Increasing Labor Participation in the Region
 
December 19, 2017
By Stacy Burris
Director of Community Development

As recent headlines have mentioned, Indiana is nearing its lowest unemployment rate ever. In fact, according to Chmura Economics 2017Q4 data, the State’s seasonally adjusted unemployment rate is 4.0 percent which is below the national rate of 4.4 percent. The Radius region’s 4.2 percent unemployment rate is also lower than the State’s. One year earlier, for comparison, in October 2016, the unemployment rate in the Radius region was 4.6 percent. This means that businesses must work hard at finding employees to fill jobs. And one Southern Indiana business giant, Cook Group, is taking an innovative approach to doing so.

With the Great Recession ending more than eight years ago, the national unemployment rate and, subsequently, Indiana and the Radius region’s rate has since declined slowly. Does this decline indicate the overall economic health of the State and Radius region? The answer is, sort of. Unemployment is a difficult concept to define and Economists use it as only a piece of the economy puzzle.

The labor force classifies people as either employed or unemployed. Employed means people worked an hour or more as a paid employee or 15 hours or more as an unpaid worker in a family-owned business or farm. Unemployed refers to those 16 years or older who weren’t employed, but were available for work and actively looked for a job within the past four weeks.

Two key definitions to remember are the unemployment and labor participation rates. The unemployment rate is the share of the labor force actively looking for work, which in the State and the region is low. The labor force participation rate, however, is defined as how many people are working as a percentage of the population available to work.

The participation rate is an important metric to use when analyzing economic data because it reflects the number of people who are actively participating in the workforce. People not included in the rate either do not want to work or can’t work. They may be students, homemakers, or retired. The national labor force participation rate is 62.7 percent while Indiana’s rate is slightly higher at 63.9 percent and the Radius region’s rate is slightly lower at 61.2 percent.

The labor force participation rate has steadily declined along with the unemployment rate, which has puzzled economists. This points to fewer people wanting to work, not to fewer jobs.

As economic developers, we want to boost the amount of people that participate in the labor force to offer area businesses a workforce. Partners of Radius Indiana have taken steps to combat the declining participation rates. Cook Group has initiated My Cook Pathways, to encourage adults needing an Indiana High School Equivalency Diploma to earn one. In fact, if you are a current or future employee at Cook, you can earn your Indiana High School Equivalency Diploma while working at Cook part time. The program allows you to work for 28 hours a week in a position that does not require a high school diploma and take classes for 12 hours a week to prepare for the Test Assessing Secondary Completion (TASC). When you pass the TASC and demonstrate success in your part-time role, Cook will offer a full-time position in Production, Quality Control, Packaging, or Warehousing.

Cook also pays for the TASC and provides 401(k) and quarterly bonus benefits while you are working part-time.

Not only does this unique and successful program increase our region’s educational attainment but it helps to pull in those people who are otherwise not participating in the labor force.

Stacy Burris, Radius Indiana Director of Community Development


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