State of Arkansas’ Workforce

SNAPSHOT: ARKANSAS LABOR AND EMPLOYMENT STATISTICS

According to the most recent economic data, Arkansas has a labor force of 1.36 million individuals.[1] As of July, 1.31 million Arkansans were employed, and 44,558 Arkansans were unemployed. The state’s labor force participation rate (LFPR) remained at 57 percent. Since last year, the LFPR has ticked up slightly (0.5 percentage points).

In July 2022, Arkansas added 11,200 net payroll jobs, and its unemployment rate rose by 0.1 percentage points to 3.3 percent. In the past 12 months, Arkansas added 36,600 payroll jobs, and the unemployment rate fell by 0.7 percentage points from 4 percent. Among the 50 states and the District of Columbia, Arkansas ranks 25th for a percentage gain in private-sector payroll employment over the past 12 months.[2]

According to the latest U.S. Census data, most Arkansans (56.1 percent)[3] are employed in the top five occupation groups: business and financial operations, healthcare, installation maintenance and repair, construction, and community and social services.

The 2021 Arkansas Labor Market and Economic Report reported that the top 10 occupations projected to grow in 2022 included: clergy, insurance sales agents, electricians, nurse practitioners, financial managers, general and operations managers, software developers, janitors, and sales representatives.[4]

Among those comprising the Arkansas workforce in 2021,[5]

• 6.1 percent had less than a high school degree;
• 30.8 percent had a high school degree;
• 26.6 percent had some college/associate’s degrees;
• 36.5 percent had a bachelor’s degree or more.

Males make up 55.3 percent of Arkansas’s full-time civilian workforce, and 44.7 percent are female.[6] 

INCREASING JOB OPPORTUNITIES AND ECONOMIC GROWTH IN ARKANSAS

Proposals to eliminate the state income tax should help grow the state’s economy and enhance population growth; the following specific actions relating to workforce programs should also be implemented to enhance Arkansas’s employment potential.

OPPORTUNITY FOR REFORM: ELIMINATING BARRIERS TO WORKING IN ARKANSAS

The current administration implemented a host of working groups and commissions charged with reexamining the onerous burdens of occupational licensing in Arkansas. The state of Arkansas belongs to a consortium of states to study occupational licensing. First established in 2013 and despite two installations of $7.5 million in federal grant money, little is publicly available to determine how the consortium’s findings have led to measurable policy changes in Arkansas. 

According to West Virginia’s Knee Center, occupational regulation directly impacts approximately 25 percent of workers in the United States; this percentage has grown from 5 percent in the 1950s. Today, Arkansas requires occupational licensing for roughly 20 percent of jobs.[7] Since 2016, 18 states have enacted some form of occupational licensing reform ranging from universal licensing recognition to reciprocity agreements with neighboring states.

OCCUPATIONAL LICENSING HARMS POOREST ARKANSANS MOST

According to the Institute for Justice study in 2017, Arkansas ranked as one of the “worst states” in the Nation when it came to “licensing lower-income occupations.”[8] Arkansas’s licensing laws earned the state the third most burdensome in the Nation. On average, “Arkansas requires $246 in fees, 642 days of education and experience, and about one exam” per license.

According to findings from the Arkansas Center for Research in Economics,[9] if Arkansas were to lower its requirements for lower-paying jobs to match Mississippi’s occupational licensing requirements, prices for services in Arkansas would decrease by 4.5 percent.[10]  This study has also found that higher levels of licensing restrict employment opportunities in Arkansas while increasing consumer costs.

PROGRESS SLOWLY MADE

Fortunately, in 2019 the Arkansas General Assembly passed Act 600,[11] which mandated sunset reviews of every licensed occupation in Arkansas over the next six years.[12] In year one, the commission examined 51 licenses issued from 17 different agencies or boards.[13] While transparency and centralized data are lacking for the commission’s findings at this time, the example of Texas’s Sunset Advisory Commission reveals solid economic benefits for taxpayers. Studies estimate that due to Texas’s sunset reviews, taxpayers in Texas have saved $1 billion since 1977.[14] 

LEGISLATIVE RECOMMENDATION: UNIVERSAL LICENSING RECOGNITION

The General Assembly should pass a universal licensing recognition bill in the next legislative session. While attempted in prior sessions, the earlier versions did not include information about criminal background checks and the requirement of good standing with a state board before reciprocity is awarded.

REDUCE LICENSING FEES ACROSS THE BOARD

Because Arkansas’s licensing fees are higher than many other states and harm low-income earnings the most, the state should slash licensing fees for all occupations by at least 15 percent.[15]

The remainder of this document provides a window into additional policy proposals the next Arkansas administration and General Assembly should consider and implement.

OPPORTUNITY FOR REFORM: BETTER OVERSIGHT, MORE ACCOUNTABILITY NEEDED FOR EXISTING WORKFORCE PROGRAMS

Similar to the federal level, most of Arkansas’s existing workforce programs do not track the success rate of a program’s graduate obtaining a job due to the government-funded program. For example, the 2021 annual report from the Arkansas Division of Workforce Services (ADWS) highlights that the number of jobseekers to receive employment services in 2021 was 169,299 individuals, but it fails to report the number that actually obtained employment as a result of the ADWS service.[16]

Another area for potential reform within ADWS is to match the needs of employers more effectively with the skills potential employees possess. Arkansas currently has a free online job site that is supposed to accomplish this matching goal. Unfortunately, despite 6,268 employer contacts logged into the system, data is not publicly available to determine the success of matching. In 2021 alone, the site had more than 6,500 active jobs listed.^[17]

As an improvement from prior websites, additional tools should be implemented to enhance or revamp Arkansas JobLink’s offerings. A private example from the privately funded Northwest Arkansas Council provides a good start.[18]

In FY 2021, Arkansas’s Workforce Services Division spent more than $2 billion[19] in operating expenses and had another $6 billion in grant money at its disposal.[20] ADWS has ample funding, but additional oversight and tracking output are needed. With roughly 1,000 state employees, other opportunities to reform ADWS exist and should be considered.

OPPORTUNITY FOR REFORM: APPRENTICESHIPS, MATCHING, AND PARTNERSHIPS WITH PRIVATE COMPANIES

According to state data, since 2015, Arkansas has increased the number of registered apprenticeship programs from 82 to 140. As a result, total state apprenticeships have grown from 4,000 to 9,000. Additional growth can still be achieved in this area by identifying more opportunities with employers for an apprenticeship. 

Arkansas should also do more to “match” job-required competencies (knowledge, skills, and abilities) with the competencies of job seekers in the available database and develop digital services that will allow a real-time match between these two. An example from Mississippi demonstrates how this can be achieved. In Mississippi, the state’s site included several value propositions in the system to attract users, including electronic notifications sent to job seekers within a specific radius (1 mile, 2 miles, 15 miles, etc.) of newly listed opportunities and reports sent to employers about interest from job seekers. An innovative feature identified service and skills gaps between a job seeker and a job. Based on this analysis, the system could identify the action needed to create a perfect match between job seekers and job opportunities.