Many issues are impacting the ability of Connecticut employers to fill jobs as the state’s economy recovers from 15 months of shutdowns and restrictions.
Connecticut has only recovered 60% of the 292,400 jobs lost in March and April last year as COVID-19 swept through the state and the country.
At 8.1%, the state’s unemployment rate remains the highest in New England and one of the highest in the country.
Yet, as ABCA President and CEO Chris DiPentima notes, employers are struggling to fill vacancies, turning to signing bonuses, increasing wages and other incentives.
“It seems counterintuitive given Connecticut’s high unemployment rate, but employers cannot find people to fill entry-level and skilled positions in a number of industries including recreation and hospitality, manufacturing. advanced, healthcare and financial services, ”he said.
“Some of the factors our members cite include child care issues, fears of contracting COVID-19, the federal unemployment benefit supplement and the suspension of the state’s job search obligation. for the unemployed.
The Lamont administration announced earlier this month $ 1,000 incentive for 10,000 long-term unemployed residents if they are hired and keep their new job for at least two months.
The state will reinstate the job search obligation for the unemployed from May 30, joining two dozen other states in lifting the suspension imposed by the pandemic.
The $ 300 federal benefit supplement, enacted in March as part of the American Rescue Plan Act, will likely remain in place in Connecticut until its expiration date on September 6.
At least two dozen states cancel federal supplement from June.
Nationally, job vacancies hit a record 8.1 million at the end of March as fewer people appeared willing to return to the workforce.
A U.S. census survey conducted in late March showed that 6.3 million people nationwide were not looking for work because they had to care for a child, while 4.4 million who were not looking for work. jobs have expressed concerns about contracting or spreading the virus.
And an April Connecticut report showed the impact of child care issues on the state’s economy, especially among women, who are more likely to withdraw from the workforce to care for children. children.
Childcare, COVID concerns
In a recent press conference, US Secretary of Labor Marty Walsh said the lack of childcare options is preventing many women from returning to the workforce.
“We need to make sure that if we’re going to have a strong recovery – a strong and fair recovery – we need to get women back into the workforce,” Walsh said.
That’s why the president’s proposed U.S. plan for families includes $ 225 billion for child care programs, he said.
Shannon Marimón, executive director of the ABC ReadyCT affiliate, told the ABC’s When Women Lead conference this week that no institution is more disrupted by the pandemic than child care and child care. ‘education.
“Even for those who were able to switch to working remotely, the trade-offs were considerable,” she said.
Federal Reserve Chairman Jerome Powell said it was “not clear” whether the weekly federal unemployment benefit of $ 300 was causing a labor shortage.
Like many companies, Altek Electronics of Torrington struggles to fill qualified and unskilled vacancies.
“Of the 15 positions we have opened in the past six weeks, we have filled six,” said CEO David Altschuler.
Altschuler said he understands unemployment benefits are necessary to help workers who lose their jobs through no fault of their own.
“Those with legitimate claims should continue to enjoy the benefits,” he said.
But he believes that the state should do more to empower beneficiaries.
“Those who defraud the system should be found and the benefits reduced or eliminated,” he said.
Earlier this month, the State Department of Labor and Chief State Attorney Richard Colangelo announced the reinstatement of a unemployment fraud prosecution unit in Colangelo’s office.
As of March 2020, Connecticut has processed more than 1.5 million unemployment claims and paid more than $ 8 billion in state and federal benefits.
DOL officials say they have identified and arrested at least 150,000 false claims during this period, alone receiving 20,000 fraudulent claims in just days in March.
Diane Nadeau, of the Windham Area Chamber of Commerce, said workers who typically earn less than $ 20 an hour enjoy enhanced benefits and choose not to return to work.
“The businesses with the most problems are restaurants, contractors for laborers, retail stores, NACs, cleaning and maintenance jobs – mostly service-oriented,” she said.
Supply chain issues are slowing hiring for some employers, Nadeau said, but not in the service sector.
“Supply chain issues are of more concern to contractors who are waiting for special orders – appliances, lumber, concrete, plywood, vinyl siding and some gutter and roofing materials – to be in stock,” she said. .
DiPentima said employers are also closely monitoring the current legislative session, with a continued push for more than $ 1 billion in tax hikes, sparking widespread concern.
“Tax hikes are the last thing our fragile recovery needs right now,” he said. “They’re also totally unnecessary given this year’s $ 470 million budget surplus, the historic rainy day fund balance and over $ 6 billion in federal aid.”
“This kind of debate sends a bewildering message to employers – these tax hikes are going to hurt many small businesses in the state – and it’s causing a lot of uncertainty among the Connecticut business community.
DiPentima said rebuilding the state’s economy requires a holistic approach, noting that lawmakers are considering a series of positive steps that will boost recovery and get people back to work.
“I am grateful that so many of the recommendations we raised as part of our political priorities for the reconstruction of Connecticut were given serious consideration during the legislative session,” he said.
“However, time is running out and I think we need a greater sense of urgency to push through these measures before the end of the session on June 9.”
DiPentima said he was concerned that the Senate had yet to act on critical legislation – developed through collaboration between workers, employers, the Lamont administration and a bipartisan group of lawmakers – reforming the state unemployment system.
“This bill was passed by the House two weeks ago 146-0,” he said. “The Senate can send a very powerful message to workers and job creators by acting now and sending it to the governor for his signature.”
DiPentima also said he couldn’t understand why some progressive lawmakers were resisting a bipartisan proposal to use $ 310 million in federal COVID-19 relief to help resolve the state’s unemployment debt crisis.
“It took six years of rising business taxes and special assessments to pay off the $ 1 billion in unemployed federal loans after the last recession,” he said.
“This was one of the main reasons Connecticut was one of the few states that never recovered all of the jobs lost in the 2008-2010 recession, why our economy never fully recovered.
“Employers plan to pay off an additional $ 1 billion in federal unemployment loans. Connecticut can’t afford to make the same mistake this time around: Our economy won’t fully recover if policymakers don’t act quickly and appropriately.
DiPentima cited a number of other measures still under consideration, including:
- Repeal of the sales tax on worker training and PPE and other safety equipment
- Expand the manufacturing tax credit to include small manufacturers
- Streamline professional licensing requirements, including making certifications easier for those moving to Connecticut
- Prioritize industries in demand for workforce development programs
- Restore the flow-through tax credit to its original 93% level: 2019 cut costs small businesses $ 53 million per year
- Restore the R&D tax credit to attract entrepreneurs, promote start-ups and encourage private sector investment
“We are all in the same boat,” said DiPentima. “And we cannot recover and rebuild without broad collaboration between the public and private sectors.
“Connecticut has enormous opportunities that we must capitalize on, that we cannot pass up.”