Labor Shortage Impacting Connecticut’s Economic Recovery

by Kimberly James


A labor shortage across Connecticut has caused issues as employers are having difficulty finding qualified job applicants, hampering efforts to emerge from the COVID-19 pandemic, one industry expert said.

Chris DePentima, president and CEO of the Connecticut Business and Industry Association, said in a statement the state has 41% more job openings than before the pandemic, but over that same period of time more than 45,000 people have left the workforce.

Dr. Steven Lanza, associate professor in residence at the University of Connecticut Department of Economics, told The Center Square the labor shortage is making it difficult for businesses to conduct daily operations. Effects of the shortage are felt most by customers through reduced business hours, longer wait times for service, slower deliveries, emptier store shelves, and higher prices.

“According to NFIB’s latest survey, out just yesterday, small business owners feel that quality of labor is their number one problem,” Andrew Markowski, Connecticut state director of National Federation of Independent Business, told The Center Square last week. “They have job openings and would like to fill them, but they just can’t find the right people to hire and that will remain on the job.

“Some consequences of this are business owners and existing employees putting in more hours, delays in fulfilling orders or serving customers and an overall strain on operations, particularly for the smallest of small businesses.”

Lanza said businesses in the health care, education and food service industries have found it particularly difficult to remain fully staffed. Jobs in these industries involve high stress, long hours, and low pay. Regardless of industry, small and medium-sized businesses find it harder to hire and retain workers since they have fewer resources than larger firms use to attract job seekers.

“As for the types of small businesses that are struggling the most, transportation tops the list with 68% in that field reporting they had job openings, followed by manufacturing at 61% and construction at 54%,” Markowski said. “With the holiday season around the corner, businesses that rely on seasonal employees are already trying to ramp up hiring and that will have an impact throughout the labor markets as businesses compete for employees.”

Lanza said at the height of the pandemic, labor was scarce because workers everywhere were forced to stay home, but a confluence of factors has contributed to a continued shortage.

“Many ‘baby boomers’ have opted to retire early, and the pool of younger generation replacement workers is insufficient … to take their place,” Lanza said. “Others have left the workforce en masse in the so-called Great Resignation due to the burnout associated with working in high-stress, low-wage jobs in health care, education, and food service. What’s more, these staffing challenges in caregiving industries have forced other would-be workers to stay home to care for elderly parents or young children.”

Lanza said higher wages would help resolve the current worker shortage but pay is only one piece of the puzzle. When labor is both scarce and costly, firms often turn to automation and self-service options to reduce their reliance on workers.

“Businesses can enhance employment opportunities by offering better health and retirement benefits, more flexible schedules including opportunities to work from home, and improved at-work amenities such as free food or casual dress codes,” Lanza said.

“Being able to operate their businesses and invest back in their companies to create jobs is what keeps Connecticut’s economy running,” Markowski said. “We need small businesses to have the ability to hire workers, continue to offer competitive wages and benefits, and invest back into their communities, or else Connecticut’s economy will continue to flounder.”

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Kimberly James is a contributor to The Center Square. 




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