Exploring the Labor Landscape and Workforce Challenges

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By The VCU Wilder School Office of Research and Outreach
January 8, 2023

Recent news has told us that the United States is facing a labor shortage, with more jobs available than employees able to fill them. With the labor force participation rate currently at 62.8 percent, compared to 63.3 percent in February 2020 and 67.2 percent in January 2001, the decline in participation is not a new development.

Reasons for this shortage include:

• An aging workforce,
• Early retirements,
• Lowering levels of migration to the United States,
• A lack of access to childcare and
• An increase in the number of individuals starting their own business rather than working for others.

New reasons for the shortage exist as well. For example, the stimulus checks provided during the pandemic caused some to earn more while on unemployment than they did while working. This further decreased motivation to join the workforce.

To better understand the labor landscape, Virginia’s Secretary of Labor Bryan Slater discussed a spectrum of contemporary workforce challenges, including the mounting challenges filling positions across the commonwealth of Virginia and beyond, during a recent Wilder School Lunch and Learn. Secretary Slater also shared solutions to meet current and emerging workforce needs.

To help address the labor shortage in Virginia, Secretary Slater and his team are working to consolidate over a dozen key workforce components into a single agency. This agency will incorporate multiple programs and initiatives, including:

• A new program using career forecasting to help fill critical gaps in the public, healthcare, IT and manufacturing sectors,
• Creating a single location where employers and potential employees can access workforce and employment resources,
• Incorporating national recognition programs to honor certifications and licenses from other states,
• Standardizing performance metrics across each of Virginia’s workforce programs and executive branch,
• Investing in trade apprenticeship programs and expanding trade apprenticeship programs to new areas with new target populations and
• Eliminating college degree requirements in an effort to fill critical positions across Virginia, which will now place experience, certifications and training on equal footing with a college degree.

Ultimately, Secretary Slater and his team are working to ensure a good fit between what skills businesses need and what skills potential employees have to offer. “Jobs filled is the key metric we really want to focus on,” he said. “Our focus is to train the businesses’ needs. As I like to say, ‘who’s hiring?’”

In addition to the Lunch and Learn, the Wilder School has explored labor and workforce developments and challenges through the Wilder School Commonwealth Poll, with a particular focus on reasons for lower levels of employment and the extent to which college graduates feel prepared to enter the workforce.

The January 2022 Commonwealth Poll asked participants: “Data from the U.S. Bureau of Labor Statistics shows that an unusually high number of Americans are voluntarily leaving their jobs. Which one of the following do you think is the primary cause of this behavior?” Participant responses included:

• Americans receiving an increase in unemployment benefits from the government (36 percent),
• Americans reassessing their lives and their priorities in terms of work and family (24 percent),
• Low wages (14 percent),
• An increase in the number of jobs offering remote work (8 percent), and
• Fewer available workers due to Coronavirus cases and caregiving (6 percent).

An additional nine percent felt that the high number of people leaving their jobs was occurring for other reasons not mentioned.

This poll obtained telephone interviews with a representative sample of 800 adults, ages 18 or older, living in Virginia from December 13-20, 2021. A two-stage weighting procedure was used to weight this dual-frame sample by the demographic characteristics of gender, age, education, race, ethnicity, Hispanic origin, region of residence and personal phone use. The overall margin of error for the poll was +/- 4.90 percentage points.

In another effort to learn more about workforce challenges in Virginia, the August 2023 Commonwealth Poll asked participants: “In your opinion, do you agree or disagree with this statement? College is preparing students for the workforce.” Overall, 55 percent of participants agreed that students are prepared for the workforce after college and 38 percent disagreed. The remainder were unsure or said that they had no opinion.

This poll obtained telephone interviews with a representative sample of 804 adults, ages 18 or older, living in Virginia. Telephone interviews were conducted by landline from July 14-25, 2023 and had an overall margin of error for the poll was +/- 5.46 percentage points. This poll used the same weighting procedure as the January 2022 poll.

Considering demographic breakdowns, those under 34 years of age, females, Democrats and racial and ethnic minorities were most likely to agree that colleges in Virginia are preparing students to enter the workforce.

Looking ahead, universities, governments and employers will likely continue to face challenges in matching employee skills to employer needs. Creative solutions such as those proposed by Secretary Slater can help fill these gaps, while public policy polls can help provide policymakers and educators with the information they need to promote a healthy labor landscape for all.

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Author: The Wilder School’s Office of Research and Outreach advances research and training that informs public policy and decisionmaking to improve our communities. Drawing on the wide-ranging expertise of Wilder School faculty, we provide services including leadership development and training, economic and policy impact analysis, survey insights and program evaluation to clients in governments, nonprofits, businesses and the public, across Virginia and beyond. Twitter: @VCUWilderSchool

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