Nebraska’s shifting workforce demands amid ‘brain drain’ should sound alarm, researcher says

Feb. 13, 2023, 11 a.m. ·

The Nebraska State Capitol builiding in Lincoln, Nebraska
The Nebraska State Capitol building in Lincoln. (Photo by Fred Knapp, Nebraska Public Media News)

LINCOLN — More people have continued to leave than enter Nebraska from other states, and the loss is heavily those with an education level of at least a bachelor’s degree.

The worsening trend over the past decade is particularly alarming as 65% of jobs in the state and nation by 2030 likely will require at least some higher education, researcher Josie Schafer told a gathering of top education officials last week.

She said that, today, about 33% of Nebraska jobs are filled by people with bachelor’s degrees.

“We are losing people,” Schafer said. “And the trend is actually getting worse post-COVID.”

‘Unbelievably unexpected rates’

Schafer, who heads the Center for Public Affairs Research at the University of Nebraska at Omaha, presented an analysis of the state’s workforce shifts and challenges Friday to the NU Board of Regents.

The upshot is that high-skilled jobs are “growing at unbelievably unexpected rates” and that the pressure is on Nebraska educational institutions to train the next generation of workers — and on the entire state to attract and retain talent.

Ted Carter, president of the University of Nebraska system, underscored the urgency, saying that the majority of the nation’s jobs likely to be in action by 2040 haven’t even been invented yet.

“We don’t even know what they are,” he said.

Schafer’s overview of future labor and education demands was based on census data and other research. 

Good news, Schafer said, is that Nebraskans are hard working. She pointed to the state’s unemployment rate, one of the lowest in the country, and its high labor participation rate. 

Nebraska, she noted, is tied for second in the nation for its 90% labor force participation rate for people with a bachelor’s degree or higher. (That compares with about a 70% rate for the state as a whole.)

Little Huskers grow up

Still, she said, the job openings rate is 6.7% — which is why entities such as the Nebraska Chamber of Commerce & Industry have been focused on addressing the up to 80,000 positions the state has been unable to fill. 

“We have a challenge — and there’s no pool of workers that we can suddenly inject into that workforce,” said Schafer. 

While the state’s population overall since 2010 has grown about 7%, the bulk of counties, 69 of 93, have lost residents. That has created uneven growth, with most Nebraskans living in the three largest counties, Douglas, Lancaster and Sarpy.

Relative to other states, Nebraska actually fares well in growing its own population: Huskers ranked seventh nationally in 2021 for natural growth rate, or births minus deaths.

Problems stack up, though, as little Huskers mature.

Nebraska’s prime age worker group, 25- to 54-year-olds, makes up about 43% of the state’s population, and a more ideal share is over 50%, Schafer said. “Because that (would mean) we have lots of people in the workforce supporting the young and supporting our retiring population, letting people age in place here in Nebraska.”

Challenges of tomorrow

The 15- to 19-year-old cohort heading into the higher education stage and then the prime workforce stage, she said, has remained fairly steady in number and lopsided in representing urban areas. 

“What you can really see is there’s no huge pool of folks coming into this prime age workforce,” she said. “The challenges we have today are very likely the challenges we have tomorrow.”

The scenario becomes more grim with domestic migration, as more people have exited the state than have settled in Nebraska from other states each year since 2010.

Who’s leaving and staying?

For people with four-year degrees, the net out migration has been persistent and negative, Schafer said, prompting the term “brain drain.”

For perspective, she said, about 400,000 people with bachelor’s degrees or more are working in Nebraska, so losing about 4,500 last year was not “huge.” But she said the troubling trend should be reckoned with.

“Job opportunities are a big driver of that outmigration,” Schafer said.

Immigration is key growth

In contrast, a positive population influx  — “a clear and consistent source of growth for Nebraska” — has come from international immigration, she said.

Last year, CPAR data shows, the state saw a net increase of about 4,000 international residents, many drawn by the university system. 

Schafer also noted the contrast in current labor demands and those projected in the future.

Today, more Nebraskans work in lower-wage jobs (about 553,000) such as food preparation, office support and production than in high-wage occupations (about 466,000) such as computers, engineering and law, she said. 

“That’s a difficult growth position for the economy,” said Schafer, adding that low-wage earners have less spending power to help churn the local economy. (Low-wage earnings are considered less than the median income, about $41,000 a year, for people in the labor force.)

But that balance is “changing dramatically,” Schafer said, “in Nebraska and everywhere” with increased demand for a more educated workforce.

In terms of college degrees, she said Nebraska currently ranks in the middle of the nation, 26th among states, for people 25 years and older with a bachelor’s degree.

Workforce concerns rising among lawmakers 

To be sure, the share of college graduates and professional degrees has grown in Nebraska. But, said Schafer, “We would really have to dramatically grow to keep up with that national demand for a high-skilled workforce.”

CPAR research shows that about a third of the state’s working population has acquired some college credits or an associate degree. That’s a key group for the University of Nebraska to recruit for further preparation for four-year degrees or more, as they began college coursework and are already in Nebraska, she said. “An opportunity for us for sure.”

International populations and underserved people of color are labor force growth opportunities as well, she said. 

Carter counts about 307,000 Nebraskans with a partial college education and agreed: “It’s a huge target for us to get after.”

He said Nebraska has made strides recently with the Nebraska Promise tuition break, online education offerings and a legislative boost for internship programs.

State Sen. John Arch, speaker of the Legislature, in earlier remarks told the Regents that the state’s workforce and the university system’s role is a topic that has risen in appreciation in the Unicameral.

“We must have workforce,” the La Vista lawmaker said. “The keeping, the attracting, all of that is just essential to our future as a state.”