For companies, this may mean rethinking the best places to profitably access human capital. Impossibly expensive regions, such as the Bay Area, may remain magnets only for the highest-end professionals, or those with family money, but not for those who earn more modest wages. Some of the slowest labor force growth, notes economist Jed Kolko, is precisely in markets that on the surface might be most attractive to workers. In some sense, elite markets like Boulder, Silicon Valley, Boston and Boston now have the same problem some Rust Belt markets have had for years—even when there are jobs, it’s increasingly hard to attract people to the area to do them.
In contrast, lower cost areas like Greeley, Colorado, Provo, Boise, Austin, Orlando and Fayetteville, says Kolko, still have tight labor markets, but are still growing their labor forces. Yet, there’s also an important message for millennials and future generations: a college degree may not be as valuable as you have been told. The returns for college degrees have been in decline for at least a decade.
Perhaps the biggest opportunity, or challenge, may be in meeting growing needs for personal care, much of it to care for our rapidly aging population. This sector grew by 33 percent since 2010 and 5 percent in 2016-2017. Many workers in the field would benefit from basic training in healthcare and gerontology, as opposed to a four-year or master’s degree. The rapid movement of seniors to lower cost, mainly Sun Belt regions and smaller cities, including in the Intermountain West, could help create a natural market for such work.
Overall the new trends provide an enormous opportunity for many areas of the country that can both accommodate blue-collar and high-paid sectors, including big cities like Houston and Dallas, which are projected to lead the nation in new “mid-skilled jobs,” as well as many smaller communities. Their big challenge may lie in training workers in fields with the largest number of openings, such as construction and manufacturing.
This means there needs to be a strong emphasis on bringing young people into many tactile fields that pundits have claimed are “gone forever” but have now come back with a vengeance. In fact, despite all the information age banter, significant opportunities lie in the “middle-skill” jobs. In the last year, nearly 250,000 new jobs were created in the construction and extraction and installation and maintenance job categories, paying roughly $20 per hour. Another 600,000 new business operations specialists, managers and healthcare practitioners joined the economy at pay rates above $30 per hour.
Critically, regions also know that new arrivals are not likely to solve their shortages; the current rate of job-related moves is roughly half to one-third what it was as recently as the 1990s. This provides an excellent opportunity for regions that did not shine earlier in the decade but are making a marked comeback now. For scores of towns and cities, the looming labor shortage represents a golden opportunity—if they can take advantage of it.
Read more: Urban Areas In The Southwest Are Picking Up Speed