NEW ALBANY — Local job growth continues to slow to its lowest rate in over five years even as the nationwide economy remains in good shape.
Indiana University Southeast Sanders Chair in Business Uric Dufrene first revealed that local companies were failing to add jobs as fast as they once were at the college’s annual economic outlook breakfast in November.
At IUS’ mid-year economic update on Wednesday, his message was the same.
“Some of these numbers are going to surprise you,” warned Dufrene. “Actually, I was quite surprised looking at the most recent numbers for Southern Indiana, but it’s the data, so don’t shoot the messenger.”
Dufrene originally predicted in 2017 that the Louisville metropolitan area’s economy would add 20,000 jobs that year. Instead, only 5,000 jobs were added in 2017, down from 12,000 in 2016. (The Louisville area includes eight counties in Kentucky and five in Indiana: Clark, Floyd, Scott, Harrison and Washington).
Of particular concern, the manufacturing and education/health services sectors experienced job growth lower than the area’s overall growth.
In the third quarter of 2017 in Southern Indiana, 700 jobs were added with most of the positions going to health care. Manufacturing jobs increased only slightly and transporation/warehousing jobs actually declined.
This is all happening in the area while the country is experiencing strong job growth and higher increases in Gross Domestic Product, Dufrene said.
The reason why Dufrene believes the area is seeing low job growth is the same one he presented in November: a sickly labor force. Essentially, there aren’t enough workers in the area to support the jobs.
For evidence, Dufrene says to look to job postings for transportation positions in the area. There were more openings for those types of jobs in 2017 than any other category, according to data from Burning Glass Technologies, but — in Clark County at least — the sector is simultaneously losing the most jobs: about 400 in the third quarter of 2017.
“I would suspect the fact that we have job postings and we also have job declines, we simply can’t…fill those positions,” Dufrene said.
Dufrene advocates for two ways to help the area revive its job growth. The first is an increase in post-secondary degree attainment. Currently, Clark County’s bachelor’s degree attainment level is below the state and national levels, while Floyd County’s is only below the national level. At the same time, employment rates are growing the most for United States residents with their bachelor’s degrees.
Dufrene also believes that increasing quality of life in Southern Indiana could solve the area’s labor force issues. Not only will making the area a more attractive place to live keep residents in the area, but it should also bring in more outsiders to Southern Indiana.
“[There are] lots of good things happening right now,” Dufrene said. “I don’t want to take away from that, but we’ve got to continue to make investments.”
Several government officials attended Dufrene’s economic update, including Floyd County Commissioner Mark Seabrook, who was far from blindsided by Dufrene’s statistics.
“I think these charts today show what you see everyday when you walk out,” he said.
Just the other day, Seabrook visited a restaurant and saw a sign advertising open positions for cashiers, receptionists, waiters, cooks and bus boys.
Rep. Ed Clere, R-New Albany, who also attended the economic update, said he sees a solution to the labor force issue in workforce development initiatives.
Currently, the area’s chamber of commerce, One Southern Indiana, has committed an entire program and position for workforce development. Clere would like for any initiative created in the area to look at the issue long-term and to treat labor force shortages holistically rather than just business by business.
“When we start to view workforce that way, then we’ll begin to solve the problem that we’ve discussed,” he said.
Clere agreed that improving quality of life in the area is also an ongoing goal.