I wanted to share my 2 cents on what I think is going on here based on the weeks I spent in this data as I was doing this research.
First off, there are lots of idiosyncratic stories on what is driving the decline in the labor force by county. So I encourage you to study the data yourself.
BUT, the general driver of what you are seeing is the aging of these less urban counties. You can clearly see this in their census demographic data… counties are growing older, the 65 population is going up fast (<20% of them are in the labor force) and it's not being replaced by prime age workers, who either are declining because of the decline in the birth rate, or moving to the booming suburbs of large cities to find employment (or gig jobs).
So clearly this creates a very big problem for the smaller cities. The lifeblood of local economies are workers, who pay taxes, own homes, etc. If workers are declining or leaving, it can start a downward spiral in these local economies.
As part of my research for this piece I met with a local city manager whose city gets 80% of their revenue from local income taxes. If their workforce declines, they have to cut expenses, unless the state supports them (which Ohio is not). It's simple math.
The other takeaway from this visualization is that we are being sold a bill of goods that we can ever have any sort of American manufacturing job renaissance - unless we make some big policy changes to support our smaller communities. If I'm a corporate leader, I would love to build a new factory where the land and labor is cheap… which is in the red areas on this map. But if the workforce is in structural loss, I can't do it! I need to know I will have an ample supply of workers as my factory grows! So, I need the city to have some plan for how to grow their workforce (whether it be immigration, or something else?) to have any confidence to break ground in one of these areas. Otherwise my job is on the line. Am I gonna go build outside of Nashville instead where land is super pricey and resources are in short supply? Probably not. These areas are already so congested.
So, my takeaway is unless we get some great policy in place to reverse course and get people back to work in these smaller towns, America faces serious risk in the coming decade as it continues to age.
We need to get on the same page with this. This is not a red or blue topic. It's an America topic. And the data clearly shows that we need to take action to avert further suffering in America's smaller cities and towns.
The US labor force is a living, breathing map. 🇺🇸
Watch the number of counties with labor forces in structural decline spread like a virus across America between 2010 and 2025.
Shout out to
@JMBDaecius for the idea to do this.
#Economics #LaborForce #Trends