
Lee Crume, BE NKY’s CEO, said Northern Kentucky leaders should prioritize these types of investments so the region can become a more “attractive place for the younger cohorts.”
“The community that solves daycare, pre-K, quality education, good career, good amenities – the communities that get that mix right I think are going to have a tremendous competitive advantage, and we’ve got to continue to work in that fashion,” Crume said.
Another key solution is increasing the workforce housing supply in the region. The Northern Kentucky Area Development District released a housing study last September that revealed the region’s economic and population growth has outpaced its available housing supply.
Just to support economic development over the next five years, the study found that the region needs to build 6,650 housing units across all demographics – 1,330 units per year.
The study defines workforce housing as households whose wages range from $15 to $25 hourly for full-time workers, with monthly housing costs between $500 and $1,500. Overall, there is a need for 3,000 new workforce housing units to be constructed.
However, that is only for the existing Northern Kentucky residents in one income range. To remain competitive with other regions, local homebuilders need to construct thousands more housing units across a variety of income levels, from workforce housing to luxury condos.
Besides adding more housing, another solution is to improve the skills of workers already living in Northern Kentucky. Whether it’s in nursing or trade jobs like plumbing or welding, the region needs younger workers in critical industries.
Educational institutions like Gateway Community & Technical College, NKU, the Enzweiler Building Institute, and public and private high schools offer a variety of skilled-labor curricula to people of all ages. “We need to have mechanisms in place to raise the skill level of people coming into the workforce, and quickly retrain or upskill,” Crume said.
For companies, automation is looked at as a solution. Don’t have enough workers to do low-skilled jobs? There might be a solution in robotics or artificial intelligence.
“This year, companies are automating like crazy,” Crume said. “As they automate, you lose the entry-level job in the companies.”
The elimination of these roles disproportionately affects less educated workers. A 2022 study published in Econometrica found that automation accounts for more than half of the increase in the income gap between more- and less-educated workers over the past 40 years.
As an IT professional, Cooper said he does not fear automation but rather thinks the phenomenon will lead to the creation of new roles. Additionally, Cooper believes that students, in college and younger, should be taught about artificial intelligence. Nonetheless, he views automation as only a small part of the solution.
“It may change, but I don’t see us automating our way out of a workforce shortage,” Cooper said.
Regardless of the prescriptions, Northern Kentucky is in the same boat as countless other regions in the U.S. There is a battle for talent, both nationally and internationally.
“The communities that figure out how to succeed with workforce are going to win the battle for talent, and right now we as a region need to step up our game.” Cooper said.
