States face historic workforce challenges

Virtually every sector in the American economy is plagued by a massive shortage in workers.
FILE – In this May 8, 2020, file photo, a nurse holds her back as she walks down a hallway in the COVID-19 Intensive Care Unit at Harborview Medical Center, which is part of Seattle-area health care system UW Medicine, in Seattle. (AP Photo/Elaine Thompson, File)

A decade ago, in the aftermath of the Great Recession, governors in states across the nation spent much of their time recruiting businesses from other states. Economic development corporations paid for billboards advertising lower tax rates or a better business climate in the state next door. Every new headquarters, factory or outpost was worth bragging rights.

Today, states are trying to poach a different commodity from their neighbors: The workers who will staff those jobs.

Virtually every sector in the American economy is plagued by a massive workforce shortage, a deficit of workers that creates vacant classrooms, understaffed hospitals and empty tables at restaurants. Policymakers who once bid for businesses are now scrambling to make sure those businesses can find the workers they need to operate.

“The state that has the workers will be the state that wins the economic race,” South Dakota Gov. Kristi Noem (R) said recently, touting a national workforce recruitment ad she said had attracted nearly 2,500 new residents to her state.

The worker shortage existed before the pandemic, though staffing needs have shot through the roof as more workers find better-paying positions, as Baby Boomers retire and as new jobs come into being. In January 2020, there were about 7.2 million vacant jobs in America, according to the Bureau of Labor Statistics. 

In June 2023, more than 9.5 million jobs were unfilled. At the same time, just 6 million Americans are seeking work.

Workforce shortages are especially acute in the health care sector, where there are more than 1.8 million vacancies. The lack of doctors, nurses and mental health professionals has had a profound effect on the availability of beds, at a time when mental health services are desperately needed.

“I’ve got one of the state mental hospitals in Wichita Falls. We’re 300 people short right now, employee-wise,” Texas Sen. Drew Springer (R) told Pluribus News. “That means we’re 200 beds short. So we’ve talked about building new hospitals, new beds. I can’t even staff the one I have.”

State lawmakers are viewing the workforce shortages through both a short-term and long-term lens — attracting workers now, and building a pipeline that will produce qualified workers over longer horizons.

Vermont and West Virginia have programs that offer incentives to workers who live in other states. Noem’s program in South Dakota connects job seekers with employers who need workers. 

Other states have sought to make work-life balance more appealing. Eleven states and the District of Columbia require paid family leave; Maine lawmakers passed a new family leave program earlier this year that will take effect in the coming months. 

Over the longer term, states have sought to bolster community colleges and other training programs. Tennessee lawmakers established a College of Applied Technology, including one campus near a planned Ford plant that will manufacture electric F-series pickups and batteries. New Jersey established an apprenticeship program that will funnel future workers into water companies.

“We have to create more jobs, but we also have to build and create and develop our youth so that they can be able to work,” New Jersey Assemblywoman Angela McKnight (D) said.

Pennsylvania Gov. Josh Shapiro (D) signed an executive order late last month directing $400 million in federal funds to the Commonwealth Workforce Transformation Program, a first-of-its-kind scheme to reimburse worker training organizations up to $40,000 for each new worker they train. Shapiro said the program would create 10,000 new jobs — and, crucially, the workers to fill them.

“Look, if we want to grow our economy, we want to build big things again in the Commonwealth of Pennsylvania, if we want to create real opportunity for our people, we need to invest in our workers and expand our workforce right now,” Shapiro said

North Dakota Gov. Doug Burgum (R) has taken a different approach: His administration has proposed grants for businesses to purchase high-tech machinery that would automate certain positions — a stark turnaround from the days, not so long ago, when policymakers worried automation would eliminate too many jobs.

America’s classrooms are also beset by a troubling shortage. One study from researchers at Kansas State University and the University of Illinois Urbana-Champaign estimated that 36,000 teaching positions are vacant across the country, though exact figures are impossible to come by. 

The Bureau of Labor Statistics reported 309,000 open positions in state and local education, though those include jobs beyond teaching.

“We have a terrific problem with teacher retention and recruitment,” former Alaska Senate Minority Leader Tom Begich (D) said. “The idea is to create a comprehensive approach to ensure that we can grow our own teachers and also have the ability to recruit teachers.”

At least nine states passed legislation this year raising teacher pay, from conservative Arkansas, Florida and Idaho to liberal Maryland and Washington.

The job market has showed some signs of cooling, as the Federal Reserve raises interest rates. The number of open positions available throughout the nation, while still historically high, has fallen from a post-pandemic peak of 11.8 million in December 2021. 

But one area where the number of vacancies is still rising is in government itself, as states struggle to fill many positions left vacant by retiring Baby Boomers who have held those jobs for decades. BLS data shows 970,000 vacant state and local jobs, about two-thirds of which are non-education positions. That is up from the 865,000 open positions recorded a year ago.

To fill those empty posts, states have loosened civil service requirements. Six states — Alaska, Maryland, Colorado, Pennsylvania and Utah — have dropped higher education requirements for most jobs in their workforces.

“Everywhere we would go, everyone would want to talk about the labor shortage,” said Mike Ricci, who led communications for former Maryland Gov. Larry Hogan (R), who cut degree requirements during his final months in office. “It was an issue of not enough people to meet new challenges.”