In the 2026 Fault Lines report, Lightcast investigates the largest present day labor market disruptors. The BBA’s data intelligence center, BHM IQ, discusses how these faults lines are shaping Birmingham’s regional labor trends.
View the full interview below with Lightcast’s Head of Strategy and Growth, Josh Wright, or keep reading to see our Market Intelligence Manager, Tatianna Turrentine-Long’s breakdown of the information.
About Lightcast and Fault Lines
Lightcast is a premier talent analytics provider designed to deliver actionable and impactful insights to organizations with needs centered around workforce and talent development. Through Lightcast, organizations are able to access data on job postings, talent density, economic mobility, and profile data to measure demand in hiring, industry growth, and how talent is moving across peer communities. Beyond talent and workforce intelligence, they work with organizations intentionally on strategic projects related to key initiatives surrounding goals to increase and improve talent attraction and retention.
In Q2 2026, Lightcast released a report called “Fault Lines” to analyze and describe identified disruptors in workforce from a global and national perspective. This report is designed to foster conversations around ways that organizations and stakeholders can mitigate these disruptors based on the data collected and analyzed by Lightcast.
Lightcast’s Fault Lines Report
According to Lightcast, disruptive fault lines in the global labor market are being driven by three main factors:
- Geopolitics – As migration slows down worldwide, countries are facing abrupt changes to their workforce landscapes. Many countries are shifting away from their dependencies on immigrant workers by heightening their focus on national talent development. A refocus on inland talent within a labor market that has historically relied on offshore talent impacts the overall equilibrium.
- Artificial Intelligence (AI) – There is a strong, but hasty, desire for AI investment and adoption – often not accounting for labor shortages for jobs with the lowest likelihood of or need for adopting AI technology. Globally, countries are entering into a modern-day “space race” to lead in the elevation and innovation of AI technology, often at the cost of neglecting necessary workforce investments in non-AI jobs where workforce supply is rising to meet employer demand.
- Labor Shortages – Demographic trends and labor market misalignments create a unique landscape of labor shortages. Globally, an aging population and declining birth rates create a broadening imbalance between workforce entries and exits. Skills-based labor shortages are geography-specific. As a whole, the US has more college graduates than jobs needing college degrees. This calls into question the prevalence of the skills mismatch problem evident between employer demands and talent availability to meet the demand.
Unprecedented geopolitical, technological, and socioeconomic factors add uncertainty to labor market projections. Since 2020, abrupt shifts in the global economy have taken place – COVID-19, global conflicts between stated allies and adversaries, and heightened restrictions on immigration policies and reactionary pullbacks from those policies. These fault lines are driving new trends in the labor force – starting with education. For example, most top-ranked universities in the world are located in the United States and have historically housed and educated global students, boosting the United States’ “Advanced Knowledge Economy.” With changes to US immigration policy and shifts in the prevalent mood surrounding immigration, the majority of talent is now staying within their home countries (i.e., China and India) to attend the high-ranking universities of their respective nations. Such trends ripple into future impacts on the US labor market as well as the present.
AI is also disrupting the distribution of labor market talent and opportunity. Lightcast observes this in their report by stating:
AI development might be focused on white-collar roles for any number of potential reasons, including that it’s the field the tech industry knows best, but perhaps most relevant is market pressure: AI investment is being directed to the places where the return is highest, not where it’s most needed. The result is lower demand in sectors where the supply of talent is already high, and little relief where the need is most acute. – Lightcast, “Fault Lines”, 2026
This realization means that, while AI adoption is necessary and pivotal in increasing a skilled labor force, it doesn’t account for everything when it comes to meeting the supply and demand needs from our workforce. For example, healthcare is an essential industry that is seeing a projected decrease in supply with a projected increase in demand with “low exposure” to AI and a lower likelihood of adoption. Lightcast also points to an unequal distribution of global talent within the AI sector, highlighting countries like the US as having a higher concentration of workers with AI skills than other countries. Contrary to the greater trend of a decrease in immigrant labor force, the US has recruited a great amount of AI talent from other countries (i.e., India is the top country for US recruitment of AI talent to the US) – individuals who are trained in their home countries, then leave for opportunities elsewhere.
All of these factors compounded have immediate and distant consequences as countries and the global labor market continue to shift amongst the aforementioned disruptors.
What does it mean for Birmingham, Alabama?
The effects of each fault line are felt across Birmingham, Alabama’s seven-county MSA (Birmingham, the MSA, or the region). As expansive as the impacts may be, so are the regional opportunities to decrease the negative repercussions of these disruptors through strategic economic development initiatives, partnerships, and placemaking.
Geopolitics and Birmingham
Global conflicts and national politics have impacted immigration patterns in the region and, in turn, shifted workforce demographics.
According to the American Community Survey conducted by the US Census, nearly 30% of those who have moved to the Birmingham MSA from abroad have obtained a bachelor’s degree or higher in 2024. This is a decrease from 2022, when nearly 40% of residents who moved from abroad had a bachelor’s degree or higher, paired with a lower number of migrants to the region overall. Nationally and regionally, increased challenges in sponsoring global talent mean that many employers are shying away from international hires. Still, major regional employers like the University of Alabama at Birmingham (UAB), which operates in both education and healthcare, have a constant need for diverse and specialized talent. The evolving impact of these changes in migration demographics and employment practices ranges across industries and occupations, including on jobs that require skills that may not be accessibly taught here.
In addition to the education sector, we see this impact in our manufacturing workforce as employers are seeing a gradual decrease in workforce and talent availability due to a shift in immigration patterns in the region. Some employers are having to change or lessen restrictions and screening requirements to offset the decrease in worker availability.
AI and Birmingham
Through ecosystem conversations and strategic initiatives to bring deep awareness, thoughtful adoption, and targeted upskilling of AI to the Birmingham market, the region is working to minimize adverse disruption, while amplifying positive impacts across industries. Organizations like Birmingham AI, TechBirmingham, and QuantHub, alongside economic development organizations and employers, are working together to provide space for conversation, actionable research, and upskilling programs aimed at matching regional talent to industry needs.
However, in terms of producing an AI-ready skilled workforce to meet the demands of employers in the region who have begun to adopt AI, there is a noticeable skill gap. In tandem, the region has many occupation sectors that are classified as high-demand, low exposure – meaning that these occupations have a low likelihood of adopting AI into their core work functions, but are occupations of need. These occupational groups include the Birmingham MSA’s largest job sector, healthcare, as well as retail and hospitality.
Birmingham is working to mollify the imbalance of AI labor market supply & demand through several key, tactical approaches:
- Cultivating partnerships and ongoing conversations within those partnerships to discuss the ongoing changes of AI and its impact on the labor market, but not in isolation. These partnerships are consistent, inclusive, and actionable, with an immediate positive yielded return as we see Birmingham emerge as a leading market in AI adoption.
- Developing workforce strategies that cater to all target industry sectors in the market while integrating conversations of AI adoption and upskilling. There aren’t industries that are favored over others because they may have a higher likelihood of rapidly adopting AI strategies and recruiting AI talent.
- Actively working with employers across all industry sectors to discuss the impact of these gaps and their current capacity for AI adoption.
An example approach is the BBA’s engagement with the Opportunity@Work and Brookings Institution AI Readiness Lab, an initiative aimed at cultivating an actionable understanding of how AI is impacting regional economies, with a targeted focus on STAR (skilled through alternative routes) workers’ career pathways.
Labor Shortages and Birmingham
Birmingham is not immune to the impact of labor shortages that have truncated growth in peer metros. Alongside an aging population, the metro has a higher median-aged population than average. The region continues to address the overall problem with retaining younger talent who attend colleges and universities within our state, recruiting ample and competitive opportunities that are attractive to younger talent, and filling the gaps that exist with an aging population and workforce. According to the Wall Street Journal and ADP, Birmingham is ranked as a top U.S. city for college graduates to relocate based on numerous factors like wage growth, cost-of-living affordability, and availability of job opportunities. This is one of the ways that Birmingham is mitigating this gap, but we must continue to work with employers and stakeholders to market these opportunities and appropriately match jobs to the skills our workforce has.
Sectors like manufacturing and technology are examples of industries that have faced some of these issues over the last few years. Moving forward, it is critical to understand the localized impacts of labor market disruptors in addressing labor force questions. How are we retaining university graduates in the region and marketing the region as an attractive market for growth and development? How are we backfilling our manufacturing jobs, preparing for future needs, and marketing career paths within the manufacturing industry to draw in greater workforce participation?
Similar to the region’s approach with AI, Birmingham is actively adopting a similar strategy to address labor shortage issues: conversations with employers about what their active needs are and developing actionable and impactful strategies to increase labor workforce participation by including educational institutions, employers, municipalities, counties, and the state at the front end.
Why This Matters
BHM IQ’s industry and labor market research supports proactive regional economic development and workforce strategy. Join the conversation as the BHM IQ, joined by Lightcast, team digs deeper into these trends at the Central Alabama Economic Development Summit on October 15, 2026 at the BJCC.