‘Brain drain’ alarm escalates: Omaha and business leaders flag job lag

OMAHA, Neb. (Nebraska Examiner) - Better jobs, opportunities, recreation and desire for diversity and belonging. Those surfaced as top reasons an Omaha audience recently gave for why talented people they know fled for other states.

What could stop that so-called brain drain?

The group offered advice, including: Higher paying jobs with growth potential, affordable housing, better public transit and bike lanes, beautiful spaces, an inclusive community and political leadership that listens.

“We aren’t just an ag state,” one person responded in the interactive electronic survey taken at a public forum hosted by the City of Omaha Tuesday that featured a panel of speakers and drew an estimated 125 people.

Spotlight intensifies

About 70 attendees participated in the poll aimed at informing the city’s efforts to better attract and retain talent, particularly as it assembles a new “comprehensive plan” to guide growth and development over the next 20 years.

Given that more than half of Nebraska’s brain drain originates in the metro Omaha area, it is significant that city leaders are stepping up efforts to better understand and attack the problem, said Josie Schafer, a public policy and data researcher at the University of Nebraska at Omaha who spoke at the event and also advises the Nebraska Legislature on workforce trends.

Since 2019, about 17,000 people who have earned a bachelor’s degree or higher have left Nebraska and just over 10,000 moved from the Omaha area, said Schafer, who heads the UNO Center for Public Affairs Research.

“I’m really excited to see the city jumping in on this conversation and finding solutions that fit for us,” she said, noting that its urban economy and other circumstances differ from the many rural areas of the state.

Other local and state efforts and groups also are converging to stem the exodus in what many see as an alarming wake-up moment for Nebraska as a whole, and particularly its two largest metros.

The Greater Omaha Chamber of Commerce, whose audience covers eight counties, is about to commission an in-depth brain drain-focused study, a spokesman said last week. Sparking that was the chamber’s latest “Barometer report,” which ranked the Omaha metro sixth lowest of 23 peer metros nationwide for jobs, talent and investment.

A lead economist working on the report said the findings shined light on “uncomfortable truths” that must be confronted with “urgency.” The chamber’s young professionals group also had been gathering feedback.

Amplifying its alarm is the Aksarben Foundation, a more than century-old Nebraska business organization. Its research shows Nebraska’s two largest metros, Omaha and Lincoln, have lagged 68,000 jobs behind where both would have been had the markets kept pace the last five years with peers, including Des Moines, Sioux Falls, South Dakota and Fayetteville, Arkansas.

Further probing by Aksarben’s research team has revealed widespread talent and wage loss in every region of the state, driven largely, it said, by scarcity of quality jobs and limited wage growth. Now the Aksarben leadership has formed a new nonprofit, “Strengthening Nebraska Families” to educate and stir action to elevate the state’s competitiveness.

‘Without connection’

Aksarben’s Dana Bradford said discussion about brain drain — and the forces that for more than a decade have pushed more folks out of the state than in — have been going for some time, but “without connection.”

As the state’s budget woes become more pronounced and persistent — a $471 million shortfall is the latest projection — people and policymakers are starting to pay more attention, he said.

“It’s pretty clear if Omaha and Lincoln were growing anywhere like they should have been we wouldn’t have the problem we have right now,” said Bradford, also a past chair of the Omaha chamber. “The reality is Omaha and Lincoln deliver 60% of tax revenues. If Omaha is struggling, everybody struggles.”

On Monday, the Aksarben Foundation is hosting a private meeting in the Ashland area, between Omaha and Lincoln, for select business, elected and other leaders intended to stimulate more discussion.

Nebraska officials including Omaha Mayor John Ewing Jr. are to speak, as are experts expected to spotlight strategies in play or working elsewhere in the country to grow high-paying jobs and the talent pool.

Ewing told the Nebraska Examiner he recognizes the urgency for quality job creation and wants to partner with state lawmakers and other elected officials on developing an economic incentive package that raises Omaha’s allure to new employers.

“We also have companies I’ve talked to that would like to expand here, but the incentives are greater in other places,” he said, adding that he’s been told existing incentives are too laborious and should be easier to navigate.

The Democratic mayor, finishing his first year after ousting a 12-year Republican incumbent, said he and his administration are working to increase public and private support for business internships, public transportation options and affordable housing, which survey-takers underscored as pieces that could keep them from leaving Omaha.

Public spaces are another focus to raise Omaha’s “fun” factor, Ewing said. He cited efforts to build a downtown soccer stadium and an expanded multi-purpose athletic complex in northwest Omaha that need a state tax incentive that Gov. Jim Pillen has for now put on ice, citing budget concerns.

Ewing is promoting new arrangements in which private foundations take on management and maintenance at certain city parks, saying that would allow city park staff to focus on fewer properties.

Creation of the new comprehensive 20-year growth and development plan also will help shape Omaha’s future infrastructure, amenities and talent-retention strategies. The city has been hosting meetings, including Tuesday’s brain drain-focused discussion, to inform the document.

Land use updates, for example, could promote more “walkability” in districts. Other rules could encourage more communal areas and “belonging.” Those themes arose in survey recommendations.

Brain gain winners

While social, civic and environmental factors play a role in brain drain, Schafer said that independent and Census-based research overwhelmingly point to jobs and career growth potential as top drivers of the out-migration trend.

A look at places outperforming Omaha in the brain gain contest, some without coastal sunshine and splash, underscore that Nebraska could compete with the right game plan, she said.

Denver and Stockton, California metros are in the pack where people recently moved to when leaving the Omaha area, census data shows. But Des Moines and Kansas City consistently rank in the top five, said Schafer.

“These are places that have similar settings, environments, weather,” she said. “It’s not that they’re searching for something totally different from Omaha. The evidence really points to job opportunities as that leading factor.”

As Omaha lost people to other states, peer metro areas that gained domestic migrants included Knoxville, Tennessee and Tulsa, Oklahoma, according to Census data.

In Tulsa, a program that has paid more than 3,400 remote workers $10,000 each to move there and diversify the workforce reportedly has returned four times its investment to the local economy.

According to the Knoxville News Sentinel, transplants consistently say they were drawn to that metro area by job opportunity, lifestyle change and affordable cost of living. The state of Tennessee does not levy a personal income tax.

According to the Aksarben study conducted by Development Counsellors International, the Omaha metro’s employment level barely grew over the past five years, inching up from 500,000 in 2019 to 512,000 last year. DCI said Lincoln’s employment and wage growth were nearly the same as Omaha’s.

A comparison group of metros, in contrast, grew jobs five times faster. The group: Colorado Springs, Des Moines, Fayetteville, Sioux Falls, Huntsville, Alabama, Raleigh, North Carolina and Boise, Idaho.

Bradford said the new Strengthening Nebraska Families nonprofit aims to educate and provoke conversation about declining discretionary income for families. The DCI study and Aksarben leaders point to recruitment and development of “primary” jobs as a goal.

Defined in the report as positions that pay above-average wages and produce goods or services for markets beyond the local area, primary jobs bring new wealth and dollars into the local and state economy. They also lead to creation of additional jobs in secondary sectors, such as medical, local banks, car dealerships, retail stores and restaurants.

Losing young adults to other states comes at a high price, the experts say, as those out-migrants build families and future workforce elsewhere.

Forum highlights

Among other highlights shared at the City of Omaha-organized meeting at Creighton University campus:

• Brain drain, or net out-migration of Nebraskans with a bachelor’s degree or more, has persisted since 2010, with losses of 1,104 people in 2010, 4,610 in 2022 and 3,622 in 2023. 
• The Omaha metro area is growing in population due to births and immigration, surpassing the million-person mark, according to Census data released earlier this year. However, for domestic migration, the state’s largest metro loses 723 people annually, according to UNO’s analysis of Census data between 2020 to 2024. 
• Meanwhile, the Tulsa metro posted annual domestic migration gains of about 26,000; Kansas City about 8,000, Des Moines nearly 17,000. The Lincoln metro’s annual net domestic loss was 1,720.
• Top places from where new Omahans came in recent years: Lincoln metro area, Asia, Europe, Sioux City metro area and the Des Moines metro area.

Experts on the “We Make Omaha’s Talent x Place” panel moderated by Omaha planner Sydney Embray also included Laurel Oetken of Open Range; Tammy Green of Metropolitan Community College and Dell Gines of International Economic Development Council.

Gines encouraged less emphasis on population growth and more on creating a distinct identity and quality of life improvements.

Green advocated for investment in growing skills for existing young populations and creating welcoming environments.

Oetken said young generations seek an inviting entrepreneurial and tech ecosystem.

Lessons learned

Aksarben’s Bradford said lessons can be learned from cities like Tulsa and the Kansas City’s Overland Park area, which attracted a new Fiserv strategic fintech hub by offering an incentives package that helped secure a commitment of 2,000 new jobs.

Kansas is giving Fiserv more than $154 million in state incentives over the ten years, the Kansas City Star reported, and the city puts the average salary at $125,000.

“We have to do these kinds of things to compete or we’ll have no opportunities for success,” Bradford said. “Or we can do nothing and see how that goes.”

Nebraska Examiner is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Aaron Sanderford for questions: info@nebraskaexaminer.com.

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