With the Atlanta region seeing continued employment growth, employers may need to leave jobs unfilled if they cannot find sufficient numbers of qualified workers.
Back in 2008-2009 during the recession, it would have been a question that would get you laughed out of a conference: Is the Atlanta region running out of workers?
From the end of 2007 to the beginning of 2010, the Atlanta area shed more than 200,000 jobs. Since then, the area’s employment has grown by more than 390,000. In October alone, the metro area recorded 32,400 new jobs.
For the 12 months ending in October, the Atlanta metro area’s 3.5% increase placed it as the largest percentage increase among the nation’s 10 top population centers, beating areas like Dallas and Los Angeles and far outdistancing the nation’s 2% employment increase.At the same time, as impressive as the job creation has
been, so far 2015 has seen a net increase of 9,100 fewer jobs compared to the
same period in 2014.
Are businesses in the Atlanta area creating fewer new jobs
simply because they are running out of good candidates to hire? If so, what
options are available to increase the pool of available workers?
Labor Force
Back during the depths of the recession, Atlanta’s labor
force (which the government defines as the number of workers employed plus
those unemployed but actively seeking work) hit a low of about 2.7 million
after climbing steadily over the previous 18 years. The drop off could easily
be explained by the large number of workers who, faced with unemployment, chose
instead early retirement or just became discouraged and dropped out of the
labor force.
It was expected that as the economy improved, those workers
would rejoin the labor force. Since that low point, labor force for the Atlanta
metro area has grown much slower than the number of new jobs. From 2010 to
2012, about 102,000 people were added to the area’s labor force. Since then,
only another 27,000 have been added in the past 30 months.
The slow growth in labor force is not confined to Georgia.
Looking forward, a recent federal government report anticipates that rate of
growth in the nation’s labor force will continue to decline. From 1994 to 2004,
the nation’s labor force grew by 12.5%. The government now expects the U.S. labor
force to grow by only 5.0% from 2014 to 2024.
Population is not an issue in the Atlanta metro area as the
region continues to add people. The Census Bureau
estimates
that between 2010 and 2014, the Atlanta metro area has added more than 327,000
new residents.
What happened to the rest? Economists speculate that the
lack of growth in labor force numbers can be attributed to two simultaneous
trends. With an ageing population, it is thought that older workers are
retiring, while younger folks choose school over work believing that more
education will make them more valuable to employers in the future. It is also
possible that some discouraged workers forced out of the labor force from the
recession have given up and will never return.
There are some anecdotal information in support of these
theories. In addition, the recession saw a spike in the number of workers
applying for Social Security disability. Those on permanent disability may
represent an additional group of former workers who plan to never return to
employment.
Migration within
Georgia
While the Atlanta area has been “red hot” in terms of job
growth, the same cannot be said for the rest of the state. Smaller metro areas,
such as Albany and Brunswick, actually continue to record employment losses. The
Albany area employs about the same number of workers as it did in the early
1990's, while Brunswick and Valdosta have reported no net job growth in the past
10 years.
Could these workers be persuaded to move to the Atlanta
area? It is possible, although it would be mainly younger workers and the more
educated who would be most likely to seek out new opportunities leaving behind
an older, less educated workforce in those areas.
While it is certain that these areas would like to attract
businesses to relocate to their areas, increasingly, it appears that large
metro areas provide benefits not available in smaller communities. These
benefits include a large number of potential customers, easy interaction with
both suppliers and customers, and improved social and cultural infrastructure
(schools, hospitals, museums, music venues, etc.) that are simply not available
without a large population.
Even if Atlanta was able to attract more workers from these
three smaller metro areas, their combined labor forces are less than 175,000.
Moving even 10% of these to Atlanta would boost the Atlanta metro by only
17,000 or so. It would take migration from all parts of Georgia to
significantly boost the Atlanta area’s labor force, which already accounts for
approximately half of the state’s labor force.
Migration from other
states
The Atlanta region has had particular success in encouraging
people from other parts of the U.S. to relocate to the Atlanta region. Much of
the area’s growth in the 1990's came from people moving from other southeastern
states, as well as the Northeast and Midwest, to Georgia.
Some of the causes of this previous migration might be hard
to re-create. Previous so-called “rust belt” states are also experiencing
recovering economies so that people are not as desperate to move from their
home areas. While Georgia has previously exploited its role as a “right-to-work”
state, other states, such as Indiana and Michigan have now passed similar laws.
West Virginia may be the next state to remove this incentive for companies to
relocate to Georgia.
Finally, the return migration of African-Americans back to
southern states has occurred and is not likely to be repeated in such a large
scale in the future.
Migration from
outside the U.S.
Unlike the Northeast, Georgia did not greatly benefit
from an influx of European immigrants in the 19th Century. A
report
from the Pew Research Center indicates that from 2009 to 2014, the number
of Mexicans in the United States actually declined by a net of 130,000. The
report speculates that “the slow recovery of the U.S. economy after the Great
Recession may have made the U.S. less attractive to potential Mexican migrants
and may have pushed out some Mexican immigrants as the U.S. job market
deteriorated. In addition, stricter enforcement of U.S. immigration laws,
particularly at the U.S.-Mexico border (
Rosenblum
and Meissner, 2014), may have contributed to the reduction of Mexican
immigrants coming to the U.S. in recent years.”
As immigrants find better opportunities closer to home,
they are less likely to search for jobs in the U.S. Those immigrants who are
more likely to come to the U.S., such as Syrians, Iraqis, and others whose own
homelands are being disrupted by war, are finding it harder to emigrate as the
U.S. strengthens its barriers to entry.
As state leaders speak about in discouraging the
resettlement of Syrian refugees in Georgia, the result might not only dampen Middle
Eastern refugees’ enthusiasm for relocating to Georgia, it may also give pause
to immigrants from other parts of the world who might feel that Georgia is not
a welcoming location for any non-U.S. citizens regardless of religion or
national origin.
Solutions
Labor Force: Enticing
people back into the labor force may take a combination of offering higher
wages and providing social support (such as daycare, improved transportation,
etc.) to make work both possible and profitable. Other possibilities include allowing
more work to be done at home. Education, often offered by policymakers as a
solution, might have long-term effects, but cannot quickly solve the current deficits
in the labor force.
Migration within
Georgia: The Georgia Department of Labor can make information about job
availability in the Atlanta area more readily available to residents in other
parts of the state. There may need to communicate the advantages of moving to
the Atlanta area, even to the point of helping people understand their options
for housing, transportation, etc.
Migration from other
states: The Georgia Department of Economic Development could begin a
campaign similar to their corporate relocation and expansion efforts but one
targeted at workers rather than companies. By focusing on certain skillsets
that are most in demand, the agency could encourage both new workers and
existing workers to consider relocating to Georgia for their career futures.
Migration from
outside the U.S.: Georgia needs to make clear that citizens from other
nations with legal work visas are welcomed in the state and help encourage
conditions that help immigrants make an easier transition to living in Georgia.
Finally, a less desirable solution to the labor force
problem is to have the state’s economy slow down so that the state’s businesses
will have less need for additional workers. While it is unlikely that the state
would cause such a slowdown deliberately, Georgia is very tied to the national
economy and another national recession will certainly impact the state’s
business community. Remembering that the previous recession ended six years
ago, it is certainly possible that another downturn will develop, which will
relieve pressure on Georgia’s slow-growth labor force.
Without any of these solutions, Georgia’s employment numbers
may fade on their own as businesses fail to find qualified applicants and leave
jobs unfilled.
