Combat the Labor Shortage
Thank you for reading as we continue the Knecht-Four Point Plan to Cut Living Costs. We already discussed the importance of reducing Minnesota’s tax burden. The second step to reduce living costs in Minnesota is to combat the labor shortage, specifically by increasing the workforce participation rate and closing the skills gap.
We’ve all seen the “help wanted” signs around town as local businesses struggle to fill available positions. Recently, I went to Qdoba and the dining room was closed because they didn’t have enough help. Then I went to a Chipotle in Minnetonka and that dining room was closed because they didn’t have the help. Days later, a friend told me their son went to not one, but two Taco Bells the other night and both were outright closed due to staff shortages. When you can’t sit down to eat a burrito or get late-night Crunch Wrap Supreme because of staffing issues, you know we are in crisis mode.
We need to take steps to combat that labor shortage and that starts with (1) increasing the workforce participation rate, and (2) closing the skills gap.
Increasing the Workforce Participation Rate
Minnesota’s workforce participation rate is still lower than it was pre-pandemic. Historically, we had one of the highest workforce participation rates in the country and pre-pandemic it stood above 70%. Now, we have a workforce participation rate in the 60s and the state is down over 100,000 workers since 2020. The low workforce participation rate is leading to deceptive unemployment numbers as less people that could work are actively searching for a job and people not actively looking aren’t considered unemployed.
We need to increase the workforce participation rate that has been declining for several years. There are several ways to improve the labor force participation rate:
- Reduce dependency on alcohol, opioids, and other drugs
- Help the long-term unemployed return to the labor force
- Encourage companies to expand access to paid family leave
- Lower childcare costs by reforming licensing rules
Closing the Skills Gap
While the labor shortage has become readily apparent in our daily lives, certain business sectors have had trouble filling roles for years due to a skills gap in certain industries. The pandemic and economic uncertainty exacerbated the issues and now we are experiencing a massive skills gap for some of the most in-demand positions.
For example, there are not enough Americans with the specialized training necessary to fill a modern manufacturing job. One recent study found that more than 2.4 million American manufacturing jobs will go unfilled from 2018 to 2028 due to the skills gap and retirements, potentially costing us $454 billion in economic output in a single year. This is unacceptable.
To help address the skills gap, Minnesota can invest in more apprenticeship and training programs for the most in-demand positions. This includes the skilled trades – such as carpentry, construction, plumbing, electricity, and advanced manufacturing. We should also recruit and retain more healthcare workers and police officers, especially with the Twin Cities facing an explosion in violent crime and its spread to the suburbs.
Combat the Labor Shortage
We are facing a labor shortage and there’s plenty elected officials can do to help – starting with closing the skills gap and increasing the workforce participation rate.