(Bloomberg) — The network of hospitals, prestigious universities and prep schools that have fueled New England’s regional economic growth for decades is pulling off reforms in its labor market and fueling historically high unemployment.
After decades of maintaining unemployment rates across the country, New England is now well above the US average. Its rate was 5% in November, the most recent month for which historical comparisons can be made, compared to 4.2% for the national figure.
According to the Bureau of Labor Statistics, nearly a third of the decline in payrolls in Massachusetts – the region’s economic engine – and Rhode Island is due to a slowdown in the health and education service industries. For the US as a whole, this ratio is just 20%.
Employees who play people in places, including hospitals and schools, are often too young to retire, and are now looking for positions with less exposure to COVID-19. This is causing a churn in the labor force which is forcing employers to boost wages, training and other benefits.
“Those roles felt very dangerous and uncertain during the pandemic,” said Mandy Townsend, vice president of employer engagement at Jewish Professional Services Boston, of positions such as patient care and pharmacy technician jobs. Problem: “Remote work is really such a small margin of available work.”
Townsend sees a much more demanding approach to job seekers than was the case before Covid-19, with workers less willing to accept positions they deemed risky .
“We have people start jobs, and then their jobs end in the first week or so,” said Townsend, whose nonprofit agency works with about 500 employers and 12,000 to 16,000 job seekers. “It’s disturbing.”
JVS-Boston, which Match works for, and coaches, job seekers and employers have responded by calling it the “Ghostbuster Project” to find out exactly why there’s so much business. He said this involves paying people to be clear about their reasons.
“We are hearing from people that if the work environment on day one isn’t supportive and they don’t really feel a connection to what they were expecting during their training and their job-searching process, And they just leave,” she said.
Rose Sheehan has seen a surge in first-time job layoffs as chief human resources officer at Mass General Brigham, the largest private employer in Massachusetts. Her Boston-based nonprofit Health System has seen the workforce vacancy rate jump from 7% a year ago to 9.5%, and now has some 8,000 job openings – fewer than 6,500 on the eve of the pandemic.
The biggest age group that’s going: millennials, Sheehan says. “They’re clearly not retiring — but choosing to do other things.” About 50% of those who leave work say it’s for another job, Sheehan says.
Over time, some people in the job market will be pushed into roles, even if they are not a perfect fit, as pandemic aid from the government dwindles.
Dan Tucker, 56, of Marblehead, Massachusetts, lost his previous role running North American operations for a British manufacturer of racing sailboats on the eve of the pandemic. In his pursuit of the ideal role – a position running a small business – he has used pandemic-relief aid provided by the government.
But, with the exception of health insurance, the aid has ended, he said.
“I’m seeing the bank balance shrink every month to pay my rent and buy groceries,” Tucker said. “I’m questioning whether I need to stop for what I want to do, or do something that’s not really what I want to do,” he said. “I need to rebuild my savings, and I need to build my retirement.”
Such determination to maintain it is one reason the regional unemployment rate is high. More people are unemployed because more people are looking for work: There has been less migration in the Massachusetts and Rhode Island workforce than is the case nationally.
“It’s certainly a silver lining,” said Jeffrey Thompson, economist and director of the New England Public Policy Center at the Federal Reserve Bank of Boston earlier this month. “It’s an important statement, that ‘I have left the labor force.'” But in Massachusetts and Rhode Island, “they are not giving up, they are not ready to retire.”
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