Labor Force Crisis: ‘Employers Losing Patience’

Connecticut’s labor force declined for a seventh consecutive month in July as employers face growing challenges filling the state’s 91,000 job openings.

While July brought 2,900 new jobs—rebounding from a loss of 2,500 the previous month—job growth in the state remains among the slowest in the country.

Job openings are now 30% above pre-pandemic levels while the labor force—those working and those looking for work—is down 41,100 people or 2.1%.

CBIA’s Chris DiPentima said the pace of job growth “is not meeting the demands of Connecticut’s economy.”

“We have 91,000 job openings,” he said. “Even if every unemployed person was hired tomorrow, we’d still have 22,000 unfilled positions.

“Employers are losing patience and the longer this crisis continues, the greater the risk that companies will look elsewhere to meet their workforce needs.”

Year-Over-Year Growth

Connecticut has added 21,400 jobs over the last 12 months, a 1.3% growth rate that is 42nd best in the country. The U.S. growth rate for the same period is 2.3%.

Massachusetts’ year-over-year job growth rate is 2.4%, the best of the New England states and tied for eighth fastest in the country.

New Hampshire’s 12-month growth rate is 1.5%, followed by Connecticut, Vermont (0.7%), Maine (0.5%), and Rhode Island (-1.1%).

“The demand is there, we have targeted workforce development programs in place, but we simply don’t have the people in Connecticut to fill those jobs,” DiPentima said.

Connecticut has recovered 98% of the historic 289,100 jobs lost in March and April of 2020 to pandemic shutdowns and restrictions.

New Hampshire has the region’s best recovery rate at 107%, followed by Maine (104%), Massachusetts (103%), Connecticut, Vermont (89%), and Rhode Island (87%). The U.S. average is 118%.

‘Time Is Running Out’

Connecticut’s labor force losses since February 2020 are among the largest in the region. The U.S. labor pool expanded 1.5% over the same period.

The state’s 3.6% unemployment rate is the region’s highest, although the 64.1% labor participation rate is 20th best in the country.

DiPentima said Connecticut’s competitive advantages “are being eroded by the labor shortage crisis.”

CBIA’s Chris DiPentima said Connecticut’s competitive advantages “are being eroded by the labor shortage crisis.”

“Businesses are playing their part—salaries jumped 4.4% last year with Connecticut wages the fifth highest in the country,” he said.

“Our voluntary quits and separation rates are eighth lowest among all states, further illustrating the stability of our workplaces.  

“Policymakers must show a sense of urgency and address issues like the cost of living, housing, and the high cost of doing business here.

“Time is running out.”

Industry Sectors, Labor Markets

Five of Connecticut’s 10 major industry sectors added jobs in July, led by education and health services, where employment increased by 3,000 (0.9%).

Construction and mining gained 1,400 positions (2.3%), followed by financial activities (600; 0.5%), other services (100; 0.2%), and leisure and hospitality (100; 0.1%).

The government sector, which includes employment at the state’s two casinos, was unchanged last month.

Professional and business services posted the biggest loss, shedding 1,400 jobs in July, a 0.6% decline.

Manufacturing lost 700 jobs (-0.4%), followed by information (-100; -0.3%), and trade, transportation, and utilities (-100; -0.03%).

Four of the state’s six major labor market areas saw job gains in July, led by Hartford with 1,300 new jobs (0.2%).

Employment in New Haven increased by 1,200 jobs (0.4%), followed by Waterbury (500; 0.7%) and Norwich-New London-Westerly (300; 0.2%).

Bridgeport-Stamford-Norwalk was unchanged, while the Danbury labor market lost 200 jobs (-0.3%).