The labor shortage hit Kentucky hard.
A recent report indicated that the state had one of the highest quit rates nationwide in August, along with one of the highest job-opening rates. Months later, the state was still near the top of the list for most unfilled job openings.
Insider spoke with more than a dozen Kentuckians to uncover what's powering the shortage and how it could be solved, and spoke to representatives from both the Democratic and Republican sides of the aisle in the heavily conservative state. Rep. John Yarmuth, a Democrat who chairs the House Budget Committee, argues there's a role for the federal government to ease the shortage. We also interviewed Yarmuth's Republican colleague James Comer, whose district covers the western part of the state.
Yarmuth, whose district includes Louisville, said he's heard many complaints from local businesses about the labor shortage but not from constituents themselves, and that employers "are complaining, but they don't really have any ideas for what the government could do to make their jobs any more appealing." As for his Republican colleagues, he said he hasn't talked to any of them about solving the labor shortage. The Louisville area is thriving by paying workers more, though. "There are lots of opportunities in my district."
Yarmuth is retiring from Congress next year.
Here's a transcript of Insider's interview with the representative, lightly edited for brevity.
During the pandemic, the quit rate in Kentucky was especially high — the highest in the country for a while — and the Kentucky Chamber of Commerce foundation said the state was in a "workforce crisis." What do you think of that?
I think to an extent we're in the same boat that many other places are in. We had healthcare fears, we had concerns about the disease itself. We have and still have problems with childcare. And with school shutdowns, that was a big factor, with parents having to stay home and take care of kids.
This past year, in August, when we apparently led the country in percentage of job quits, we also had a very significant increase, and new people taking new jobs — actually more people taking new jobs than had quit. So that was a little bit of a mixed picture.
What that represented was essentially people understanding that they could do better, they found better jobs, quite simply. I mean, we still have a $7.25 minimum wage in Kentucky, and people realize that they could make $15 an hour, and they so they quit a job and took the better one. So in that respect, they were better off.
Those businesses that either refused to or have been unable to compete with Amazon distribution centers paying $15 to $18 an hour. So a lot of people left low-paying jobs. We've lost tons of restaurants in my district and jobs in the hospitality field. People are desperately in need of those positions.
So we got a big shortage, but it's not necessarily all bad news. Because a lot of people are doing much better now than they did before.
What do you think needs to happen for the labor shortage to end?
I'm very supportive of increasing the federal minimum wage, but it seems like, again, the market is actually taking care of a lot of that. I don't know that anybody right now can hire anybody under $11 or $12. I just don't think that job exists right now. So the combination of the pandemic and the need for more people has changed the equation. It's now very much a pro-worker environment, in terms of wages.
So I don't think that a federal minimum wage at this point would make all that much difference in terms of the labor shortage, because there are plenty of jobs available at $15 an hour — jobs that don't require high-level skills. We've got so many distribution and logistics jobs available in the area that if you want a $15-an-hour job, you can get one, basically, regardless of your skill level.
[My district is] just Louisville, but the surrounding counties obviously benefit from this. We got UPS as our largest employer, they have about 20,000 employees and they're hiring more people all the time. And they're paying in that $15- to $16-an-hour range and with benefits and with education benefits, and it's a pretty attractive place to work.
And then all the companies like Amazon and Zappos and others who have distribution centers around us are all in the same boat. E-commerce is has expanded so dramatically during the pandemic.
I don't think that's true of everywhere in Kentucky, certainly not true in Appalachia, there are not a lot of alternative jobs available. I think over half of our state is a childcare desert.
Can you talk a little bit more about that specific part of it?
Obviously, that's an element of childcare when you've got kids, 3- and 4-year-olds, go into school. [Addressing] that would be a significant help in resolving labor shortage.
It's not going to be immediate, but as a longer-term solution to labor shortages, I think that's a big factor.
Because clearly, the way the workforce is changing with more options available to work at home, and then you kind of make that judgment as to, "Well, am I going to take a job where I have to go to an office, and then I have to pay for childcare, or I can work at home and not have to pay for childcare?" That becomes a balancing act, and may contribute in some ways to the labor shortage. And because those people who might stay at home might otherwise take other jobs.
So I just think there's so many changes going on in the workforce that I think it's probably too early to figure out what the horizon is going to be three, four years from now — the landscape is going to be three or four years from now, because so many things are changing right now in terms of the nature of work, the nature of the jobs that are available.
And what we've seen is that the government's support, most of the studies show, it didn't make that much difference in people deciding to go back to work or not particularly when [unemployment benefits] went from $600 to $300.
The share of Kentucky residents working has actually been going down for almost 20 years. Why do you think it has gone this long without being addressed? And then do you believe that there are more factors at play here?
We've got an aging population, so I think you've got a lot of people who just aged out of the workforce or decided to retire when they could.
We have a ton of people in the state with bad health and disabilities. We have a very bad health profile.
I suspect that has something to do with it as well. Yeah, there are a lot of factors. I think it's pretty complicated.
(Editor's note: Kentucky is ranked as one of America's least-healthy states. A report from the United Health foundation placed Kentucky near the bottom for health behaviors and health outcomes.)
I would imagine that a lot of younger people are trying to seek other opportunities elsewhere. Is that a factor?
I suspect that in some parts of the state it is. I don't think that's a factor in my district. But my district is very unlike the rest of [the state]. It's a vibrant, significant urban area. And there are lots of opportunities in my district.
But I think in some places in the state, certainly, when you're talking about coal country, those jobs really aren't available anymore. They certainly aren't attractive. And I think a lot of those young people have left those areas to try and find better opportunities.
What are you hearing from your own constituents about the labor shortage?
I don't think we've heard much from constituents who are in the workforce. We've heard a lot from employers.
We have two big Ford plants in my district, and you know, part of that's cultural — there are young people nowadays who are not necessarily attracted to jobs where they have to stand on an assembly line all day, they'd rather have more flexible schedules. And they can make as much money being a barista as they can being an assembly-line worker. That's what I've heard from the management at Ford.
And we have what used to be the GE Appliance division, owned by a Chinese company, Haier. And they're saying the same thing, that it's hard to find people who want to take a job where they have to be on time every day and work a set schedule and that type of thing.
Do employers come to you with ideas for how to solve the labor shortage?
No, not really. I haven't heard any exciting ideas. Until a couple years ago, people were starting at Ford and had like, $13 an hour. And even though they probably could raise that rate pretty quickly, that wasn't a particularly appealing job to many of them. And those employers kind of recognize that they have to make those jobs more attractive.
For a while, we were hearing end-to-end that it's the unemployment supplement that's killing us, but that's quieted down and now it's more realization. People are complaining, but they don't really have any ideas for what the government could do to make their jobs any more appealing.
Have you had any communication with your Republican colleagues in the House or Senate about the labor shortage?
I haven't had any conversations about that with any of them.
The climate crisis is going to change how Americans work, and, ultimately, what jobs are available. So how do you see that playing out in your state where coal is still a significant part of the economy?
To be honest, coal is a very minor part of our economy, it's almost a nonfactor right now. I mean, I have more people employed in one plant in my district than are employed in the entire coal industry in the entire state. Only about 5,000 people are working in the coal industry, just inconsequential. It's less than 1% of the economy.
So the people in coal country are very much aware that coal is not a future opportunity for them, and they're going to have to find something else. So most of the emphasis has been to try and find ways to bring new industries to coal country, particularly Eastern Kentucky. But it's more of a cultural thing than an economic thing right now. And they all know coal is dead. But they love their region and they want to stay there and they're looking for help to bring industries there that can replace those jobs.
And if I may ask as well, like the child tax credit, as it stands right now, it's only one year and the House bill. Lawmakers are going to have to deal with that again, so how do you see the child tax credit playing out? Do you think that will help ease the pressure on families?
The reaction of my constituents from the extent from the refundable tax, child tax credit, and the increase in it was phenomenal. I mean, I had more people tell me that it changed their lives more than anything we've ever done.
It lifted tens of thousands of Kentuckians out of poverty, but obviously, if Republicans take over the the House or Senate, that's going to be very difficult to do. But I wouldn't say that it's a major factor in dealing with the labor shortage. It's a major factor in dealing with people's lives.