Resources - Frequently Asked Questions
A: Most rural areas in the U.S. are suffering from severe workforce shortage issues due to flat or declining populations. The exceptions often include communities within driving distance of a metropolitan area, areas with natural or other in-demand amenities, and college towns or towns with excellent medical facilities.
For rural communities that don't have these opportunities, I have found that rural communities can address the following workforce root causes and impact many of the workforce elements :
- Expertise/learning/training,
- Targeted marketing/engagement,
- Culture,
- Work schedule/location,
- Wages & Benefits,
- Management,
- Transportation,
- Policy restrictions - Internal,
- Child care,
- Housing,
- Job security, and
- Amenities.
The full list of 25 root causes can be found here: https://www.midwestworkforce.com/wv/root-cause-definitions
A: Most rural areas in the U.S. are suffering from severe workforce shortage issues due to flat or declining populations. The exceptions often include communities within driving distance of a metropolitan area, areas with natural or other in-demand amenities, and college towns or towns with excellent medical facilities.
For rural communities that don't have these, I have found that these workforce elements are often targeted:
Employee output: 1.1, 1.2, 1.3
Retention: 2.1, 2.2, 2.3
Not in the labor force: 3.3, 3.4, 3.6, 3.7, 3.12, 3.13, 3.15, 3.16, 3.19
Employed elsewhere: 4.2, 4.3, 4.4, 4.10
Future employees: 5.2, 5.3
The workforce elements tied to these element numbers can be viewed here: https://www.midwestworkforce.com/wv/workforce-elements
Childcare (or family care, which includes senior care) is one of 25 root causes affecting hiring. See: https://www.midwestworkforce.com/wv/root-cause-definitions. It impacts 10 of the 40 different workforce elements. See: https://www.midwestworkforce.com/wv/workforce-elements.
Here are a few things to consider.
1) Childcare can be solved externally, as a community effort, or internally, as a company-managed/supported benefit to employees.
2) These are the states with the highest share of females with children less than six years old in the labor force. The top 28 states are displayed, together with Utah, the 50th state. The 12 Midwest states are all among the top 27 states in the country in terms of labor force participation rate, with Minnesota at #1.
3) If the labor force participation rate of women with children is so high in many states, why is childcare still an issue? Quality and cost are often cited as problems. People are finding childcare, but it often erases a significant portion of the revenue they are adding to the total family income by working.
4) Keep in mind that there are childcare deserts as well as communities with a lot of capacity. You can find childcare data on the Resources page, located in the Root Causes section: https://www.midwestworkforce.com/resources/workforce-websites.
5) Be careful when reading the childcare literature if you suspect hype about a decline in the number of childcare businesses. The issue that needs to be tracked is the number of childcare spots, by location, and not the number of companies.
6) This issue disproportionately affects low-income families. If the cost of childcare offsets too much of an individual's new income or if the new income pushes the family income over a threshold (or benefit cliff) and they lose other income (e.g., SNAP benefits), then there may be no financial incentive for an individual to be employed and place their child in a childcare facility.
A: Some are pointing to COVID stimulus checks, excessive unemployment benefits, and more as to the cause of labor shortages. While these short-term factors likely played some role in the rapid reduction of labor availability, other causes have been building for years. Recently, four labor-related trends, all negative, started to align.
- The individuals at the peak of the post-World War II baby boom turned 65 in 2022. That means for the past decade and the decade to come, a large group of individuals is at retirement age, and fewer potential workers in the Gen Xers that follow. COVID accelerated the rate of retirement of the ‘Boomers.' This labor reduction trend will continue unless a significant number of Baby Boomers delay retirement or retirees re-enter the workforce.
- Net international migration to the U.S. peaked in 2016 and has sharply declined since. [1]
- After over five decades of growth, the female labor force participation rate leveled off and started to decline in 2000. This added to the seven-decade, slow decline in the labor force participation rate of men. [2]
- In 2007, fertility rates hit a local peak and have been declining steadily since. [3] This means the number of native-born 14-year-old individuals available to work hit a peak in 2021 and will be declining going forward. Though not a large factor today, it will adversely affect the supply of new people entering the workforce for the next decade.
In the short term, the only way to rapidly change this trajectory is for migration patterns to rapidly change, either domestically or internationally.
[2] https://fred.stlouisfed.org
[3] https://www.cato.org/blog/some-historical-context-fertility-decline
A: One of the biggest drivers of the number of people in the local labor force is the local population. [1] Unfortunately, population growth in the Midwest is not keeping up with the rest of the country.
The two drivers of population change are natural change and net migration. Natural change is live births minus deaths. Fertility rates in the U.S. have been declining for over a decade, which has had a negative impact on the rate of natural change. Even if fertility rates jumped tomorrow, it would be decades before there would be a substantial impact on labor availability. Mortality rates have also increased due to the aging population and, more recently, COVID-related deaths. From July 1, 2020, to June 30, 2021, 73% of U.S. counties saw a natural decrease in the population. [2]
Net migration is the number of individuals moving into a region (county, state, or country) minus the number leaving the region. Suppose we choose a state as the region. In that case, individuals moving into the state from other U.S. states (out-of-state migration) and other countries (international migration) are key drivers of population growth. Individuals moving out of the state to another state or country (out-migration) is a driver of population decline.
Net domestic migration is out-of-state migration minus out-migration to other U.S. states. The rate of people moving from one state to another has been trending down for decades [3], but differences vary across regions. Over the past two decades, for every two individuals that the Midwest has lost due to net domestic migration, the Northeast has lost five people, the West has gained one, and the South has gained six. From 2000-2019, Illinois lost 12.1% of its population due to a negative net domestic migration. Michigan was next, losing 8.1%. [4]
The lone remaining population control is international migration. Unfortunately, the Midwest does not rank high in this measure of population change. The 12 Midwest states collectively have an average rank of #33 in the fraction of the population that is foreign-born. [5] Illinois tops the Midwest at 14.2% foreign-born, slightly below the U.S. average of 14.6%. Minnesota is next highest at 8.5%. South Dakota ranks last in the Midwest at 3.5%.
Low immigration rates impact the population in one other way. The fertility rate of foreign-born women is higher than native-born women, though this has been dropping over the past decade. [6]
[1] Discounting remote workers.
[4] https://www.newgeography.com/content/006773-two-decades-interstate-migration
[5] https://worldpopulationreview.com/state-rankings/states-with-the-most-immigrants
[6] https://cis.org/Report/Immigrant-and-NativeBorn-Fertility-2008-2018
A: Labor Force Participation Rate (LFPR) is the fraction of individuals available to work that are in the labor force (employed and unemployed). [1] It is one of the most important workforce metrics for the Midwest after population growth since it also tells us the fraction of the population that could enter the workforce. To understand where we might be headed, we'll look at LFPR in a couple of different ways.
The good news is that the Midwest has a very high LFPR. The bad news is that the Midwest has a very high LFPR.
First, the bad news. Since the LFPR is so high in the Midwest, it means there are fewer people not working that might be pulled into the labor force. With our slow increase in population, it is even more essential to understand the potential to pull these non-working individuals into the workforce. (See the Not-employed Workforce Elements.)
The good news is that Midwesterners want to work. The chart below shows the LFPR range, from worst to best, for Midwest states in each of two groups. [2] The states in the 'Northwest' Midwest have some of the highest levels of LFPR in the nation. This group includes Kansas, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin. States in the 'Southeast' Midwest have slightly lower LFPRs, roughly at the U.S. average. These states include Illinois, Indiana, Michigan, Missouri, and Ohio.
Overall, the Midwest LFPR has been trending down for two decades, similar to U.S. trends.
The U.S. LFPR for ages 16+ varies slightly by gender. The 2022 average LFPR for males is 1.2% below the 2019 average. The female LFPR is down 0.6% in the same period. The prime-age LFPR (25-54) for males has decreased by 0.6% in this timeframe, while the female prime-age LFPR has increased by 0.4%.
The U.S. LFPR varies by age group.
In 2022, 37% of those 16-19 years old were in the labor force, 71% of those 20-24, 82% of those 25-54, and 39% of those 55 and older. The chart below shows how the U.S. LFPR changed for these age groups from before the 2020 recession until now. [2] Specifically, the change from the 2019 average to the 2022 average. The good news is that the prime-age LFPR is back to pre-recession levels. The greatest drop is in the 55 and older age group.
Though the increase in the 16-19 LFPR is encouraging, it is important to point out that the LFPR for this age group is near the lowest level it has been at since 1950. Also, the number of individuals in this four-year window is very small compared to the number of individuals 20 and older. As such, the overall impact of the 16-19 LFPR on the total LFPR is small.
The 20-24 LFPR has been slowly declining since the mid-1980s. However, before the pandemic the 20-24 LFPR was increasing. This recent decline is not unexpected due to delays in schooling caused by the pandemic. An increase in LFPR may be possible after the effects of the pandemic subside. Given the number of individuals in this age window, the overall impact on the total LFPR would be small.
The prime-age LFPR has been declining since about 2000 until it started to increase around 2015. Could it now continue to increase? Possibly, but there are many reasons this has been on a slow decline. Reasons cited in the media and the literature include an increase in the number of individuals with a criminal record, an increase in individuals with a disability, increased drug addiction, individuals delaying marriage, lack of affordable child care, the decreasing fertility rate, individuals delaying when they have children, individuals assisting with elder care, Baby Boomer wealth transfer, increases in time-to-degree, low wages, early retirement, individuals seeking a work-life balance, more individuals seeking part-time work, and more. Since so many factors drive the slow decline in LFPR, it seems unlikely that a substantial increase in prime-age LFPR will occur soon.
The 55+ LFPR decline has been cited by many, especially recently with LFPR declines related to the pandemic. The chart below shows the LFPR for this age group since 2000. [2] A clear break in the LFPR occurred in 2009, likely related to the start of the Great Recession. The continued flat lining of the 55+ LFPR has been associated with the slow recovery from the recession and the early Baby Boomers (born in 1946) turning 65 in 2011. Given that the last Baby Boomers turn 65 in 2029, it's hard to imagine the 55+ LFPR will change significantly unless worsening economic conditions pull many retirees back into the labor force.
The Bureau of Labor Statistics makes 10-year projections on various labor-related items. Reference 3 highlights recent LFPR projections for 2031. For every age group discussed above, the 2031 projections are lower than the 2021 LFPR levels. These projections are based on long-term trends and do not try to account for short-term fluctuations that could occur, like a recession.
When looking at the LFPR changes of the different age groups of individuals, it is hard to believe that any sizeable change in the labor force participation rate will occur over the next five years without some significant economic event like a recession, continued high inflation, or the like. Given population growth concerns in the Midwest, organizations will likely need to target recruitment to specific subgroups of individuals within and not in the labor force to find sufficient talent.
[1] The civilian noninstitutional population excludes active-duty members of the military, those confined to correctional institutions, and those in residential care facilities.
[2] Data from www.bls.gov.
[3] See https://www.bls.gov/emp/tables/civilian-labor-force-participation-rate.htm.
A: I asked ChatGPT this question, and the AI answer is shown below in [brackets], together with my comments and data following.
[Finding teenagers to fill part-time jobs has become increasingly challenging due to several factors. One significant reason is the heightened academic pressures and extracurricular commitments that demand more of their time and energy, leaving less availability for work. Additionally, the competitive landscape for college admissions encourages teenagers to focus on unpaid internships, volunteer work, and other resume-building activities rather than traditional part-time jobs. The rise of the gig economy and online opportunities also provides alternative ways for teenagers to earn money, such as freelance work, content creation, or tutoring, which often offer more flexible schedules. Furthermore, parental concerns about safety and the overall work environment contribute to a decline in teenagers seeking part-time employment. Together, these factors create a complex environment that makes it difficult to attract and retain teenage workers in traditional part-time roles.]
I find it hard to believe that many companies hire teenagers for ‘freelance work’ or ‘content creation.’ The following are the reasons I have seen in the literature for the long-term decline in the teenage labor force participation rate.
Students volunteer more.
More females participate in sports.
Higher rates of high school graduation.
Competition from a rising immigrant population.
More students are focusing on college preparation.
The younger the age, the more transportation becomes a constraint.
Why work for minimum wage? I can take out loans and pay them back after college.
Manufacturing declines have pushed adults into the service sector, competing with youth.
Parents are providing more funding to their children, so there is less need for them to work.
In the past, there was often one parent employed and the other able to help with the teen's job issues. Today, there is a higher probability of a single parent or both parents being employed, which limits the time to assist teenagers with job-related needs.
What does the data say? The youth labor force participation rate (LFPR) has been declining since the 1970s. It has tended to remain level between recessions but then drops rapidly in recessions. Note that this data is for formal jobs and does not include informal jobs like babysitting, grass cutting, snow shoveling, etc.
Even when there is a sufficient supply of teenagers in a community, and employers are willing to hire them, the results are often not what is hoped for.
The LFPR of teenagers is lower than for the rest of the population, and it decreases as age decreases.
Teenagers often work part-time, part-year, or part-time for part of the year.
The unemployment level of teenagers is higher than for the rest of the population.
I estimate that for an organization with 300 Full Time Equivalent (FTE) employees, at most, one FTE is 14–15 years old.
If you look at the number of specific individuals (versus FTEs), you are a company with 1,000 employees, and you look like the U.S. average:
9 employees would be 14-15 years old,
13 employees would be 16-17 years old,
21 employees would be 18-19 years old, and
957 employees would be 20 or over.
Essentially, only 4 of 100 employees would be a teenager.
A: Some, but keep in mind that several factors are at play.
1) The Midwest Workforce Index suggests that the month-to-month changes in many of the workforce indicators have subsided. Unfortunately, many indicators that make up the index are at two-decade lows. For example, this graph shows unemployment in the Midwest census region. [1] The June and July 2022 unemployment rate in the Midwest was the lowest it has been since 1976.
2) Industries such as retail, restaurants, travel, tourism, and a variety of manufacturing subsectors tend to be more negatively impacted by an economic slowdown than industries like food manufacturing, insurance, education, utilities, healthcare, and government. The industry mix in your community will affect the number of layoffs and the availability of labor.
3) Demographics is another factor (see the population pyramid FAQ). The Baby Boomers are retiring, fewer young adults are entering into the working-age population, and immigration has been declining. See the graph below for the entire U.S. [1] This plateauing in the number of working-age individuals should dampen the effect of a slowdown on layoffs. Your local conditions may be better or worse than conditions elsewhere in the Midwest based on your local demographics.
4) The skill sets of new individuals looking for a job may differ from your needs. This would reduce any potential gain in the available workforce.
5) A recent behavior I have observed in some companies is what is referred to as labor hoarding. [2] Holding on to employees even with a reduction in the need for labor, possibly out of fear of not finding employees once the softening of the economy ends.
Some companies keep a larger than necessary workforce but limit the hours for some of the staff. Others assign employees tasks that were never fully taken care of when the economy was doing well. The business case must be made to take on these additional costs versus the accrued savings from completing the tasks, any reductions in layoff expenses, and reductions in new hiring once the slowdown ends. See the other FAQ on labor hoarding.
The most important thing to remember is that when any slowdown ends, the Midwest will likely be back in the same situation we were in before. Any workforce planning you do today, even with a slowdown, will benefit you when the economy rebounds.
A: One undercurrent that often surfaces is the perception that HR needs to market more. This often leads to brainstorming sessions on ideas for more marketing – more billboards, etc.
Running neck and neck is resistance from an individual in a department with the most likelihood of more work. Resistance can come from the head of operations, the plant manager, or even from HR. Changing processes may lead to more work for their department, even though work may be reduced across the organization.
A great example is moving from hiring only full-time employees to part-time staff. Hiring more part-time employees can increase work for HR staff and make scheduling more complex on the plant floor. However, it can also lead to a large increase in applicants. ​
A: For the research completed to date (22 of 40 workforce elements), Expertise/ Learning/ Training and Targeted Marketing are the root causes that influence the greatest number of workforce elements. [1] The bar chart shows the ranking of all 23 root causes. This chart only highlights the relative number of linkages between the different types of individuals (workforce elements) and what is constraining them from working or being retained (root causes). A given root cause impacts different workforce elements to different degrees.
A few comments:
- Targeted marketing is important because different types of people are best reached in different ways. However, despite its importance, marketing is the last step in the Workforce Vector process. If root causes are not addressed, marketing may be futile. Even if there is success in hiring, reduced retention may lead to added costs.
- I've observed internal policy restrictions as a constraint in most of the companies I have worked with. Companies live with policies that were developed years earlier, and that may have become irrelevant ... but the old decisions live on. A perfect example is, "We only hire full-time staff.' Companies have policies like this because scheduling is easier, HR has fewer people to process, etc. Given that about 20% of all employees are part-time workers, policies like this limit the size of an organization's potential workforce pool.
- Project Management and Project Selection/ Scope rank low because they predominantly affect 'virtual' people. By virtual people I mean getting more work accomplished with no more people through Automation and Continuous Improvement. Essentially, you are getting more work accomplished as if you had hired more individuals.
[1] Root cause research is not yet complete. As the Root Cause Matrix is developed further, this result may change.
A: There are a lot of issues affecting labor availability, but one of the most significant drivers is the fraction of the population that works. This chart displays the prime-age (25-54 years old) Labor Force Participation Rate (LFPR) for males and females in the 50 states. The orange crosses show the average of the states in each region (*).
What does this chart show?
- About nine women are in the labor force for every ten men.
- There are about two women who are not in the labor force for every one man.
- The Midwest leads the country in the fraction of both sexes in the labor force. There just are not many people left to hire.
- Combining both sexes, South Dakota, Iowa, and Minnesota have the most people in the labor force, at over 89%.
- The states with the highest fraction of men in the labor force are North Dakota, Kansas, Utah, Iowa, and Minnesota. These are the state averages, which means in some counties in the U.S. there could be more than 95% of prime-age males working.
- The states with the highest fraction of women in the labor force are South Dakota, Minnesota, Iowa, Nebraska, and North Dakota.
- Vermont, South Dakota, Nebraska, Alaska, and Minnesota lead the way in gender work parity, with over 92% of women in the labor force compared to the men in the labor force.
- The Midwest and the Northeast are above the national trend in the number of women in the labor force. The West and South fall below the trendline.
- Comparing regional averages, the Male LFPR in the South is 5% less than the Midwest. The Female LFPR is 7% less.
Essentially, there are few people left to hire in the Midwest and Northeast. More people are available in the West and South, but they are not in the labor force. The people who are not working are not working for a variety of reasons. Some of the issues are:
- The jobs are not where the people live, given the need for reasonable commutes and affordable transportation.
- Some individuals have disabilities that prevent them from working.
- Some individuals have sufficient income from family members and savings that they do not need to work.
- The cost to work (clothing, day care, transportation, government benefit cliffs) often is too large compared to the revenue from work, especially in low-wage states.
- Women work at a much lower rate in some states, especially in the West and South.
- In summary, companies and communities are not addressing the 25 root causes that keep people from working. See https://www.midwestworkforce.com/wv/root-cause-definitions.
There are five broad talent categories to consider when trying to grow: 1) get more output from current employees, 2) retain current employees, 3) pull more people into the workforce, 4) attract people to your organization who are employed elsewhere, and 5) build the workforce of the future. A focus on strategy three might be best for many southern states, while strategies one, two, and/or four might lead to better results in the Midwest and Northeast.
(*) These are the Midwest and West Census regions. Delaware, Maryland, and Virginia have been moved from the South Census region to the Northeast region since these states behave more like Northeast states in many of their labor demographics, and to get roughly one-fourth of the states placed in each of the four regions. The data is from 2023.
A: Organizations have a vision and strategies for their entire organization, but most do not have a workforce vision and workforce strategies designed for future workforce realities. This is not an HR problem. The entire company has to be on board with how the company needs to change to win the competition for talent.
A great example of this is the company that asked their engineering team to learn more about the issues facing the U.S. and the opportunities to ‘Turn 90 degrees.’ Leadership wanted engineering to design future products requiring fewer people to build their product, fewer to install their product, and fewer to address warranty issues.
A: There is always a chance for errors, in general, but especially so in research studies. The Workforce Vector is a new way to look at workforce, and the research and data analysis are ongoing.
Over one-half a million numbers are imported into the website database, and it takes many millions of additional numbers to make all the necessary calculations and estimations to get county-level estimates.
If something looks wrong, there is a slight chance it is wrong. Please drop me a note, and I’ll investigate it and get back with you.
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I will be posting more Q&A over the coming months.
Please email me if you have a specific question you would like answered.