3 reasons why Kentucky is the center of the labor shortage
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- In the thick of the "Great Resignation," Kentucky was the state with the highest quit rate in August.
- With a minimum wage of just $7.25, some people might be in search of higher pay.
- Access to childcare is also a big problem in the state, with at least half of Kentuckians living in a "childcare desert."
People across the country are quitting their jobs in search of a better deal.
The so-called "Great Resignation" is especially pronounced in Kentucky. Throughout the pandemic, the state's quit rate trended higher than the national - especially in August. Even though the state saw a decline in job openings that month, it still had two openings per unemployed person and the second-highest opening rate in the country. As in other states, employers are having a hard time finding enough workers to fill them.
The Bureau of Labor Statistics recently released its first monthly report of state job openings and labor turnover, and it highlighted just where the highest quit rates in the US were as of August. Kentucky took the lead, with 4.5% of workers in the state quitting their jobs that month.
While Mike Clark, an associate professor of economics at the University of Kentucky and the director of the Center for Business and Economic Research, told Insider the state's one-month high quit rate could be noise, Kentucky's quit rate was higher than the nation's even before the pandemic:
But the problem in Kentucky goes beyond pandemic anomalies. For years, the state's labor market has suffered from a high number of retirement-age workers, the opioid crisis, and a gap between workers' skills and what employers want, among other factors, according to the Kentucky Foundation Chamber. Now, amid a historic shift in worker power, Kentuckians are realizing the jobs they had don't meet their needs anymore. Insider set out to find out why.
At least half of Kentuckians live in a "childcare desert"
Jason Bailey, executive director of the Kentucky Center for Economic Policy, told Insider that one issue is that some people can't work because of caregiving responsibilities and poor access to childcare is forcing some people to quit or leave the workforce completely. This is why, he said, it's important to invest in elderly care and childcare, such as with the investments proposed in the current social spending framework.
The Center for American Progress told Insider that at least half of the state is in a "childcare desert", which they defined as "any census tract with more than 50 children under age 5 that contains either no child care providers or so few options that there are more than three times as many children as licensed child care slots."
According to a previous analysis, 66% of people in rural areas in the state and 55% of people in the lowest-income neighborhoods of Kentucky live in a childcare desert.
Workers want more better pay, benefits, and conditions
The three states with the highest quit rates in August - Kentucky, Georgia, and Idaho - also had minimum wages at the federal level of $7.25.
Clark said with so many openings right now, there's an opportunity for workers to negotiate better pay, benefits, and working conditions. If they don't succeed, they can seek another job where they can.
"So a lot of what may be going on is simply that workers are seeing that they have an opportunity to move up to maybe a better job that pays more or provides better working conditions," Clark said.
Bailey said he thinks some people have been holding out for better quality jobs now that they may have savings from things like stimulus checks. He added people are "quitting jobs that are not providing adequate wages and fair or good working conditions."
Coronavirus concerns are still affecting people's decision to work
Bailey said the JOLTS report data was collected during a surge in cases in Kentucky. Data from the CDC shows COVID-19 cases increased in August in the state and have since declined from their peak at the beginning of September.
According to CDC data as of November 7, 62.2% of Kentucky adults age 18 and older are fully vaccinated, compared to the national adult vaccination rate of 70.1%.
Bailey said regarding the increased cases seen in August are "putting a tremendous strain on families" and an increase in caregiving responsibilities. People may be quitting or leaving the workforce to take care of their own health or to care for someone else.
Although some businesses may struggle to find new workers, Bailey said that won't be the same story for all businesses.
"Those employers that offer good wages and benefits, that provide a safe and supportive working environment, they won't have any trouble attracting applicants and getting their jobs filled," Bailey said. "Those that continue to provide low wages and unsafe or insecure working conditions, yeah they're going to have trouble in a tight labor market like this."
from Business Insider https://ift.tt/3mVUlNg
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