We have work to do in preparing our workforce for continued economic growth

f you were among the nearly 200 community leaders who attended November’s Eggs and Issues meeting, sponsored by the NKY Chamber of Commerce, you heard predictions about our 2025 economy from NKU Senior Director of the Center for Economic Analysis and Development Janet Harrah. Harrah was joined by Huntington Bank’s John Augustine for the presentation. Augustine provided an overview of the national economy, and Harrah took a deeper dive into our local economic outlook. This blog will highlight her insights as they relate to the Greater Cincinnati workforce. Specifically, we will explore four topics: the civilian labor force, job growth, unemployment rates, and the skills gap. 

1. Our civilian labor force (CLF) is not growing as quickly as that of the United States. As the first chart below shows, the US labor force has grown by 7.2% over the past decade while it has only grown by 6% here. While 1.2% may not seem significant, it translates to 10,300 additional workers who would have been available to fill our jobs.  Perhaps more alarming, Harrah forecasts that our CLF will decline over the next 25 years (as seen in the second chart below) as the Baby-Boomer generation fully retires, leaving the smaller generations behind them to fill their void. The labor force will shrink by approximately 32,000 workers during this timeframe. 

2. Job growth in Greater Cincinnati has not been consistent across all industries. While total jobs grew by 4,500 over the past year, many industries lost jobs. Note the large increase in healthcare jobs compared to substantial losses in financial services in the chart below. Some of the job loses reflect permanent changes as jobs are eliminated due to increasing use of technology. Some reflect short-term slowdowns attributable to supply-chain disruptions caused by the recent hurricanes and the very large Boeing strike. 

 Whereas our market has typically mimicked the country in terms of job growth, Harrah noted that Greater Cincinnati has begun to lag the United States. Our employment growth is projected to slow to 0.25% in 2025, significantly lagging the national rate of 0.8%. But she stressed that job growth in Northern Kentucky has been the bright spot in the Greater Cincinnati economy with a substantial percentage of the new jobs occurring in Kentucky, particularly in and around the airport. 

3. Unemployment is ticking upward, locally and nationally. Greater Cincinnati’s unemployment rate typically mirrors the nation, and that continues to be the case, as seen below. The unemployment rate has risen slightly over the past 12 months. Harrah said currently there is about one job opening for every available worker here and nationally. 

However, this does not mean that employers can easily find the talent they need, largely because of the skills gap (see point 4 below). Furthermore, as individuals lose their jobs, many are opting not to re-enter the traditional workforce but are instead entering the so-called “gig economy.” Although not clearly defined, the gig economy includes jobs individuals do as freelance workers, such as Uber drivers, dog walkers, and food-delivery jobs. Roughly 15% of the labor market are gig workers – and that percentage is higher in Kentucky (16.3%). Gig workers are self-employed and are foregoing access to healthcare and retirement benefits through employer plans.  

4. Our workforce does not currently possess the skill set needed for jobs in the future. During the Eggs and Issues meeting, both Harrah and her co-presenter John Augustine referenced the skills gap. Augustine mentioned a desire by President Trump’s incoming administration to “reshore” manufacturing jobs. That is, to increase the goods produced by American companies rather than purchasing them from foreign sources. However, currently, the American labor force does not have the training needed to perform these technology-based manufacturing jobs.  

The skills gap affects virtually every industry and is increasing as the use of technology increases. Technology has replaced some jobs. More often, however, people work alongside technology in the workplace. The term “cobot” refers to this practice: humans and robots work together to accomplish tasks.  

“Cobots” is the term attributed to robots and humans working together to perform job tasks as in the photo above. 

What’s the bottom line? Since job growth is slower and unemployment is increasing, is the talent shortage behind us?  

Absolutely not.  

Even if our economy stagnates, we will not have enough people to fill our jobs by 2050. There are too many people retiring, and too few young people to fill their ranks. We must continue working to retain our current residents while simultaneously bringing in new workers. There are tangible things we can do now to prepare for the future: Providing training to address is skills gap is essential. Increasing our immigrant population is critical. Helping all potential workers enter the labor force is a “must-do.” Addressing concerns like the housing shortage is necessary. Fortunately, our region is already working to address these priorities. 

If you are ready to get involved, reach out to NKY Works. We will connect you to the teams of local experts who are working together to tackle these challenges. NKY Works is also available to help address your specific workforce issues. We can connect you to resources and troubleshoot solutions with you. You can reach us at 859.657.WRKS (9757) or NKYWorks@NKADD.org.