There was reason for optimism when it was announced that the unemployment rate in Massachusetts dropped below 3 percent for the first time since 2001. In metropolitan Worcester, the unemployment rate dropped to 2.8 percent in November, down 1.9 percent in a year.
In addition, last week the Associated Industries of Massachusetts announced that business confidence rose to its highest level since December 2004. Employer enthusiasm, AIM reported, “is also based upon a solid economic expansion during 2016 that most analysts believe will continue in a methodical manner through the first half of 2017.”
Despite the positive data there is reason for concern.
An article last week from the editorial board of MassBenchmarks, a collaboration of the UMass Donahue Institute and Federal Reserve Bank of Boston, noted, “The Massachusetts economy is fast approaching full capacity. … Based on anecdotal reports from selected employers, wages appear to be rising rapidly for skilled manufacturing and construction workers, indicating a scarcity of qualified workers.”
The article followed a November survey from the Mass. Business Alliance for Education that found “75 [percent] of respondents are having trouble finding qualified candidates to fill open positions.
“Business leaders also report serious deficiencies in new hires, ranging from higher-order skills like teamwork, critical thinking and communications to basic reading and math.”
Alan Clayton-Matthews, associate professor of economics and public policy at Northeastern University, wrote in September, “The headwinds holding back state growth have not changed in recent months. A major headwind is the tightening labor market. With fewer unemployed workers and with more baby boomers retiring, it is becoming more difficult for employers to find the workers they need. … Tight labor markets may become a constraint on the Commonwealth’s capacity to grow.”
In short, the state and local economies are at risk of slowing down unless there are more trained workers, the key word being, trained.
While the November unemployment rate in Massachusetts was 2.9, the labor force participation rate, the rate of those 16 and older who can work, was just 64.7 percent.
Measured since 1976, labor force participation hit its high water mark in December 1989, when 69.1 percent were employed.
If the Mass. economy today had the same percentage of the population at work as in December 1989, 348,400 more people would be employed.
With a tightening labor market and hundreds of thousands of people outside the labor market, it is critical to prepare those outside the workforce for the jobs that are available now and will be in the future.
A recent communication from City Manager Edward M. Augustus Jr. to the City Council highlighted one of the ways this connection can be made.
The Worcester Jobs Fund, according to the year-end review prepared for the City Council, “was created to better connect Worcester residents with good jobs made available through development projects and job expansion activities. The effort prepares residents for employment in viable long-term career paths where there is an immediate workforce need through activities such as job training, job recruitment, and related services.”
The fund is administered by the Central Massachusetts Workforce Investment Board and “is guided by a committee comprising representatives from the Worcester Community Labor Coalition, the Worcester Regional Chamber of Commerce, the Executive Office of Economic Development, Workforce Central Career Center and the Worcester Public Schools.”
The Worcester Jobs Fund developed state-certified pre-apprenticeship programs in four areas, building trades, community health workers, diesel technicians and commercial driving. The programs enrolled 36 low-income individuals, including 11 women and 27 people of color.
According the report, 28 of the 36 completed training, with 21 securing employment in their industry with an average yearly pay of more than $32,000.
We applaud the results of the Worcester Jobs Fund. At the same time, the scope of the problem requires that more be done to educate and train workers.
It is one thing to not have enough jobs for everyone who wants one. It is another things entirely to see jobs go unfilled while there are people who could be trained to fill them.