Businesses are struggling to hire workers across the country as a result of the COVID-19 pandemic, constraining an economy that’s still recovering from the health crisis.
But the worst U.S. labor shortage since at least the 1990s is far more dire in some states than others.
Employers in Massachusetts, West Virginia and Maryland are having the toughest time finding workers while those in Nevada, Wyoming and Hawaii are facing the fewest obstacles, according to a Moody’s Analytics study of Labor Department figures released for the first time last month. Friday’s jobs report will showcase the latest employment data nationally.
The entire country, of course, is experiencing COVID-19-related hurdles that are discouraging millions of Americans from looking for work or accepting job offers. Many are still caring for kids who are distance-learning from home, fearful of catching the virus in the workplace, shifting to new careers after burning out during the pandemic, or living off generous stimulus checks or jobless benefits that ended earlier this year.
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Some states, however, are coping with other issues. Broadly, labor markets are tightest – meaning it’s hardest to find workers – in the Northeast and Midwest where working-age population growth has slowed or declined, a trend intensified by the COVID-19 pandemic, says Moody’s economist Adam Kamins.
“They are experiencing strong aggregate demand but population growth isn’t keeping up,” Kamins says.
He notes that demand in second-tier markets like Philadelphia and Boston is coming back a bit faster than global corporate hubs like New York, Chicago and Los Angeles, where a larger share of residents continue to work from home, hobbling downtown office districts.
In Bartonsville, Pennsylvania, The Lounge, a restaurant with about 40 employees, has six job openings and it’s taking two to four months to fill each vacancy, compared to three days to a week normally, says general manager Steve Ertle. That’s creating a vicious cycle in which existing staffers are burdened with more work and so they too are quitting. Pennsylvania is the nation’s sixth tightest labor market, according to Moody’s rankings.
“The issue we’re dealing with is great stress, and additional dropouts from experienced people that are just pretty much tired of the industry because they’re having to do three times the amount of work than what was given to them just a year ago,” Ertle says.
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Worker shortages are least severe in Southern and Western states that are attracting lots of new working-age residents, Kamins says. Some of those states also have fewer job openings because they’re tourist centers that have yet to see consumer demand fully recover – a reality that eases worker shortages but isn’t a good thing for the state’s economy overall.
Some states with the tightest labor markets are also Democratic strongholds, where residents are more cautious about returning to work amid COVID-19 spikes, Kamins says. Some of the least tight markets lean Republican, supplying a more available labor pool.
Last month, Labor shed light on the spectrum of worker shortages across the nation by reporting the number of job openings and hires in each state for September. Previously, Labor published that data nationally and for each region in its monthly job openings and Labor Turnover Survey but not at the state level.
Kamins ranked each state by calculating the gap between the share of job openings and hires (as a percent of employment) in the state. The bigger the gap between openings and hires rates, the tighter the job market in that state, theoretically giving employers more headaches as they hunt for workers and job candidates more leverage to seek higher pay and benefits.
Nationally, the gap was 2.2 percentage points in September, based on a job openings rate of 6.6% and a hires rate of 4.4%. That’s just below July’s 2.4 percentage point gap, which was the largest on records dating back two decades. In normal times, the openings and hire rates are roughly equal.
Traditionally, economists have relied on the unemployment rate to judge the tightness of a state’s job market. The lower the rate, the fewer available workers. But that may not always be the case, especially in a pandemic that’s making many job candidates more selective about the offers they accept.
As a result, the gap between job openings and hires can offer a more precise measuring stick, though it’s far from an exact science.
Here’s a look, in order, at the five states with the most severe worker shortages in September and the five with the least severe deficits, based on their openings-to-hires gaps:
5 states with worst worker shortages
Job openings rate: 8.1%
Hires rate: 4.1%
Gap: 4 percentage points
The state has recovered substantially from the pandemic and most students have returned to its many colleges. That’s fueling more demand for goods and services and creating more job openings but most of those students aren’t part of the workforce, Kamins notes. That labor pool is still diminished as residents care for kids or stay cautious about going back to work because of COVID-19.
In Auburn, Atlas Distribution, a wholesaler of beer and beverages with 100 to 200 employees, has about a dozen openings – for warehouse workers, merchandising specialists, delivery drivers and helpers, says company Comptroller Jackie Faron. If Atlas schedules five interviews, perhaps half will show up, Faron says.
In Weymouth, George Washington Toma TV and Appliance has a similar number of openings but just 50 employees, so it’s having a harder time keeping pace with demand. The store, in turn, closes earlier during the week and no longer opens at all on Sunday, says CEO George Toma.
“We didn’t really have a slow season,” Toma says, adding that November was off the charts. “It’s not even Black Friday anymore, it’s Black November.”
Job openings rate: 8%
Hires rate: 4.6%
Gap: 3.4 percentage points
West Virginia is graced by a stunning natural landscape and vibrant tourism industry that fuels customer demand and job openings. But it was hit with the nation’s largest population decline from 2010 to 2020, losing 3.2% of its residents amid the coal industry’s decline and opioid overdose epidemic. That means there are fewer potential workers, Kamins says.
Compounding the labor shortage is the state’s status as a retirement haven, with about a fifth of the population over 65, putting more pressure on health and other services. Yet most of those older residents aren’t part of the workforce, Kamins says.
Job openings rate: 7.3%
Hires rate: 3.9%
Gap: 3.4 percentage points
Southern Maryland is a bedroom community for Washington, D.C., and northern Virginia, and many of those district and Virginia employees have been working from home in Maryland, Kamins says. That stokes demand for services during the day without supplying a similar boost to a workforce still suffering from COVID-19-related impediments.
Jamison Door Co. in Hagerstown, could use about 15 workers, says company Chairman John Williams. “Our business is really, really good,” he said of the firm, which makes doors for the cold storage industry. Its products are in demand, he says, because the pandemic has changed the way people ship, order, and buy food.
But he adds, “It’s difficult just to attract people to talk.”
The company has raised pay, and the lowest-wage job now earns more than $20 per hour, To help allay fears of the virus, Jamison even has brought in mobile units to provide vaccinations or booster shots to workers who want them.
“We’ve tried every way we know how” to recruit workers, Williams said. “Some people will actually accept a job, work for a week and be gone…The work ethic of old seems to be not as strong.”
Job openings rate: 7.6%
Hires rate: 4.3%
Gap: 3.3 percentage points
The state, which lost residents from 2000 to 2010 as the auto industry was pummeled by foreign competition, had among the slowest growing populations over the past 10 years. The industry’s chip shortage also has dampened job openings during the pandemic, but not enough to offset the slow-growing labor force, Kamins says.
Job openings rate: 6.2%
Hires rate: 3.1%
Gap: 3.1 percentage points
Demand has held up better than nearby Chicago while the state has endured among the sharpest slowdowns in population growth last year, Kamins says.
5 states with least severe worker shortages
Job openings rate: 7%
Hires rate: 6.2%
Tourism in the gambling and entertainment mecca has rebounded but it’s still short of pre-crisis level and COVID-19’s delta variant dealt it a setback over the summer. Meanwhile, population growth has been strong as California residents and others converge on the area for its scenic beauty and lower cost of living, providing an ample workforce, Kamins says.
It’s not that workers are plentiful in the state, but shortages seem to be less severe than in other areas. Shauna Dong, the manager of Le Thai in downtown Las Vegas, said the restaurant has been able to hire enough staff to be in a “comfortable” position.
“We’re not actively looking, but we’re definitely accepting applicants,” Dong. But that’s nothing new — “in a restaurant, you will always, always have a position open.”
Dong said turnover hiring is still “a lot harder” these days, and the restaurant has reduced its staff levels from about 55 to 45 employees since the start of the pandemic. But the eatery has been able to adjust by training the staff they have on hand to work more efficiently, Dong said.
Job openings rate: 6%
Hires rate: 5.1%
Gap: 0.9 percentage points
Coal mining, one of the state’s leading industries, has suffered in recent years while national gas drilling has been volatile during the pandemic, damping demand for workers and job openings, Kamins says. Meanwhile, the state’s tiny population has grown, supplying nearly enough workers.
Job openings rate: 4.8%
Hires rate: 3.8%
Gap: 1 percentage point
Like Nevada, Hawaii’s tourism industry is recovering but was hammered by the delta variant. Despite the idyllic beauty and laid-back lifestyle, the population and workforce also have been crimped by the high cost of living. Still, the limited workforce comes close to meeting the reduced demand.
Job openings rate: 5.9%
Hires rate: 4.8%
Gap: 1.1 percentage point
Texas is typically one of the most economically robust states, but employment has been curtailed by the volatile oil industry during the pandemic, Kamins says. Population growth, meanwhile, remains among the strongest in the country as residents of states such as California seek a lower cost of living.
Job openings rate: 6.2%
Hires rate: 5%
Gap: 1.2 percentage point
Idaho’s population grew 17.3% in the past decade, the second-fastest in the nation, as people move to trendy cities like Boise for its low costs, natural surroundings and trendy downtown.
The trend was amplified by the pandemic as Americans headed to less populated areas to work remotely. Although the state is a fast-growing tech hub, creating job openings, there are nearly enough workers to fill the slots.
Contributing: Bailey Schulz; Brian W. Myszkowski of the Pocono (Pennsylvania) Record; Isabel Sami of the Worcester (Massachusetts) Telegram & Gazette; Alex Weliever of the Patriot-Ledger (of Quincy, Massachusetts); and Mike Lewis of the Hagerstown (Maryland) Herald-Mail.
This article originally appeared on USA TODAY: Worker shortage 2021: States with most and least severe labor deficits
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