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MYTHBUSTER: Work
“People don’t want to work” is a phrase that we hear frequently, and it’s an interpretation of the incredibly “tight” labor market that companies and people in our community are seeing these days. However, this doesn’t seem to line up with the labor market data that we have available, and it’s worth breaking this down.
Right now, the U.S. labor market is “tightening,” where the companies are struggling to fill open positions, as opposed to a “slack” labor market where there are plenty of interested people available to work for each open position. A characteristic of tight labor markets is a low unemployment rate, where most people that want jobs are employed. Labor markets in Ada as well as nation-wide have been tightening since the 2008 recession, and have remained tight except for a brief, pandemic-induced period of high unemployment in the Spring of 2020.
The COVID-19 pandemic has introduced several key changes to our labor market. While older workers in the baby boomer generation have been retiring gradually over the last decade, many older and more experienced workers retired during the pandemic. Another phenomenon was the federal government’s response to the economic disruption of the pandemic, where relief and stimulus funds were deployed to millions of Americans with the intention of lessening the economic fallout of the pandemic recession of 2020. Finally, the shift in consumer spending in the pandemic away from live experiences to a life spent closer to home created a shift in the demand for products and services, as well as a demand for new jobs.
The myth that people do not want to work appears to be based on the idea that people can afford to not work, due to expanded stimulus and unemployment funds in 2020 and 2021. Combined with the difficulty companies have faced in filling job positions, the idea has persisted that our labor shortages are caused by a lack of interest from individuals, rather than a demographic shift of older workers retiring and an increased demand for new employees.
The data from Ada tells an different story. Not only are people working in Ada, but an all time record number of people are currently employed in the Ada-region of Pontotoc County. According to the Local Area Unemployment Statistics from the Bureau of Labor Statistics, 19,039 people were employed in Pontotoc County in October of 2022, a figure higher than any month before the pandemic. This has echoed a national trend of increased employment in 2022. Last week, the BLS reported an increase of 263,000 jobs in November for the U.S. Source: U.S Bureau of Labor Statistics.
However, there may be some signs that this growth may not be sustained. The national labor force participation rate has remained near 62% and the labor force growth in Pontotoc County has been relatively flat in recent months. The growth in employment has not necessarily pulled more working age people into the labor force. Recent announcements of layoffs have created a sense of concern that our local and national economy could be at risk of heading into a recession, especially if demand for goods and services drops off suddenly in the coming months.
At the close of 2022, Ada has a record number of people working. However, it is also true that companies are struggling to fill positions, and jobs such as teaching or skilled trades still may not pay high enough wages for the skill and difficulty required for those working in these fields. One of the best ways to ensure that Ada’s economy remains strong is to ensure our workforce development system continues to help train and guide people who can work in critically important industries in Ada, such as Manufacturing, Healthcare, IT, and STEM. It’s crucial that both our employers as well as our education systems work together to help proactively create these career pathways. Ada is a designated Oklahoma Center for Workforce Excellence, and the Ada Jobs Foundation is excited to have an opportunity to play a role in this process by convening partners, providing research, and financial incentives. We’re passionate about making Ada an excellent place to do business and making sure our companies can access the talent they need to grow and thrive.
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