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Jobs and Labor

Industry Trends

Key Takeaways

  • Arkansas’s population is growing, but jobs for government workers who fill important roles in our community are decreasing. 
  • Total non-farm jobs increased 15% in our state from 2010 to 2022, slightly behind the U.S. rate of 17%.   

There are more Arkansans now, and fewer government workers to serve them 

Investment in our state and local government workforce is not keeping up with population growth in Arkansas. This hinders the quality and accessibility of government services that help our state thrive. Since 2010, the population in Arkansas has grown 4%.1 During that time, state government jobs grew at less than half that rate and local government jobs dropped 8%.  

Recent tax cuts, as well as a pattern of hiring freezes from current and past governors, have limited our state’s ability to grow and adapt to the needs of our population. Texas is our fastest growing neighbor,2 and the only nearby state to have increased both state and local government jobs since 2010. 

Arkansas is home to dynamic industries 

Jobs are growing and industries are changing in Arkansas. Total non-farm jobs3 increased 15% in our state from 2010 to 2022, slightly behind the U.S. rate of 17%. Some of Arkansas’s largest industries were driving much of that growth: Trade and Transportation grew 15%, Education and Health Services grew 20%, and Professional & Business grew 30%. More recently, Arkansas followed a national trend of increased demand for services and hospitality following the pandemic. Both of those sectors increased 15% from 2020 to 2022.  

Government is the second largest employer in the state. However, it is employing fewer and fewer Arkansans while the state and other industries grow. Arkansas Government jobs decreased 5% from 2010 to 2022, joining only the Information and Natural Resources/Mining categories to lose jobs over the same period.4  

Growth in Top 5 Largest Industries (by job count) in Arkansas 2010-2022
Industry % Change in Arkansas % Change in US 
Trade transportation and utilities 15% 17% 
Government -5% -1% 
Education and health services 20% 22% 
Manufacturing 1% 11% 
Professional and business services 30% 34% 
Top 5 Fastest Growing Industries (by percent change in job count) in Arkansas 2010-2022 
Industry % Change in Arkansas % Change in US 
Other services5 74% 7% 
Financial activities 45% 18% 
Professional and business services 30% 34% 
Transportation and utilities 28% 52% 
Leisure and hospitality 24% 21% 

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Labor Force

Key Takeaways 

  • The rate of unpaid care work is much higher in Arkansas than in most other states. This unpaid care work accounts for $5.8 billion in total economic value every year in Arkansas. 
  • The cost of child care is making it difficult for parents to enter and stay in the workforce. The annual cost of infant child care in Arkansas is nearly as expensive as public college tuition ($6,074 versus $7,882). 
  • The makeup of Arkansas’s labor force is shifting. Arkansas’s workforce has an increasing share of older workers, workers with higher education, and Hispanic workers.  

Unpaid caregiving is a hidden economic force 

The Labor Force Participation Rate is an estimate of the proportion of working-age people actively participating in the labor market. This is a valid economic measure, but it leaves out an important group: unpaid caregivers. People who work as unpaid caregivers are “out” of the labor force,6 even though they provide significant economic benefit to our communities.  

Arkansas has 420,000 unpaid caregivers.7 These caregivers look after adult friends or family members who are elderly, disabled, or have serious health conditions. This type of care accounts for $5.8 billion in total economic value to our state, and the average a caregiver workload comes to more than 900 hours per year in Arkansas.8 Compared to most other states, Arkansas has a much higher share of the population (14%) who act as unpaid caregivers. Only two other states (Mississippi and West Virginia) have higher rates of unpaid care workers.  

The cost of child care is squeezing parents out of the labor force 

The United States Chamber of Commerce Foundation estimates that approximately one in four parents who leave the workforce do so because they cannot afford child care.9 More than half of the workers in Arkansas are parents, and 20% are parents with young children.10 This makes child care an essential factor in sustaining our workforce. Unfortunately, the child care industry in Arkansas is shrinking, falling 4% or by about 500 workers after the start of the pandemic.11 

The cost of child care in Arkansas is frequently unaffordable for parents who would otherwise enter the workforce. The recommended budget for child care is 7% of household income, but in Arkansas, the cost of child care takes up 12% of our median household income. For single parents of multiple children, the situation can be even more unaffordable. In our state, child care eats up more than half (58.7%) of the income of a typical single parent with two children.12 The annual cost of infant child care in Arkansas is nearly as expensive as public college tuition ($7,498 versus $9,070).13 In Arkansas, the data show availability and accessibility are greater problems than affordability. Even though other states may have much higher costs, Arkansas families struggle just as much or more to find child care.14 In fact, just one in 10 parents in Arkansas are able to find quality care.15 

Worker compensation is not matching increases in output  

In Arkansas and across the country, there was a time when increased economic output and growth translated into shared prosperity for both business owners and the workforce. In the decades leading up to the 1980s, workers generally saw their wages go up along with increases in productivity. 

However, in recent decades, worker pay has fallen farther and farther behind. From 1979 to 2021, productivity from the hard work of typical employees has increased 3.7 times as fast as their compensation.16 Over the same period, CEO compensation shot up 1,209%. In 2022, CEOs were paid 344 times as much as a typical worker in contrast to 1965 when they were paid 21 times as much as a typical worker.17 

Labor Force Participation Rate is slowing 

Arkansas has a relatively low and decreasing Labor Force Participation Rate. A higher rate can help an economy grow faster, but there are many valid reasons for “exiting” the labor force. Some examples include going back to school, becoming a caregiver, or suffering a disability or illness. People may also choose to leave the labor force because they have given up on finding a job, or because they retire or elect not to work. The Labor Force Participation Rate fell 10% since a recent peak in 2006. Since then, the gap between the U.S. and Arkansas Labor Force Participation Rate has nearly doubled.

Labor Force demographics are changing 

A large share of our labor force is nearing retirement age. The “graying” workforce in Arkansas mirrors national trends. Arkansas workers who are 55 or older make up a 23% larger share of our workforce compared to in 2010. At the national level, this age group grew slightly faster at 27%.  

In addition to having a larger share of older workers, Arkansas is also seeing growth in the portion of the labor force with higher education. The fastest growing share of the labor force by educational attainment was among the group with a bachelor’s degree or higher. Arkansans with at least a college degree make up 37% more of the labor force now than they did in 2010.  

The demographics of our labor force is also changing. Hispanic workers still make up a small but growing portion of our labor force. The share of Hispanic workers in our labor force grew by 60% since 2010.

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Unemployment

Key Takeaways 

  • Arkansas’s employment levels recovered more quickly from the COVID-19 pandemic than the 2008 recession.  
  • Unemployment is relatively low in Arkansas, and unemployment gaps among demographic groups are decreasing.  
  • Young workers without a college education are most likely to suffer job losses during economic downturns.  

Arkansas rebounded relatively quickly from COVID-19 related unemployment 

The COVID-19 pandemic was a historic disruption to businesses and workers, but recovery in Arkansas has been relatively swift. Although Arkansas’s employment loss during the COVID pandemic was greater than the 2008 recession, workers returned to their jobs faster than before. After the COVID recession, it took about 27 months for Arkansas’s employment numbers to return to pre-pandemic levels. It took much longer (more than 90 months) for employment to recover from the 2008 recession.  

Arkansas’s employment rate was also more resistant to COVID related impacts compared to the national unemployment rate. The 2020 annual unemployment rate for Arkansas was 6.2% compared to 8.1% nationally. By the end of 2022, the Arkansas unemployment rate of 3.7% was nearly the same as that of the overall United States (3.6%). 

However, many of the jobs Arkansas added since the pandemic are in the leisure, hospitality, and other services sectors. These low-paying jobs led the Arkansas post-COVID recovery. 

Employment is rising and equalizing across groups in Arkansas 

In general, current unemployment is low in Arkansas and the nation compared to historic levels. Arkansas unemployment has closely followed the national downward trend, dropping 57% from 2010 to 2022. It is currently comparable to surrounding states and just slightly behind the national average.  

The gap in the unemployment rate between Black and White workers in Arkansas remains, but has narrowed substantially in recent years. This unemployment rate gap has decreased 81% since 2010.  

Young workers with low levels of education are most vulnerable to economic downturns 

Arkansans across the spectrum experienced increased unemployment during the pandemic, but socioeconomic factors insulated some groups from the most severe economic impacts. Older workers and workers with college degrees experienced far less pandemic job loss rates than many younger, less educated workers.  

From 2019 to 2020, unemployment in Arkansas jumped up 5.4% for our youngest workers (16-24 years old). Unemployment rose substantially less for older age groups: 2% for those in the middle of their career (25-54) and 3% for those 55 and older.  

COVID era unemployment increased the most for workers with just a high school diploma (up 3.4%) or some college education (up 4.0%). Workers with at least a bachelor’s degree were much less likely to lose their jobs from 2019-2020 in Arkansas; their unemployment rates increased 1.4%. Although workers without a high school diploma saw surprisingly steady unemployment rates through the pandemic, their overall unemployment rates remained among the highest. 

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Footnotes

  1. Source: U.S. Census Bureau, Population Estimates Program (PEP) ↩︎
  2. Fastest growing by population. Source: Pew Charitable Trusts, “Southern States Gain Residents the Fastest,” https://www.pewtrusts.org/en/research-and-analysis/articles/2023/05/17/southern-states-gain-residents-the-fastest ↩︎
  3. This measure includes all public and private sector jobs except agricultural employment. ↩︎
  4. The Government category includes Federal, State, and Local government employees ↩︎
  5. The Other Services includes activities such as equipment and machinery repairing, promoting or administering religious activities, grantmaking, advocacy, and providing drycleaning and laundry services, personal care services, death care services, pet care (except veterinary) services, photofinishing services, temporary parking services, and dating services. Private households that engage in employing workers on or about the premises in activities primarily concerned with the operation of the household are included in this sector. ↩︎
  6. The Labor Force refers to people who are either employed or who are looking for work. The Labor Force Participation Rate is the ratio of the total Labor Force to the entire pool of working age population (ages 16-64). ↩︎
  7. Source: AARP Public Policy Institute, “Valuing the Invaluable: 2023 Update,” https://www.aarp.org/content/dam/aarp/ppi/2023/3/valuing-the-invaluable-2023-update.doi.10.26419-2Fppi.00082.006.pdf ↩︎
  8. Source: AARP Public Policy Institute, “Valuing the Invaluable: 2023 Update,” https://www.aarp.org/content/dam/aarp/ppi/2023/3/valuing-the-invaluable-2023-update.doi.10.26419-2Fppi.00082.006.pdf ↩︎
  9. Source: US Chamber of Commerce Foundation, “Understanding America’s Labor Shortage,” https://www.uschamber.com/workforce/understanding-americas-labor-shortage-why-one-million-women-are-missing-from-the-workforce ↩︎
  10. Source: Saint Louis Federal Reserve “Snapshot Child Care And Arkansas’s Economy in 2021” https://www.stlouisfed.org/-/media/project/frbstl/stlouisfed/publications/bridges/2022/vol-4/childcare-factsheet-arkansas-825px.jpg?sc_lang=en&hash=31C43E0A596C51065AF50E5A245D3C08 ↩︎
  11. From February 2020 to December 2021. Source: Saint Louis Federal Reserve “Snapshot Child Care And Arkansas’s Economy in 2021” https://www.stlouisfed.org/-/media/project/frbstl/stlouisfed/publications/bridges/2022/vol-4/childcare-factsheet-arkansas-825px.jpg?sc_lang=en&hash=31C43E0A596C51065AF50E5A245D3C08 ↩︎
  12. Source: Child Care Aware, Appendix XIV https://www.childcareaware.org/demanding-change-repairing-our-child-care-system/ ↩︎
  13. Source: Child Care Aware, Appendix XIV https://www.childcareaware.org/demanding-change-repairing-our-child-care-system/ ↩︎
  14. Source: Arkansas Advocates for Children and Families, “Arkansas Ranks 43rd In Child Well-Being While Inaccessible Child Care Pushes Parents To The Breaking Point,” https://www.aradvocates.org/arkansas-ranks-43rd-in-child-well-being-while-inaccessible-child-care-pushes-parents-to-the-breaking-point/ ↩︎
  15. Source: Excel by Eight, “State of Child Care in Arkansas,” https://www.excelby8.net/state-of-child-care-in-arkansas/ ↩︎
  16. Source: Economic Policy Institute, “The Productivity–Pay Gap,” https://www.epi.org/productivity-pay-gap/# ↩︎
  17. Source: Economic Policy Institute, “CEO pay slightly declined in 2022,” https://www.epi.org/publication/ceo-pay-in-2022/ ↩︎