Kentucky has experienced incredible economic investment in recent years. However, government data shows that the state is already struggling to fill open jobs, and these challenges will intensify as more positions open up.
In a meeting of the Interim Joint Committee on Economic Development and Workforce Investment Thursday, lawmakers heard information about the state’s current workforce reality and policy recommendations to help grow the state’s workforce in order to keep up with the growing demand for workers.
Kevin Smith, Vice President of Kentucky Bourbon Affairs at Beam Suntory and current Chair of the Kentucky Chamber of Commerce, said the Commonwealth is seeing a unique economic moment with incredible investments, but we continue to struggle with severe workforce shortages. Employers are aggressively working to find qualified workers, increasing wages and offering other benefits to compete with other companies even across state lines. As more jobs open up in Kentucky due to announced investments in the state, this will make the state’s labor market even tighter, ultimately creating an unsustainable dynamic that may threaten future growth.
“At the end of the day, it’s a math problem. Our workforce isn’t growing and we don’t have enough Kentuckians participating,” Smith said. “We must continue prioritizing workforce growth with policies and programs, building on great work that has been done.”
Laying out a path for the future, Smith said failure to address these issues will mean historic missed opportunities to capitalize on economic investments while success means growth and a thriving economy—a signal to businesses across the nation and the world that Kentucky is open for business.
Dr. Charles Aull, executive director of the Kentucky Chamber Center for Policy and Research, pointed to data showing that Kentucky has had rapid job growth in recovering from the COVID-19 pandemic, even outpacing other surrounding states. On the other hand, the state’s workforce participation rate tells a very different story.
Kentucky’s workforce participation rate is currently 0.9 percentage points lower today than before the pandemic, meaning while there are more jobs than before, there are less people in the workforce.
Aull stated the workforce issue is multifaceted and said some of the causes include access to child care, substance use disorder, weak population growth, a large retiring population, health, and more.
Kentucky Chamber Senior Vice President of Public Affairs Kate Shanks emphasized the state’s workforce problem is significant enough that it will take more than one bill or one session to tackle.
Shanks emphasized the important workforce measures passed by lawmakers in the 2022 legislative session, including funding for higher education and financial aid, criminal justice reforms, child care assistance, and reducing state individual income taxes. To continue addressing Kentucky’s workforce challenges, she encouraged policymakers to look at solutions like removing barriers to work for Kentuckians, making further investments in workforce training, and attracting more high-skill workers through measures like tax reform to make Kentucky a competitive place to live and work.
In closing, Smith said Kentucky’s current pattern of having two open jobs for every Kentuckian is unsustainable, leading to higher costs for employers and consumers and straining small businesses. Pointing to a new report from the Kentucky Chamber Center for Policy and Research, he stressed the need for policymakers and stakeholders to work together toward a common strategy for growing Kentucky’s workforce to fill the jobs of today and tomorrow.