WHERE ARE THE WORKERS?
Companies are hiring again as virus retreats, but ...
There are millions of job openings as the country emerges from the coronavirus pandemic, but even though unemployment levels remain high, qualified workers are scarce. Employers in industries as varied as restaurants, supermarkets and aerospace manufacturing are looking to hire workers to feed rapidly rising customer demand. Yet the unemployment rate in Connecticut in March was 8.3%, significantly higher than the U.S. rate of 6% and more than double the historically low 3.7% in February 2020 before COVID-19 descended.
“It seems counter-intuitive,” said Chris DiPentima, president of the Connecticut Business & Industry Association. “Unemployment is high but entry-level positions, skilled manufacturing, financial services, leisure and hospitality can’t find anyone.”
The reasons for not returning to work, according to several business executives and economists, include a fear of contracting COVID-19, a lack of child care and employees who have become comfortable working at home and are looking for different careers or learning new skills.
Nationally, the number of job openings at the end of March reached 8.1 million, the highest ever in tracking by the U.S. Bureau of Labor Statistics. The largest increases were in accommodation and food services, state and local government education and arts, entertainment and recreation.
Are jobless benefits a culprit?
One reason often cited by employers — and prompting strong arguments among economists and elected officials — is expanded federal unemployment benefits. Critics say it gives workers little reason to get a job. Jeff Hamilton, president and general manager of Mohegan Sun, said if the gap is narrow between a salaried job and the extra $300 a week unemployment insurance extended to September, “people are not electing to work.”
Several economists disagree. Leisure and hospitality, with lower wages and unemployment insurance that would more likely be a disincentive to returning to work, have added the most jobs, according to the UCLA Anderson School of Management.
In addition, the school said states with greater unemployment insurance benefits added more jobs than states with less generous compensation.
“A more likely culprit might be ongoing childcare constraints and school-from-home (notably, men gained jobs in April, women did not), ongoing fears of COVID exposure at work, and supply chain bottlenecks,” the Anderson School of Management said.
Flaherty said the average unemployment benefit in Connecticut is $300 a week and boosting the benefit to $600 with an additional federal payment is generally insufficient.
“I have a hard time believing $600 a week is preventing people from taking a job and protecting their future,” he said.
A few Republican governors will stop providing the $300 added benefit. Gov.
Ned Lamont will leave the flow of federal money as is.
“The $300 true up ends in September so there’s a time fuse on it,” he recently told reporters.
Unemployment down, but still high
Thousands of people in Connecticut are out of work. Connecticut’s unemployment rate is 8.3% and in some regions it is even higher, with Waterbury at 10.1% and New London-Norwich at 9.4%.
The anomaly of broadbased joblessness as employers struggle to find workers is playing out nationally. And it’s affecting many industries, with “help wanted” signs popping up at hotels and restaurants, supermarkets and manufacturers.
“We have this very unprecedented situation of having such a high unemployment rate and high number of vacancies at the same time,” said Patrick Flaherty, acting research director at the Department of Labor.
Trouble filling casino jobs
After a devastating blow to its economy last year by COVID-19, southeast Connecticut’s labor force is on the rebound as vaccines take hold, allowing the region’s two tribal casinos to reopen and hire back workers.
The labor force has some distance to go.
A recent two-day job fair at Mohegan Sun contributed just slightly to efforts by the casino and entertainment venue to hire in time for a much anticipated statewide business reopening on May 19. Hamilton said 172 applicants showed up, more than he expected.
Still, it represents only 25% of the jobs that need to be filled.
“We’re not even close to where we need to be,” he said.
Manufacturing slowly rebounds
Doug Folsom, chief executive officer of Whitcraft Group, an aerospace manufacturer, said it’s been a challenge to find job candidates.
“We went back to folks we let go. Skilled employees went to other employers. Machinists, welders, they’re not easy people to find,” he said.
Many other workers likely retired and the whereabouts of other employees are a “bit of a mystery to us,” Folsom said.
Manufacturers in Connecticut shed 12,700 jobs between March and April 2020 and regained 4,600 by March 2021, off 5% from its peak before the pandemic began its spread in Connecticut in February 2020.
In contrast, leisure and hospitality lost nearly 91,000 jobs in early 2020 and has regained more than 55,000, leaving it still down nearly 23% from its pre-pandemic high.
Whitcraft laid off 500 employees last year as aerospace manufacturers pared back when airline customers grounded fleets due to travel restrictions forced by COVID-19. Whitcraft, which operates in Arizona, Connecticut, Maine and Massachusetts, is again growing, but slowly: it has hired about 80 workers, with 50 in Connecticut, and intends to hire 100 workers overall.
Scott Livingston, president of Horst Engineering, an aerospace manufacturer in East Hartford, is beginning to hire a few workers as aviation slowly improves. “Now is the time to test the market,” he said.
Hiring was disrupted by an interruption in training and education programs at trade schools, he said.
“They were getting a whole new generation of workers excited about manufacturing,” Livingston said. “When we were buried with work we were willing to hire people with entry level work to train them. Now it’s a different story. We’re so slow we can’t afford to carry interns and people fresh out of schools. Now we need people with skills.”
Signing bonuses at the casino and Max Restaurants
At restaurants and supermarkets, compensation makes a difference in keeping workers or scrambling to find them, said Burt P. Flickinger III, an industry analyst. Union workers tend to be more loyal and productive and better compensated, he said.
“Restaurants like McDonald’s and Burger King are in a real crisis reopening,” said Flickinger, managing director of Strategic Resource Group. “They’re not getting enough workers at customary wages and benefits.”
The Mohegan Sun, desperately seeking culinary workers, offered $2,000 sign-on bonuses. And Max Restaurant Group, which operates nine restaurants in and around Hartford, promised $1,000 signing bonuses
Overall, jobs slowly returning
Connecticut lost about 290,000 jobs in April 2020, a month after the shutting of nearly all businesses open to customers such as malls, movie theaters, barber shops and beauty salons. By March, the most recent month for which data are available, the state won back 176,400 jobs, or 60.3% of jobs that disappeared.
Flaherty counsels patience.
“There are many opportunities in Connecticut,” he said. “It just takes time. The process is already underway.”