Child Care and Housing Policy Important for Kentucky’s Workforce Growth, Says Business Community

Kentucky Chamber Senior Vice President of Public Affairs Kate Shanks and Vice President of Policy Charles Aull testified before the Interim Joint Committee on Appropriations and Revenue this week, demonstrating that child care and housing are two of the most immediate opportunities to strengthen Kentucky’s workforce.

Shanks and Aull emphasized that Kentucky’s long-standing workforce participation challenges will not be solved overnight. However, by addressing barriers like child care and housing, which directly affect whether Kentuckians can go to work and whether new residents can locate nearby jobs, lawmakers can continue the meaningful progress on one of the state’s most pressing economic issues.

Workforce Participation Challenges

Aull outlined Kentucky’s long-term workforce participation trends, noting that the state’s overall rate has been in steady decline since 2000 and continues to trail the national average. Demographic changes, including an aging population and fewer young workers, are the key drivers of this decline.

Even among prime-age workers, Kentucky lags the nation and ranks near the bottom, and participation rates vary widely across the state, with especially low rates in rural and eastern counties.

Since releasing the report, “Kentucky’s Workforce Crisis,” in 2021, the Chamber has focused on policies that will attract working-age adults to the Commonwealth, optimize workforce programs, support opportunities in challenged areas, and remove barriers to entry. Within this framework, Aull said, child care and housing have emerged as the two clearest opportunities to move the needle.

Child Care and Workforce Participation

Shanks highlighted child care as one of the clearest barriers keeping Kentuckians out of the workforce. A recent study by the Chamber shows that as many as 16,000–28,000 parents could potentially join the labor force if child care were more affordable and available.

Additionally, she highlighted the work of the Kentucky Collaborative on Child Care, a group of 40 stakeholders that developed 37 recommendations to improve child care in Kentucky. Learn more about the research and recommendations presented during a recent legislative testimony: Chamber-led Child Care Collaborative provides recommendations to grow Kentucky’s workforce and economy.

Housing and Workforce Growth

Aull also urged lawmakers to prioritize Kentucky’s housing shortage, which has worsened since the Great Recession, when construction of new units dropped sharply and never fully recovered. As Kentucky’s population has grown, supply has lagged, costs have risen, and availability has become an increasing problem.

Housing is central to the workforce challenge, Aull said. Kentucky risks losing the affordability edge that can be attractive to workers. He noted that Kentucky faces housing shortages near employers, leading to “spatial misallocation,” where jobs are available but workers cannot move close enough to take them.

The Chamber’s 2024 housing study, “Building a Foundation for Growth,” underscored these concerns, with 90 percent of local leaders saying their communities could not meet demand if 1,000 new jobs were created.

Shanks explained that the Chamber will focus on policies to expand housing supply and emphasized that offering a menu of options may be the best way to support communities across Kentucky.

Learn more about the research and recommendations presented during a recent legislative testimony: Chamber outlines policy solutions to close Kentucky’s housing gap.