Natural State News

Things are looking up for the Natural State. 

With a low unemployment rate compared to many other states and strong job growth reported recently across multiple industries, Arkansas' economy is poised to emerge powerful and stable. 

Randy Zook, president of the Arkansas Chamber of Commerce, told Natural State News that the positive economic outlook can be partially accredited to Gov. Asa Hutchinson and the legislature's decisions during the pandemic.

"Arkansas never really shut down, like in many other states," Zook explained. "Our governor maneuvered through this very effectively and our businesses managed it very effectively. We never had the absolute shutdowns like in some coastal states. We never got as deep into the ditch."

Many industries in Arkansas continued to operate in some form throughout the pandemic. While the hospitality industry halted temporarily, the manufacturing, transportation, construction and agriculture fields marched on. 

"We basically allowed manufacturers to continue to operate without interruption," Zook said, noting that that made "a huge difference" for the state's economic health during the pandemic and after.

Zook also nodded to the governor and public health officials for prioritizing efforts on the state's most-vulnerable populations, both the immunocompromised and those on the frontlines. 

"In terms of isolation, Arkansas' nursing home population is substantial," he said. "And health care workers and hospitals, there was a lot of attention paid on protecting them."

While the scramble for N95 masks and gloves seems a distant memory, Zook said that Arkansas performed well in making sure that PPE suppliers and the front lines were adequately connected and supported.

"We never overwhelmed our health care system. We never – we got close a time or two – but we never got to the point where there was select availability of bed space and ventilators and all that. That didn't happen," Zook said. 

According to data from the Mayo Clinic, Arkansas currently ranks 12th in the nation for the number of COVID cases per 100,000 people. Arkansas is recorded as having 11,561 positive cases since the pandemic started per 100,000 people for a total of 345,761 cases. The states with the highest record cases per 100,000 include the Dakotas, Utah, Rhode Island and Arizona.

Those are metrics of cases against population numbers, however. States with the highest total accumulative cases include mostly coastal states such as California (more than three million), New York (more than two million) and New Jersey (more than one million). 

"We did a good job," Zook said. "Our medical leadership across the state – hospital managers, doctors, health care and frontline workers, never got totally overwhelmed."

Also partially contributing to the strong economic foundation in Arkansas is the substantial influx into the state's workforce expected after Hutchinson ended federal pandemic unemployment benefits on June 26. 

"There will be an increase in the number of people looking for and taking jobs," Zook said. 

However, not that many Arkansans are out of work compared to the national average – rather, Zook said that a substantial number of Arkansans, as many as 50,000, are not working by choice, mostly people within a decade or so of retirement that had the opportunity to do so early. He explained that the amount of working-age Arkansas participating in the labor force is 5% less than the national average. 

However, according to Arkansas Business, the state's unemployment collection rate was a whole percentage point below the U.S. average in April and May of 2021, when the national rate reached 5.8% compared to Arkansas' 4.4%. 

Hutchinson is encouraged by the economic growth. According to Arkansas Business, she said the workforce “is in a transition now. Some are seeking retraining opportunities and others are delaying their return to employment. With workforce training programs available and with the urgent demand for workers, this is an excellent time for those who left the labor force during the pandemic to transition to a higher-skills job or a better-paying job."

Despite people needing to return to work and businesses that need to get back to pre-pandemic operation levels, Zook explained that there is still somewhat of a disconnect between the two that can't quite be defined as a labor shortage. 

"Are a lot of jobs open? Yes. Are there people who for some reason or another are not actively participating in seeking jobs? Yes," he said. "It's hard to say that we have a labor shortage. We have a shortage of people attempting or seeking employment. I think there's a subtle distinction there but it's important. We have plenty of people available."

Arkansas is instead experiencing a shortage of people with the skills, qualifications or circumstances– such as reasonably priced childcare – that make them capable of taking open jobs. 

The good news remains that Arkansas has plenty of good jobs available, Zook said, and all that needs to happen is to break the barriers between the employers and those seeking to be employed. 

Arkansas has recently launched its “Ready for Life” website, a program designed to create a resource with everything Arkansans need when searching for employment or job training. The site lists more than 8,800 jobs and 9,000 courses teaching career-related skills. This site has assisted Arkansans in their transition from unemployment to a job by providing greater skills to re-enter the workforce with higher pay.

"We have bountiful employment opportunities available, high levels of hiring activity and efforts," the chamber president continued. 

Just how to bridge that gap is the million-dollar question. Zook said that while some people have taken advantage of the time off and in isolation during the pandemic to develop new skills and qualifications to open new job pathways, it hasn't been enough, and still begs the question of who will step into the less skilled position that the person vacated if the employment conditions and compensation aren't satisfactory. 

"We are seeing an elevated rate of quitting because people are confident they can go to a different, better employment situation pretty readily because of the number of open positions," Zook said. "In nearly every sector of the economy, everything from hospitality to transportation to construction, manufacturing, government, and health care, there are jobs available in every part of the economy."

Aside from the rapid turnover in both intersectional and intrasectional industries, Zook said that the biggest obstacle in bringing the Arkansas economy to full steam is encouraging the workforce to get vaccinated. Some people refuse the vaccine, which may prevent them from certain employment opportunities, and others are reluctant to return to work because of their unvaccinated counterparts. 

"It's an issue," Zook said. "We are working through it by promoting, encouraging, and in some cases requiring vaccination for re-entering the workforce." 

Overall, the chamber president said that Arkansas' economic outlook is the most positive he's ever seen. 

"I'm not overstating when I say that this economy is in the process of growth that we've not seen in a long time, decades," he said. Through the combination of various corporate and municipal tax revenues and lingering pandemic relief funds, Zook said that Arkansas' economy is breathing in an "unprecedented amount of money." 

"The Arkansas economy is going to have a really strong experience over the next couple of years as we work our way through the pent-up demand for goods and services," he said.

As long as the state's restaurants and hotels get staffed, Zook said the Natural State will be at full steam. Arkansas Business reported that 10 major industry sectors had strong job growth from May 2020 to May 2021. Three industries that saw high growth were leisure and hospitality, which added 20,300 jobs; professional and business services, which added 13,200 jobs, and manufacturing, which added 11,000 jobs.

"The supply chain disruptions are still happening and it's going to take some time to work through all those, there's going to be starts and stops and problems," he said, "but that will all work out in the end and in the meantime our economy is hitting on all eight cylinders."