Business owners and economic development officials remain concerned that the state’s shrinking labor force is sapping business growth and recruitment efforts.
Friday’s announcement is a sign that joblessness in the state has improved and remains relatively stable. Statewide unemployment has remained at or below 4.6% this year after spiking to 10% in April 2020 when the pandemic began ravaging the economy, businesses were forced to close and thousands of workers were laid off.
Now, businesses across Arkansas are closing or reducing hours for an entirely different reason — they can’t persuade workers to fill job openings. Expansion efforts may be reevaluated, and recruitment of new businesses to the state is being hampered by declines in the labor force, officials say.
Arkansas’ civilian labor force in July decreased by 2,542 from June, a result of 1,591 fewer employed and 951 fewer unemployed Arkansans. The total civilian labor force was 1,355,630. Two years ago in July, the state’s labor force was 1,362,767.
The construction, manufacturing, health care, logistics and trucking industries all face the same problem of not being able to find people to fill the job openings.
As the pool of workers shrinks, job openings are increasing. The Commerce Department estimates that there are more than 70,000 open jobs in Arkansas while the Little Rock Regional Chamber of Commerce reports there are 39,256 unique job openings in the Little Rock metropolitan area alone.
In Northwest Arkansas, small businesses are scrambling to adjust to the worker shortage. Restaurants and retailers, especially, are struggling to adapt, according to Mary Beth Brooks, director of the Arkansas Small Business and Technology Development Center at the University of Arkansas.
Wages in the area have increased from the $10-$12 an hour range to upward of $15 per hour. Restaurants that traditionally would be open six or seven days a week are now moving to a Wednesday-Saturday schedule. Businesses, including area banks, are offering hiring and retention bonuses to bring workers on board and keep them on the job.
Michael Pakko, chief state economist at the Arkansas Economic Development Institute in Little Rock, noted that the state seems to have hit a wall in working to lower the unemployment rate. “Recovery of Arkansas’ labor markets is continuing at a snail’s pace,” Pakko said. “The past few months have been a slow slog back to normal.”
See the full article from the Arkansas Democrat Gazette here.
