RALEIGH – The Triangle labor market is expected to attract talented workers well into the future, even should the national economy enter a recessionary period, a new report concludes. But there’s a problem – lack of workers.

The latest Labor Outlook for Raleigh-Durham report from commercial real estate firm Jones Lang LaSalle IP, Inc. (JLL) asks a different question: Are there enough workers for now and the future?

“There’s nuance,” said Brett Cox, research manager at JLL, and one of the authors of the report, in an interview with WRAL TechWire.

“Are there enough workers currently seated in our market,” asked Cox.  “I would say no, given the amount of demand, as seen in the charts of the report.”

Still, though, Cox noted that the Triangle remains among the leading regions of the sunbelt and in the nation when it comes to employment growth and the economic climate, no matter whether the economy is in a recession, a recovery, or an expansion.

“It is the ability to attract and grow talent that will ensure the continued success of the Triangle market in the short-, mid-, and long-term,” said Cox.

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Headwinds ‘at every level’ for Triangle labor market

Nationally, one of the key metrics that economists are tracking in regard to the labor market is the country’s labor force participation rate.

That’s because more people joining the labor force could be key to a so-called “soft landing” for the U.S. economy, UNC-Chapel Hill Professor Greg Brown said last month during a virtual briefing about the labor market and U.S. economy.

But there’s another long-term demographic trend impacting labor markets across the country, and that’s the country’s population growth rate, which has fallen steadily since the early 1990s, as has the nation’s labor force participation rate, according to data from the World Bank and the U.S. Bureau of Labor Statistics, cited in the JLL report.

US population growth, labor force participation rate on the decline

US Population Growth and Labor Force Participation Rate (since 1990). Chart: JLL Research. Data: World Bank, U.S. Bureau of Labor Statistics.

“Worker supply has become a global issue as it’s spread beyond advanced economies and into the global economy,” the JLL report reads.  In this global and historical context, the Triangle faces labor supply headwinds “at every level,” according to the report.  Still, the region has fared well, and despite the headwinds in the national and global economy, the Triangle is “positioned to fulfill the continued demand for labor.”

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Triangle economy expanding, despite constraints

Since the Great Recession, the Triangle’s labor economy has experienced a steady downward trajectory in worker supply relative to demand.

For instance, while the regional economy had a ratio of about three unemployed workers for every one job post in the period between 2015 and 2017, as of July 2022, there was 0.79 workers for every job opening in the region, according to JLL.  Put another way, there were about four unemployed people for every five open jobs, as of July 2022.

More jobs than workers in the Triangle

Ratio of Unemployed Persons to Unique Job Postings in Raleigh-Durham (3-month rolling average). Chart: JLL Research. Data: JLL Research, Lightcast.

That’s a constraint to the region’s economic output, the report notes.  The number of high-tech job openings rose to the third-highest level on record, last month, according to a report released on Monday by NC TECH that tracks IT Job Trends.

“The data would say, no, there are not enough workers to fill the current number of job openings,” said Cox.  “It couldn’t be any more black-and-white.”

But yet, even with that constraint, the region is among the nation’s best for employment growth as percentage gained in employed persons and a leader among the sunbelt markets between 2016 and 2021 as well, Cox said.  Further, said Cox, the region remains well-positioned in the short-term, mid-term, and long-term, due to its strengths.

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What’s happening in the Triangle’s labor market right now?

Predominantly, the region is expanding its workforce through attracting workers from other parts of the state and other parts of the country.

And though the Triangle may have been thought of as a pandemic-era ‘boom town,’ with workers deciding to relocate from more dense urban areas due to the pandemic, the region was seeing an uptick in migration from other regions well before the onset of the global COVID-19 pandemic.

Nearly 200,000 people between the ages of 10 and 59 relocated to the Triangle in the prior decade, and those migrants now make up about one-fifth of the region’s total population, the report noted.

Put another way, the labor market of the Triangle experienced a gain of 113 new workers every day from inbound migration, increasing the region’s employment base by 4.2% during the year, the report notes.

Who's moving to the Triangle?

Origin of Raleigh-Durham New Residents. Chart: JLL Research. Data: JLL Research, Redfin.

And for those who are not of working age, the report notes that the Triangle is more likely than not to be the employment center of choice when they do enter the workforce.

Recent research from Policy Impacts, Opportunity Insights, and the U.S. Census Bureau show that in the Raleigh-Durham commuting zone, about two-thirds of all young adults who grew up in the market lived in the market as of age 26.

“Though this rate is among the highest fifth of total markets analyzed, retaining an even greater share of young adults in the future is necessary to become a top-tier market,” the report notes.  Cox added that the data set studied every community zone in the country, and confirmed that the Triangle ranked in the top 20% of all markets analyzed for the retention of young adults.

Study: Raleigh remains a ‘pandemic boom town’ for people looking to relocate

Even in a recession, Triangle outperforms nation

During recessionary periods, the Triangle has “consistently outperformed the nation on multiple labor metrics,” the report finds.  That includes job growth above the national average during times of expansion and times of recession, as well as faster unemployment recovery during and following the nation entering a recessionary period.

For example, since 2004, the Triangle has outpaced the United States every year when it comes to job and employment growth, and experienced 27% more job growth than the nation during the prior two decades.

“A large factor in the market’s ability to retain and create jobs better than the country is the diversity of industries locally,” the report notes.  “This is especially apparent during the COVID-19 pandemic, where jobs declined nearly 3% less than the nation.”

Triangle outperforms US average

Job Growth Rate Since 2002. Chart: JLL Research. Data: JLL Research, Lightcast.

Will a recession bring more workers back to the labor force?

But it’s also the case that the Triangle outpaces the U.S. in other periods of recession, and during economic expansion.

In fact, JLL’s research shows that recessions don’t greatly impact labor market participation, rather, it is periods of prosperity where some choose to leave the labor force.

“My opinion is that a recession could be healthy for the labor market, as a whole, to push up that labor force participation rate,” said Cox. “But the long-term trends still show that labor force participation rate is going down.”

The Triangle, however, is well-positioned, because companies continue to expand in the region, and still others are selecting the region for new economic development projects that will add jobs to the local economy.  And workers may be attracted to the region to follow high-wage jobs and a relative low-cost of living compared to other metropolitan statistical areas.

“Still an issue in the long-term, but in the short-term, a recession might push more people back to work,” said Cox.  “The Triangle, whether we’re up or down, has proven that it is able to fill jobs, whether it be with people looking for jobs in the market now or attracting those workers from other markets to relocate here.”

Report: Raleigh No. 1 in share of workers earning $100,000; Durham also scores well