How’s Nebraska’s jobs recovery going? It depends on who you ask.
The Bureau of Labor Statistics monthly jobs report shows Nebraska retained the nation’s lowest jobless rate in May at 1.9%. That’s an indicator of a tight labor market, which can make it hard for businesses to hire and expand.
Indeed, businesses across the country are experiencing a labor shortage due to a confluence of factors exacerbated by the pandemic, including early retirement, reduced labor force participation, a declining birth rate, and lower immigration rates. Wages go up as a result, but over the past year, wages have grown more slowly than inflation.
The data may also indicate a shift in how some Nebraskans work. Nebraska is estimated to have lost 1,900 non-farm payroll jobs in May, delaying the state’s full recovery to its pre-pandemic payroll jobs count. The difference in results between Nebraska’s record low unemployment rate compared to its payroll jobs recovery helps explain what is happening in Nebraska’s labor force.
It’s important to know that the monthly jobs report includes two different surveys (described in more detail in this previous blog) that measure different aspects of the job market.
The business establishment survey asks businesses about how many non-farm payroll jobs they have filled, while the household survey asks people to describe themselves as employed, unemployed, or out of the workforce. Nebraska, like several other states, has performed relatively better on the household survey during the pandemic recovery. This might indicate that on the margin, workers shifted from normal payroll jobs to some form of self-employment or alternative work arrangement in response to the pandemic.
On the business establishment survey, Nebraska is now 6,600 jobs (0.6%) away from recovering the total payroll jobs count that it had before the pandemic recession, putting the state slightly behind the national average (0.5%) on pandemic jobs recovery.
Nebraska ranks 18th among states in regaining the count of non-farm payroll jobs it had prior to the pandemic. The top 14 states have already recovered to their pre-pandemic jobs count. Neighbors South Dakota and Colorado are ahead of Nebraska on recovery, while Missouri, Iowa, Kansas, and Wyoming are behind.
In contrast, Nebraska’s recovery on the household survey is relatively stronger, indicating that more Nebraskans describe themselves as employed (compared to before the pandemic) even if fewer payroll jobs are filled over the same timeline. Nebraska has an estimated 24,000 more people working compared to before the pandemic, putting Nebraska back on trend to its pre-pandemic growth in the number of people working.
Nebraska’s household employment recovery is better than the national average, placing the state 15th in recovery for number of people working in the state.
Nebraskans should be proud to have the best jobless rate in the U.S., but it’s also a sign of Nebraska’s need to compete with other states for workers. Some of the factors causing the labor shortage will ease up as the pandemic winds down, but nonetheless, Nebraska policymakers will need to continue to advance the state’s competitiveness to attract firms and families to put down roots in the Cornhusker State.
According to the latest available data, Nebraska loses taxpayers to other states, but it still remains highly competitive on cost of living. With the right approach on economic policies that are within the state’s control, it has the basic ingredients to persuade more working-age Nebraskans to stay and attract out-of-staters to move in to fill open jobs.
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