The State of Workforce Development in LMI Communities across the Eighth District

September 22, 2020
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Across the Fed’s Eighth District,Headquartered in St. Louis, the Eighth Federal Reserve District includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. a growing share of community stakeholders in low- and moderate-income (LMI) communities reported increasing demand for workforce development services, according to the 2019 Community Development Outlook Survey.

The survey—conducted by the Federal Reserve Bank of St. Louis—asked about trends affecting the region’s LMI communities. (It’s important to note that survey responses were collected between Oct. 29 and Dec. 9, 2019, or before COVID-19 became widespread. For a more recent snapshot of how COVID-19 is affecting LMI stakeholders in the Eighth District, see the Sept. 2, 2020, news release, “Fed Survey: Pandemic Is Straining Organizations Serving Low- to Moderate-Income Communities.")

In the pre-pandemic survey, 59.3% of community stakeholders reported that demand rose by LMI individuals and households for the workforce development services offered by these stakeholders, while 31.5% described demand as staying the same. Meanwhile, 43% of stakeholders reported an increasing ability by their organizations to provide direct assistance on workforce development, and 38.3% said their ability stayed the same.

Employment Barriers

The community outlook survey also asked stakeholders to identify what they saw as the greatest employment barrier facing those who live in LMI neighborhoods:

  • 19.6% reported adequate wages.
  • 15% identified lack of adequate education.
  • 14% said the lack of essential skills (soft skills).
  • 14% reported transportation.

Other issues described as the greatest barrier included technical skills, criminal background checks, job availability and substance abuse, each reported by 6.5% of participants.

Those polled were also asked about what they saw as the biggest challenge to training LMI workers to meet the demands of the existing labor force:

  • 38.3% reported lack of coordination by stakeholders and providers for improved partnership opportunities.
  • 16.8% reported connecting the credentials of newly trained workers with current job openings.
  • 12.1% reported alignment of occupational standards and clarity of job requirements to create career pathways.

Employer Partnerships

The survey also revealed that 57% of community stakeholders with workforce development services worked directly with businesses on hiring or improving the credentials of current workers. More than three-quarters reported working with business that had 500 or fewer employees.

Participants also cited insufficient wages (20% of respondents) or the lack of consistent and flexible funding streams (also 20% of respondents) as the biggest obstacle preventing partnerships with employers.

Notes and References

  1. Headquartered in St. Louis, the Eighth Federal Reserve District includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Additional Resources

This blog offers relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.

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