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October 22, 2021

CBIA: Job gains not enough, new policy solutions needed to aid recovery

PHOTO | CONTRIBUTED

The state’s current pace of job creation is not enough to remedy the labor shortage now confronting many employers, the Connecticut Business & Industry Association warned Thursday.

In a response to the release of Connecticut’s September jobs report — which showed the state added approximately 4,700 jobs that month — CBIA officials said Connecticut should be further along in its economic recovery considering its relative success in battling the COVID-19 pandemic.

“The September employment gains, while welcome, do not meet our expectations for the state’s overall recovery,” said CBIA President and CEO Chris DiPentima. “We are leading the nation in addressing the health crisis but are not keeping pace with the region or most of the country in our job recovery — [our] year-to-date growth rate is 2.5%, the slowest of the New England states and a point below the overall U.S. rate.”

DiPentima also pointed out that Connecticut’s unemployment rate is now 6.8%, well ahead of the U.S. jobless rate of 4.8%, and noted that while there are about 70,000 unfilled job openings in the state, there are 86,000 fewer people working than in February of last year, immediately before the pandemic struck.

“Employers are sounding the alarm loud and clear — the labor shortage is the number one problem facing the state’s pandemic recovery and our long-term economic outlook,” he said. “The challenge is this, how do we get people back into the workforce? The jobs are there and it’s clear that we need a more aggressive approach to resolve this issue.”

A recent CBIA survey of Connecticut-based executives found that about 80% of employers report difficulty finding and retaining employees, and 35% said a lack of skilled job applicants is the main factor hampering an expansion of their business.

Economists and policymakers have floated a number of theories as to why so many companies are having such a difficult time hiring, including the potentially disincentivizing effect of government relief payments, a lack of necessary skills and training for certain positions, a lack of affordable or available childcare options and the possibly permanent loss of many older workers who were at or near retirement age when the pandemic began and have since exited the workforce.

The market has responded to the crisis, with employers boosting wages and offering sign-on bonuses, but those incentives on their own have not resolved the shortage.

Addressing the problem will require renewed action at the state level, CBIA cautioned.

“CBIA and the business community are ready to work with the administration and the legislature to implement significant policy solutions for getting people back to work and realizing Connecticut’s tremendous potential,” DiPentima said.

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