Heartland Forward report highlights U.S. labor challenges, opportunities

Bentonville-based think tank Heartland Forward recently released a report showing that decades of declines in domestic manufacturing, demographic shifts and labor force participation preceded and exacerbated the ‘Great Resignation’ experienced throughout the COVID-19 pandemic.

The report, “The Labor Crisis and the Future of the Heartland,” was co-authored by Joel Kotkin, a senior fellow at Heartland Forward.

According to the research, the U.S. labor force participation rate has declined to 61%, from 64.7% in 2010 and its peak of 67.1% in 2000. The number of available workers for every job has fallen to 1.4, from four in 2012. The situation is unlikely to improve anytime soon as some project the labor force will shrink, and by 2060, so will the overall population.

“Workers have leverage not seen since [World War II], and they are choosing their jobs not only for income but for what their salaries can actually pay for in terms of housing, daily expenses, good schools and ease of commute,” Kotkin said. “In many ways, these new conditions play to the heartland’s strengths, such as a tradition of skilled labor and lower costs, which make blue-collar and middle management positions more rewarding than in highly-priced locales.”

The report shows ways business, education and policy leaders can work together to reshape the workforce. Following are some of the ways identified in the report:

• Invest in training: Workforce training programs are critical for preparing communities for investments from semiconductor, automobile and electrical vehicle component manufacturers looking to build factories.
• Build pipelines for students: Middle-skill jobs, or those requiring more than a high school diploma but less than a bachelor’s degree, are among the most in-demand.
• Tap into the immigrant workforce: Immigrants, including recent refugees arriving from Afghanistan, have moved to labor-short, lower-cost cities such as St. Louis instead of higher-cost states like California.

“Unlike white-collar business service or tech firms, manufacturing and healthcare businesses need workers with specialized skills who can’t do their jobs remotely and require in-person training as well,” said Ross DeVol, president and CEO of Heartland Forward. “This is an area of great opportunity. Many heartland states like Nebraska, Minnesota and Ohio are already doing commendable work by investing in job training programs and pipelines for crucial industries. This report offers well-reasoned analysis and actionable advice for those looking to come out on top of the new labor market.”

For a PDF of the 48-page report, click here.