Kansas legislators are trying to find solutions to a workforce crisis as businesses post “help wanted” signs and can’t find enough workers.
Kansas Chamber lobbyist Eric Stafford the Special Committee on Workforce Development on Monday that access to available and skilled workers is a top issue for Kansas businesses. It was the second meeting of the committee as it works to find solutions to implement next legislative session.
The COVID-19 pandemic exacerbated the looming challenge of retirements, he said. Meanwhile, projected growth of the working-age population in Kansas “is not looking good.”
Mike Gibson, of Build Up Kansas, said the state’s construction industry will need 58,000 new entry level construction workers over the next five years to replace retirements of Baby Boomers and combat outmigration of the younger population.
“There is a math problem with the number of people here in our country — the birth rates, number of available workers — so we either need to import them from other states or other countries because we just don’t have the number of people to fill the job vacancies that are out there,” Stafford said.
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The chamber supports comprehensive immigration reform at the federal level.
“Open borders is not a solution, but neither is taking 12 years to get somebody with a PhD or some skilled training to come into America to work and provide for their family,” Stafford said. “There’s failure on both sides on immigration.”
Unemployment hit a 46-year low of 2.3% in May, but has since increased slightly, Kansas Department of Labor statistics show. Labor market data released last week show October’s seasonally adjusted unemployment rate was 2.8%, below pre-pandemic levels.
Meanwhile, the labor force participation rate has dropped.
“Currently, the labor market has the power, there aren’t as many of them,” Rep. Stephanie Clayton, D-Overland Park, but she contended the worker shortage is in-part a manufactured crisis.
“It is such a competitive job market; it is very employee friendly right now,” Stafford said. “That’s why you’ve seen fast food chains and others, you know, we don’t need the federal government to raise the minimum wage to $15 an hour because it’s already happening. The fact that you can go get a job at Whataburger making $16 an hour, that’s not a manufactured crisis, that’s a workforce crisis.”
Labor Department data show average nominal hourly earnings increased 5% over the past 12 months to $28.99. But those pay raises have failed to keep pace with inflation, meaning real earnings have decreased 2.2%.
Melissa Rooker, executive director of the Kansas Children’s Cabinet, said the shortage of child care stems from a lack of adequate pay.
“It is a wage issue at heart,” Rooker said.
She said the pipeline to get people into the field exists, “but we are finding a lack of interest in joining this profession and joining the pipeline because wages across the state for child care hover around $10 an hour on average. So it’s very hard to compete with the entry level (jobs) at most of the other businesses in the state as they are attempting to compete for labor in a scarcity situation.”
Dave Trabert, of the Kansas Policy Institute, urged cutting taxes.
“One of the biggest challenges facing employers in paying higher wages is that they pay so much in taxes,” Trabert said. “We have some of the highest state and local tax rates in the nation here in Kansas, and it would be very helpful if the Legislature finds ways to reduce that tax burden.”
The Kansas Department of Revenue previously reported that corporate income tax receipts have beat estimates, suggesting “favorable profit margins.”
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Economic development in Kansas requires more workers
As Gov. Laura Kelly touts economic development projects in Kansas, officials acknowledge a need for workforce development to fill new jobs. Kansas could also be in line for a second megaproject after Panasonic chose De Soto for a massive electric vehicle battery plant.
Commerce Secretary David Toland, who also serves as lieutenant governor, declined to answer a series of economic development-related questions while receiving the Christmas tree at the governor’s mansion Monday.
When asked if the agency would be seeking any changes to the megaproject bill, Toland said “I don’t have anything to say at this point.”
But when asked what he wanted for Christmas, Toland did have a response.
“I want another year of economic growth in 2023 like we had in 2022,” he said.
Committee chair Rep. Sean Tarwater, R-Stilwell, suggested putting more money toward finding workers for the economic development projects.
“We spend hundreds of millions of dollars sometimes, the Department of Commerce does, to bring companies here,” Tarwater said. “But then we need to fill them full of employees. It wouldn’t hurt too much to spend some of that money to advertise these jobs somehow — on TV, on the web, Facebook, however — to get it in front of parents, in front of the students, so that we can create some excitement over these jobs that are being created, because we’ve got to fill them somehow.”
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Gibson, of Build Up Kansas, said promotion is needed because students aren’t aware of opportunities in construction trades at universities and community or technical colleges.
Referencing Panasonic, Gibson said economic development highlights the need for the work done by Build Up Kansas. The group’s website has English and Spanish versions, and provides hope to students by showing jobs that are far above minimum wage pay scales.
Yet Torree Pederson, president of Aligned, said more robust data around students is needed to better improve workforce readiness.
“Business leaders lack the workforce needed to maximize their potential,” Pederson said. “As a result, leaders are asking what we can do to ensure students are aware of high-skill, high-wage jobs in Kansas.”
Sen. Kellie Warren, R-Leawood, questioned the tracking of data.
“We need to be looking at the competing interests,” Warren said. “Are we going too far in collecting information on kids? Is it accessible to parents about their own children as well? I’m hearing concerns about that from parents. We just want to make sure we’re very careful and secure in what we’re doing and that our children just don’t become data points as they navigate and live life.”
‘We don’t need birdhouse builders. We need bona fide carpenters and other tradespeople.’
Gibson said state funding is helping get more practical curriculum into schools.
“We have some instructors that are teaching how to build birdhouses,” Gibson said. “Ladies and gentlemen, we don’t need birdhouse builders. We need bona fide carpenters and other tradespeople. Our curriculum is a roadmap to help break that barrier down.”
Manhattan Area Technical College was one such institution that was teaching students to build birdhouses instead of what the industry needed, Gibson said.
“No disrespect, but you have NBAF in your backyard,” Gibson said he told MATC leadership several years ago. “We can’t build NBAF with birdhouse builders.”
Gibson’s team worked quickly with MATC to get its instructors trained on new curriculum on carpentry, and they have since added HVAC, welding and other trades.
State funding is helping Gibson get reinvigorated high school vocational programs up and running.
The Legislature last session appropriated $500,000 in last fiscal year’s budget from the Commerce Department to Build Up Kansas. Lawmakers added $2.6 million for this year’s budget.
But not all costs are covered by state money as industry partnerships have been relied upon to fill in gaps.
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Gibson said programs at El Dorado Correctional Facility and at high schools were short materials, “the state funding was one of their inhibitors,” and industry has donated materials. In the El Dorado prison example, Monarch Cement has been the donor for masonry programs.
“The conversations we’re having with high schools, if they need a sheet metal brake, if they need a bandsaw, and they don’t have the necessary state funding to help them get to where they need, we’re going to talk to our manufacturer reps about backfilling some of the donated materials to help that high school be the best that they can be,” Gibson said.
Stafford, the Kansas Chamber lobbyist, said businesses want more alignment and coordination with educators.
“K-12 always thinks that they’re providing a great education for the business community, that the outcomes are what the business community needs,” Stafford said. “And then the business community thinks K-12 is not doing enough. … It’s not that educators aren’t doing a good job, it’s just making sure we’re doing a good job in the right way.”
Child care challenges affecting Kansas workforce
Officials have long cited the shortage of available child care as a barrier to some parents, especially mothers, entering the workforce.
Sen. Renee Erickson, R-Wichita, suggested expanding capacity by changing the ratio of providers to children.
Rooker, of the children’s cabinet, said such a change is already in the works. The Kansas Department of Health and Environment presented a proposed regulatory change to a legislative committee last month. The new regulation would increase the ratio from three infants to four infants per one adult.
“Keep in mind, the point of the infant ratio, these are tiny human beings who cannot walk,” Rooker said. “If a fire erupts, the point of the ratio is how many infants can one adults safely evacuate from a building, and I think four is kind of pushing the limit.”
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Rooker said a new state tax credit will help businesses provide child care, though the program is too new to have useful data on whether it is working. The children’s cabinet is also working to secure funding to provide grants for construction of new childcare facilities, possibly through federal pandemic relief from the state’s SPARK process.
Sen. Virgil Peck, R-Havana, said he prefers letting the private sector find solutions instead of government getting involved. He pointed to SugarCreek Food Solutions, which provides subsidized child care for employees at its Frontenac facility, among other benefits.
“Too many times as legislators we think we got to assist private industry and business,” Peck said. “No. Sometimes, we just got to get out of the way and let them do some things.”
Andrew Bahl of The Capital-Journal contributed reporting.