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Experts told a Senate committee Tuesday labor supply and demand continues to hinder Oklahoma’s economic recovery from the COVID-19 pandemic.

OKLAHOMA CITY — Oklahoma’s economic recovery from the COVID-19 pandemic continues to be hindered by a mismatch in labor supply and demand along with a shortage of quality, affordable child care options, experts told a state Senate committee Tuesday.

Drew Dugan, vice president with the Oklahoma City Chamber of Commerce, said the labor supply and demand differences are historic, though they’ve been developing for a long time.

He said businesses are not back to where they were pre-pandemic. They continue to struggle to balance child care shortages, school closures and questions about whether they’ll be able to retain workers who might not want to return to in-person office work as COVID-19 cases continue.

Paula Koos, executive director of the Oklahoma Child Care Resource Referral Association, which provides free assistance to parents seeking child care and training to providers, said Oklahoma is struggling with “child care deserts” across the state.

Lack of child care has been a critical driver of women exiting Oklahoma’s workforce, she said. Parents, in particular, are struggling to find child care options during nontraditional work hours. Koos said more than a quarter of requests for assistance came from parents looking to work nontraditional schedules that include evenings, overnights or weekends.

“Our economy hinges on making child care more accessible and affordable for families of young children,” Koos said. “Many low-skilled workers will opt to participate in the labor force if assistance is available to offset the financial burden of child care costs. If you want women back in the workforce, there have to be quality child care options available for their children.”

In a report issued ahead of the hearing, Chad Wilkerson, vice president and economist at the Oklahoma City branch of the Federal Reserve Bank of Kansas City, said Oklahoma has experienced a rapid economic recovery, already pushing unemployment near the previous 3% record low pre-pandemic.

He said there are considerably fewer unemployed Oklahomans looking for employment, but also fewer people “on the sidelines who have stopped looking for work.”

Wilkerson said many employers are reporting a decline in the number of applicants, and the shortage of available workers will likely be ongoing.

“Because of this, many firms are making operational adjustments, including increasing wages and overtime, up-skilling or reskilling existing workforce, limiting production capacity or investing in automation,” Wilkerson said.

Joanne Davis, executive director of the Oklahoma City Black Chamber of Commerce, said the impact of COVID-19 will be felt for years to come.

“Unfortunately for small businesses, who are the engines of our economy, many will not recover because of their inability to hire and keep employees,” Davis said.

For businesses in the service industry, fear of COVID-19 has prevented many of their employees from returning and instead has pushed them to find work in other industries that allow remote employment, she said.

If small businesses, which are still recovering from the pandemic, cannot afford to pay $15 to $18 an hour and offer benefits like sick leave, insurance, alternate work schedules and the ability to work virtually, their applicant pool is small, Davis said. The cost of child care also is deterring women from returning.

Davis said lawmakers need to address the issues impacting businesses.

“It really has tentacles that reach far beyond some of the things that we can’t see,” she said. “But if we don’t solve this problem with our small businesses, our economy is going to suffer, and not just today, but for years to come,” she said.

State Sen. Carri Hicks, D-Oklahoma City, said with so few people “sitting on the sidelines,” businesses and lawmakers may have to look at ways to incentivize people to return to the workforce, including by offering health insurance and paid family leave and by ensuring accessible child care is available.

“I think it’s very important for all of us to consider ways in this legislative body that we can address some of those challenges or encourage our partners in the business community to also be thinking about long-term solutions to making sure that people feel safe, protected and inspired to work in Oklahoma,” she said.

Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at jstecklein@cnhinews.com.

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