It is a promise that most residents are used to and rely on: Dial 911, and an ambulance staffed with paramedics and EMTs will be there in a flash to help with an emergency. In Doniphan County, however, a service that many take for granted almost stopped. After years of staffing difficulties, the two entities providing emergency medical services in the county — the city of Troy and a rural fire district based in Highland — found themselves on the brink of closure earlier this year. “We were to the point where we felt that if we didn’t do something, we wouldn’t have an ambulance service for our county,” Doniphan County Commissioner Wayne Grable said. The tale is one familiar to many communities across the state, particularly in rural areas — though the challenges are increasingly spreading to larger communities as well.
Source: CJonline

The Center was approached by Wallet Hub last week to answer a few questions about the labor market troubles. We thought that the interaction would be of value to the business and community leadership within Kansas.

• Why do employers have difficulties in filling employment positions?
  • The three driving forces behind employers experiencing a lack of qualified candidates are demographics, an overly heated economy, and friction within the labor market. First, U.S. population growth, along with immigration, has restricted the labor supply. Within the demographic shift, which has been well published, are Baby Boomer exits, leaving behind a labor gap.
  • The second thing to consider is the economic state of the economy. After four years and a pandemic, we faintly remember what the economy was like in 2018. It is important to note that the economy was nearing full capacity. The pandemic itself paused parts of the economy but was not a correction within the market. With the injection of federal funds, the economy bounced back quickly, returning us to a heated economy where firms have already soaked up all of the high, moderate, and low-quality labor. When we look at the percentage of the employed population (employment-population ratio), Kansas returned to its pre-pandemic typical levels in mid-2021. Thus, in 2022 we see increased competition among employers for remaining labor.
  • The third perspective, which doesn’t seem to get much attention, is that there are lots of pressure on the labor market. Firms have changed products and processes, requiring a different combination of occupations, skills, and knowledge to produce goods and services. That sudden shift in demand, along with increased home prices, mortgage rates, cost of education, uncertainty, and the time needed to reskill, adds friction to the labor market’s ability to adapt to demand. However, the reality is the labor market is responding quickly, and it will take years for households to move and gain the education and experience that firms are demanding today.

• What are the main factors that are influencing the high turnover rates in the labor market?
  • Now the economy has returned to full employment and demand for labor is higher than supply, the market power has shifted. The market power is akin to housing, which moves between buyers and sellers. The difference is that firms have had monopsonistic power for over a decade, and human resource teams are uncertain about how to react to this paradigm shift.
  • From the household’s perspective, labor opportunity hasn’t been this bright in a long time. When evaluating one’s skills and experience along with the work environment and compensation, a share of the labor market is using the increased power to move up in their career, creating a high turnover effect.

• What will be the economic impact, if any, of this trend?
  • The impact from the household perspective is positive for the short and long run, as there doesn’t appear to be any significant policy or structural changes on the current horizon that will reduce demand and the subsequent power they currently have over firms. The upside is that there will likely be upward mobility, where people in low and moderately-skilled jobs will have an opportunity to move up and gain experience and increased income.
  • One might expect that the impact of unfilled positions would have a negative effect on the firm. In the short run, some businesses will experience hardship because they cannot find the labor to fill the demand; however, we might need to look at the labor market differently since we are at full employment. It is not that households are not willing to work; they are willing, provided that the compensation and environment align with their expectations. The impact on businesses is they need to shift their perspective. Suppose labor remains a critical component of competitiveness. In that case, they need to increase compensation to attract employees, train lower-skilled staff to allow for upward mobility, or add technology to increase the productivity of the current employees. These efforts will cut into corporate profits, which will likely shake out weaker players and industries.

• How can employers attract and retain employees during this troubling period?
  • Manufacturing and service-related sectors have dramatically changed their compensation packages over the last two years. Although there has been a reluctance to continue that pace of change with the high level of uncertainty, the pressure will likely continue into 2023 and beyond. Firms in Kansas have shared that the return on investment to attract labor in a tight market had decreasing returns over the last six months. The head-to-head competition with larger firms or markets made it cost-prohibitive; instead, businesses have found it more cost-effective to focus on improving their internal environment and making technology investments.

• In your opinion, will this imbalance in the labor market continue to be an issue throughout all of 2022 or will it get solved faster?

A tight labor market is likely here to stay, meaning that searching for and retaining labor will remain difficult for some time in the future; however, three things will help relieve struggling employers. First, a recession will take some pressure off of the labor market. Second, the labor market will continue to adapt by moving and gaining more education. Third, firms will be forced to invest in technology and utilize labor more efficiently than they did in the past.
Source: CEDBR

Through the federal Internet for All initiative, there are opportunities for all U.S. states to receive funding to improve broadband access. One program included in this initiative, the Broadband Equity, Access, and Deployment (BEAD) program, provides $42 billion to states to expand high-speed internet access by funding planning, infrastructure deployment and adoption programs nationwide. Funds will be allocated to states according to a formula derived from the Federal Communications Commission (FCC) Broadband Map data. These maps provide a picture of where broadband is and is not available across the country. … To ensure that the maps are constantly improving in accuracy, the FCC has set up a system that allows consumers to challenge inaccuracies and provide feedback. Individuals who see that the information on the maps does not match up with what they know from their lived experience will be able to submit challenges, or request corrections, directly through the map interface. The FCC will also accept bulk challenges to the reported availability data from state, Tribal, and local governments and other stakeholders who see problems that need corrected in multiple locations. To learn more about how the broadband map works and who is eligible to submit a challenge, please review this document: FCC Challenge Handout. … All challenges should be submitted by January 13, 2023, to ensure that they are considered to inform funding allocations

The City Council has approved an employment agreement with Branden Dross as Lafayette City Administrator, and he will begin his work with the City on January 9, 2023. He is currently the City Manager of Herington Kansas. Before moving to Kansas in September 2020, he lived in San Antonio for over a decade and worked for CPS Energy and the City of San Antonio. Before getting into the public sector in 2015, he was in food and beverage management for over a decade. Angela is his wife of 14 years, and they have a teenage son, Branden Jr. Branden has Bachelor and Master Degrees in Public Administration from the University of Texas at San Antonio. He has served on several local, state, and national committees ranging from a school district bond committee to the League of Kansas Municipalities governing body.
Source: Lafayette