Workforce Participation Shortages

3/23/2022
 
 Employment Trends
 Wages and Benefits
 State Government Workforce
 Changing Nature of Work

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State economies face growing workforce participation challenges as the number of job openings continues to outpace the number of workers available to fill them. While the nation’s overall population continues to grow, the number of working-age adults is shrinking for the first time in decades. Furthermore, job seekers report struggles finding job openings that match their skill sets and that offer adequate pay, benefits and flexibility. While this trend existed before the emergence of COVID-19, the pandemic’s unprecedented disruption to employment has greatly accelerated these challenges. If workforce participation shortages continue, and many indicators suggest they will, they may threaten the economy’s ability to meet consumer demands, leading to higher prices and strained public services.

State policy can play a pivotal role in addressing the workforce participation crisis, including:

  • Bringing historically underrepresented populations into the labor force.
  • Expanding access to higher education and workforce development programs to better match job-seeker skills with employer needs.
  • Identifying strategies to increase wages and benefits in a 21st century workplace.
  • Improving systems designed to keep workers in the workforce, including addressing mental health needs and accommodations.
  • Updating state government employment practices to ensure states can attract high-quality workers to support public services and programs.