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Ask the Expert

So many today lament that people “just don’t want to work.” Is it true? Or is something else keeping people from working?

As appeared in the Cleveland Fed Digest’s Ask the Expert

What is certainly true is there is a decline in labor force participation due to a few factors: the aging population (older people tend to work less); barriers that keep people out of the labor market (such as lack of childcare and the opioid epidemic); and the drop in immigration (immigrants fill a huge need in the workforce, including many lower-wage jobs).

The question we hear more often is “Where are the workers?” and that’s a pretty nuanced question. First, which job are you talking about? High-skilled jobs in high demand? The trades, such as construction, where the workforce is aging? There’s a lot of opportunity in the latter, where jobs don’t require a four-year degree and pay a decent wage, especially compared to some options on the lower end.

The story is different when it comes to jobs with lower wages, no benefits, inflexible schedules, and little opportunity for advancement. Historically, we’ve had people filling those roles, but since the pandemic, lower-wage positions have been hardest to fill.

We have heard from local constituents and through the Worker Voice Project about the importance of job quality or the notion that people want jobs that provide a decent wage, opportunities to do meaningful work, and advancement. We have seen employers mainly relying on raising wages to retain and attract lower-wage workers, so there may be more opportunity for employers to offer predictable schedules and paths for advancement, and the opportunity for workers to have input on where their careers go.

For additional insights into this issue and workforce development more broadly, join us at the Cleveland Fed’s Policy Summit 2023, June 22–23. The lineup features speakers with a variety of innovative policy recommendations, including making better connections between the educational system and the workforce, using state economic development incentives to support worker training and onboarding, and using data to create public policy that’s specific to a local community and its challenges. Check out the agenda for the whole list of presentations focused on workforce development.