Nebraska’s workforce challenges and solutions

Nebraska’s economy is strong and dynamic. Our economy has for decades been growing faster than our population. Brian Sloan with the Nebraska Chamber of Commerce argues there is an 80,000 worker shortfall. This crisis will continue to grow, there are both real and bogus solutions.

Former State Demographer David Drozd documented that international migration has been our safety valve. Overall population would have declined, and our workforce shortage would be much more severe without immigrants. There are three reasons for this crisis:

1. Weak in-state population growth.

2. Too limited international immigration.

3. Weak worker attraction from other states.

Simply put, Nebraska’s birth rates are dropping, deaths are rising, and we are producing too few Nebraskans to meet workforce needs. Immigration has always fueled Nebraska’s population needs and help meet workforce gaps. But federal gridlock and radical conservative grandstanding denies smart immigration reform. Canada has managed immigration reform and it is doing better meeting its worker needs.

For those of us who love Nebraska and call it home, this third cause driving our workforce shortage is a hard pill to take. There is ample research that Nebraska either has no identity or a negative identity with respect to America’s population centers.

It is challenging to attract workers when Nebraska is either unknown or viewed as an out of touch radical state. We are often viewed as “fly over” or “drive through” country. Even our Tourism Department’s marketing tag line is “Nebraska. Honestly, it’s not for everyone.” Attracting new residents and workers, without increased international in-migration, will continue to be a very daunting obstacle for Nebraska for the following reasons:

1. Fewer people are moving state to state.

2. Compared to where the people are, we have lower compensation.

3. Nebraska’s rising culture wars and negative image.

Loud voices on issues from book bans to gender expression to family planning rights is defining Nebraska as an ultra-conservative state out of sync with the majority of Americans. No one wants to be oppressed or even just tolerated. Potential movers check out possible new homes forming opinions that drive decisions. Our headlines are increasingly scary. Former Nebraskan Ross Benes in his 2021 book Rural Rebellion captures in spades this driver making worker attraction increasingly impossible.

Colorado is increasingly perceived as a state with great economic opportunities, growing diversity, and more progressive politics. Over the past decade, Colorado is among just two states in our region with positive net domestic migration. Over this period, Colorado is gaining nearly 27,000 more residents annually from other states. Reputation matters, Nebraska.

There are bogus workforce solutions being promoted this year in policy circles. Possibly the biggest distortion is cutting taxes will (1) keep more Nebraskans working in Nebraska and (2) attract a flood of workers from across the nation. State and local taxes are not even in the top 10 list of reasons why people move.

Sorry folks, but Nebraska is not a high income-tax state. This is particularly true for younger career building workers. Bottom line, overall tax burdens are comparable to most states. The rankings distort the reality and should be taken with a grain of salt.

Attracting and retaining our own young people is so much more complicated than marginal tax rates. Be assured cutting income tax rates for the wealthy will do little for younger, working age Nebraskans. The fact is, very few Nebraskans are leaving these days. Over the past decade, net domestic outmigration is less than 0.09% per year. Much lower than in previous decades.

In conclusion, let’s consider the keys to ensuring Nebraska has enough human talent to fuel an innovative, competitive, dynamic, and successful economy and society:

1. Make a genuine case to our children, grandchildren, and their friends that Nebraska can become their permanent hometown.

2. Pressure our congressional delegation and Congress to embrace smart immigration reform. Smart immigration can do much to fill our workforce gaps in key industries.

3. Embrace our progressive roots once again and back down from the culture wars. Respect personal freedom and do not use government power to force the values of some on the majority.

If we really want to be competitive for human talent, we must be willing to commit to objective research and focus our energies on real solutions not radicalized political talking points.

— Don Macke is an economic developer and Senior Vice President e2 Entrepreneurial Ecosystems in Lincoln, Neb.