Worker Shortage Hampers 2022 Job Growth

Connecticut added 32,100 jobs in 2022, at 2% just the 38th best growth in the country, despite near record-high job openings. 

Job growth stumbled at year’s end, with December bringing a loss of 1,600 positions as the worker shortage remained top of mind for employers.

That marked just the second month of losses for 2022, after a decline of 1,100 jobs in October.

The Connecticut Department of Labor’s monthly employment report also cut November’s initially reported 6,200 new jobs by more than half to a gain of 2,900.

Massachusetts posted 3.7% job growth last year to lead the region, followed by Maine (2.8%), New Hampshire (2.5%), Connecticut, Rhode Island (1.9%), and Vermont (1.5%), while the U.S. saw 3% growth.

‘Not Meeting Demands’

“The pace of Connecticut’s job growth is simply not meeting the demands of our economy,” said CBIA president and CEO Chris DiPentima.

“Our 2022 job growth rate was one of the region’s slowest and trails the national rate by a full percentage point.”

As of November, Connecticut has 102,000 job openings, 46% more than in February 2020.

While the state’s labor force—the number of employed workers plus those actively looking for work—grew by 43,400 people (2.3%) last year, it remains 53,700 (3%) below pre-pandemic levels.

“Our labor force decline represents more than one-third of the New England region’s losses,” DiPentima said.

“Even if every unemployed person was hired tomorrow, we’d still have over 21,000 unfilled positions.”

COVID Recovery

Connecticut has recovered 89% of the historic 292,400 jobs lost in March and April of 2020 due to pandemic shutdowns and restrictions.

Maine has the highest recovery rate at 105%, followed by New Hampshire (100%), Massachusetts (96%), Rhode Island (90%), Connecticut, and Vermont (79%).

The U.S. is in growth mode, with a 106% recovery rate.

“The pace of Connecticut’s job growth is simply not meeting the demands of our economy.”

CBIA’s Chris DiPentima

The unemployment rate remained at 4.2%—down nine-tenths of a point for the year—tied for ninth highest in the country and above the national rate of 3.5%.

DiPentima said Connecticut has one of the highest labor participation rates in the country and one of the lowest quit rates, “highlighting that employers are providing meaningful career opportunities.”

“Our workforce development efforts must go beyond skills training and encouraging people to rejoin the labor force—it’s critical that we also focus on attracting more people to Connecticut,” he added.

Policy Solutions

DiPentima cited a number of factors—many that predate the pandemic—driving the labor shortage, including slow population growth and the state’s high cost of living.

He highlighted CBIA’s 2023 Transform Connecticut policy solutions—supported by almost half of the legislature—as a forward-looking vision for the state that will attract a new generation of workers.

Businesses are battling for talent—we have 102,000 job openings yet nine in 10 employers say it's difficult to find workers. It's time to lower living costs, expand #housing, and implement other solutions to attract more people to Connecticut. #transformCT https://t.co/fH5eDCBB19

— Chris DiPentima (@ChrisDipentima) January 25, 2023

“These solutions include tax relief, providing more housing options, student loan assistance, occupational licensing reform, and immigration reform,” he said.

“We are encouraged that Gov. Ned Lamont and legislative leaders agree that transforming the economy is a top priority.

“It’s critical that we work together to embrace policy solutions that will address the labor shortage and make Connecticut a more affordable place to live and work.”

Sector, Labor Market Growth

Employment grew in eight of the state’s 10 main industry sectors in 2022, led by leisure and hospitality, which added 9,100 jobs (6.4%).

Education and health services gained 8,100 jobs (2.4%), followed by trade, transportation, and utilities (5,900; 2%), manufacturing (4,800; 3.1%), professional and business services (1,800; 0.8%), government (1,400; 0.6%), information (600; 2%), and construction (500; 0.8%).

Financial activities lost a further 400 positions in 2022, and is down 6,300 positions (-5.4%) since February 2020.

Employment in other services also declined 400 positions (-0.7%).

All six of Connecticut’s major labor markets posted gains for the year, led by Hartford with 11,100 new jobs (2%).

Bridgeport-Stamford-Norwalk added 9,400 jobs (2.4%), followed by New Haven (8,100; 2.8%), Norwich-New London-Westerly (2,500; 2.1%), Danbury (2,100; 2.8%), and Waterbury (700; 1.1%).