Lots of quitting, child care and more: Takeaways on Kentucky's complex spring labor market

LOUISVILLE, Ky. — In February, Kentucky had its highest participation in the labor force since the onset of the coronavirus pandemic in March 2020, according to the most recent data from the U.S. Bureau of Labor Statistics.

Roughly 2.06 million Kentuckians were employed that month. And the labor force participation rate — the percentage of the population ages 16 and older that are either employed or unemployed but seeking work — has grown a whopping 3.3% from the doldrums of summer 2020.

The dissipating of the omicron variant, combined with many open jobs, has led to a gradual increase in labor force participation.

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Yet Kentucky is still short a few thousand people employed from when the pandemic began and still has thousands of available jobs. Experts have said a number of issues, from a lack of affordable childcare to more employees quitting their jobs, have made it hard to reach full recovery.

Here are five takeaways on the Bluegrass State's complicated current labor market.

Workforce participation lags behind other states, hasn't fully recovered

As of February, Kentucky's workforce participation rate was at 58%, a drastic improvement from June 2020's historically low 54.7% rate.

But the Bluegrass State lags behind other states in the proportion of how many people it has working or seeking work.

Kentucky has the seventh-lowest workforce participation rate in the country, only ahead of Alabama, Arkansas, Mississippi, New Mexico, South Carolina and West Virginia, according to the Bureau of Labor Statistics. The country's average workforce participation rate for February was 62.3%.

To increase that workforce participation rate, Kentucky must address "the reasons people are not working, and not actively looking for work," said Sarah Ehresman, the director of labor market intelligence for KentuckianaWorks, the Louisville area's workforce development board.

"It is important to remember there are perfectly valid reasons to drop out of the labor force," she wrote in a March labor market update. "Since the workforce participation rate reflects all people age 16 and over, it shouldn’t be too surprising that nearly 60% of individuals not participating in the labor force are either retired or in school."

State lawmakers hope reducing unemployment benefits helps

One potential solution to job recovery the state Republican supermajority put forward this legislative session was to significantly restrict eligibility for unemployment insurance benefits.

Under House Bill 4, sponsored by state Rep. Russell Webber (R-Shepherdsville), the number of weeks unemployed Kentuckians are eligible for those benefits would be reduced from 26 to anywhere from 12 to 24 weeks — with the exact time period indexed based of the statewide unemployment rate from nine to 12 months earlier.

The Kentucky Chamber of Commerce was a strong supporter of the legislation. Kate Shanks, the chamber's senior vice president of public affairs, told a House committee in February that "we can’t become known as a state that is short on workers," and "this is a huge issue for us to tackle.”

The bill passed through both chambers in March, with Republicans in each chamber joining Democrats in opposition. Kentucky Gov. Andy Beshear, a Democrat, vetoed the legislation, calling it a "cruel bill that treats fellow Kentuckians in ways that do not meet our faith and our values."

Both chambers overrode the veto on March 21, with HB 4 going into law once it was delivered to the secretary of state on March 22.

Lack of child care options serves as major barrier

For years, a lack of affordable and high-quality child care options has presented an issue for working parents, particularly mothers. The pandemic only made it worse.

Nearly 100,000 Kentucky women left the workforce during the pandemic because of school closings and care issues, according to data from Louisville nonprofit Metro United Way.

Kentucky has had a long downward trend in the amount of child care centers it offers to families. Between July 2012 and July 2021, the commonwealth recorded a net loss of 1,729 child care centers, amounting to a 46% decline, according to the Kentucky Center for Economic Policy, a progressive think tank.

Amy Neal, the executive director of the Governor’s Office of Early Childhood, which serves as an umbrella organization to help unify the state's approach to child care, said high-quality child care "really does build the workforce of today and tomorrow," as it "supports working families, ensures that all of our children in the commonwealth have a strong start in school and life and helps grow Kentucky's economy."

Quit rates are lower than before, but still higher than national average

In August 2021, Kentucky had the highest quit rate — the total number of workers who quit during an entire month as a percent of total employment.— of any state in the nation with a quit rate at 4.5%, as 84,000 Kentuckians left their jobs that month.

The plight recently has not been as tough. According to the most recent state-level data from the Bureau of Labor Statistics, roughly 64,000 Kentuckians left their jobs in January for a quit rate of 3.3%. That puts Kentucky leagues ahead of where it was months ago. But it still falls short of the national average of 2.8%.

Kelly Hannah, the market director for staffing firm Robert Half's Louisville operations, previously told The Courier Journal that with so many job openings in Louisville and nationwide, "there's just a ton of movement in the marketplace:"

"If you wanted to dive into a different career, or dip your toe into the water of a different industry, it seems like now is the time because so many people are hiring, and they're willing to take a chance on people who might not fit their background perfectly," she said.

Attraction, retention top priorities for Louisville-area chamber of commerce

Sarah Davasher-Wisdom, the president and CEO of Greater Louisville Inc., the Louisville-area chamber of commerce, touted during the chamber's annual meeting in March that the Louisville area has seen $140 million in economic investment so far in 2022.

But, in order for these investments to keep coming, Davasher-Wisdom said the Louisville business community needs to do more to attract, retain and develop workers.

"If we don't prove that we have people to fill jobs, we won't keep getting these big job announcements," Davasher-Wisdom said. "The biggest challenge facing businesses right now is a shortage of talent."

She highlighted the chamber's Live in Lou initiative, which touts Louisville's relative affordability to other major cities and entertainment options as well as jobs, as a way to help achieve these goals.

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Contact Ben Tobin at bjtobin@gannett.com and 502-377-5675 or follow on Twitter @Ben__Tobin.

This article originally appeared on Louisville Courier Journal: Kentucky jobs: 5 takeaways on the state's labor market shortage