Understanding Factors Contributing to a Labor Force Downturn

In a continuing effort to attract, retain and identify workers for Yavapai County, the Workforce Development Board wanted to share a few updates. As we look back to the record historical benefits received by Americans during the pandemic economic shutdown and beyond, we recall that workers were offered $21 per hour for unemployment, rental assistance, house payment protection, daycare, TANF benefits, etc. While those services and programs were not new, some of the requirements were changed.

Namely, the work requirement was lifted because of the shutdown of many industries during the pandemic. For example, individuals who are receiving unemployment benefits are generally required to actively search for work and meet certain job search requirements to remain eligible for benefits. Claimants must register with the Arizona Department of Economic Security’s (DES) Arizona Job Connection website or visit a local DES Employment Service office to create a job seeker account. Claimants are required to seek suitable employment and report their job search activities on a weekly basis to maintain benefits. The specific number of job search activities may vary, but complying with the reporting requirements is essential.

Temporary Assistance for Needy Families (TANF) is a federal assistance program that provides temporary financial assistance to low-income families with children. Work search requirements for TANF recipients in Arizona vary but recipients are generally required to participate in employment, job search, job training, education or community service to continue eligibility for benefits.

I am pleased to inform you that the Senate and House recently passed a bill earlier this month reinstating the work search requirement for recipients receiving assistance. This legislative action acknowledges the importance of fostering self-sufficiency and reintegration into the workforce.

Since these work search requirements have been reinstated, we have witnessed a significant increase in the number of individuals actively seeking employment, compared to the previous few years at our NACOG and DES work centers. Currently, the Yavapai County labor force is averaging 109,373 individuals, which is a rate of 48.8% labor force participation; 81.4% of these individuals are between 35 and 54 years of age. Employment projections continue to increase by 1.9% for the next several years.

The labor force participation can be affected by a range of factors, such as changes in the economy, technological advancements, job availability, education and skills, retirement rates, and personal circumstances. For example, during periods of economic turndown or recession, some workers may experience job loss or choose to leave the workforce because of difficulties in finding employment. Additionally, changes in industries, automation or shifts in market demands can also impact the distribution of the workforce.

Arizona has experienced varying employee retention rates across different industries. Employee retention refers to the ability of employers to retain their workforce over a certain period of time. Several factors can influence employee retention rates such as economic conditions, industry-specific dynamics, job satisfaction, compensation and benefits, work-life balance, career growth opportunities and company culture.

The data demonstrates that Yavapai County has faced a labor force downturn, presenting challenges to our economy and employment prospects. Yavapai County, known for its diverse industries and employment opportunities, has been impacted by several factors contributing to the downturn in the labor force, such as a changing economic landscape in manufacturing, construction and mining. Technological advancements have also played a role in the labor force downturn. Automation and digitalization have transformed how businesses operate, which has led to changes in job requirements and the need for a specifically skilled workforce. Demographic changes, including an aging population and younger individuals migrating to urban centers, have contributed to this downturn. Many industries such as tourism, hospitality and retail, which are vital to the economy, experienced setbacks leading to worker relocation.

Local businesses, community leaders, and government entities in Yavapai County are striving to address the labor force downturn. Collaborative efforts to attract new industries, diversify the economy and expand workforce development programs are underway.

Yavapai County’s resilience and community spirit will play a vital role in overcoming the current labor force downturn. By supporting local businesses, encouraging entrepreneurship, and investing in the development of a skilled workforce, the county can pave the way toward labor attraction and retention.

While Yavapai County and the nation currently face labor force challenges, there is optimism that federal requirements restoring work searches and strategic planning will help reverse the downturn. By adapting to changing economic conditions, embracing technological advancements, and nurturing a diverse and skilled labor force, Yavapai County can restore a sustainable and thriving workforce. QCBN

By Teri Drew

Teri Drew is the executive director of the Yavapai County Workforce Development Board.