Mass. firms decry lack of workers
Labor shortage blamed on recession departures
(Correction: Because of a graphic artist's error, a Page One chart on Sunday showing unemployment rates and migration into and out of Massachusetts incorrectly indicated population was declining. The state's population has grown an average of 0.5 percent per year since 1981.)
The state's labor market has only begun to recover from the recent recession, but already employers from the Berkshires to the Boston suburbs say it's getting hard, and in some industries almost impossible, to find workers.
These emerging shortages are not the product of an accelerating economy. Workers, particularly the educated and skilled, either left the state in droves or retired during the brutal recession. From 2002 to 2003 alone, according to Northeastern University's Center for Labor Market Studies, a net 61,000 people of working age, half holding at least a bachelor's degree, left the state.
As a result, even the modest improvement in the state's economy is creating shortages in certain industries and in parts of the state as the demand for workers begins to increase. In Berkshire County, for example, a recent survey by the Chamber of Commerce estimated that local employers had 3,500 job openings, as the state Division of Unemployment Assistance reported fewer than 3,000 unemployed there.
Len Light, president of Lenco Industries Inc., a Pittsfield maker of armored vehicles, said he has spent more than a month trying to fill two openings for welders. And in that period, a third job opened. And that's the least of his worries. In September, he expands into a new plant in Pittsfield; he'll need another 40 workers, including welders, electricians, mechanics, and engineers.
''I don't know where I'm going to find them," said Light, who added that he plans to try advertising the job openings in Albany, N.Y., about 40 miles away.
Other employers tell of similar concerns. In Westfield, Larry Maier, the owner of Peerless Precision Inc., a machine shop, said he can't fill three machinist jobs, despite running periodic newspaper ads and enlisting an employment agency.
In Cambridge, Tracy Gallagher, managing director of the accounting firm Tofias, P.C., said the competition for accountants is so fierce that job candidates typically entertain three to five offers ''without really breaking a sweat."
Even the software industry, which shed thousands of jobs in the technology bust, is beginning to scramble for people.
Sally Jablon Silver, chief executive of Sally Silver Cos., a Waltham staffing firm that serves the technology industry, said 90 percent of candidates she recruits today already have jobs, compared with 60 percent a year ago. George Hotter, vice president of human resources at OpenPages Inc., also of Waltham, said the market for technical talent has tightened so much that his company, which plans to hire 75 more by year's end, recently increased its in-house recruiting staff to six from one.
''You'd expect there'd be lots of people out there," Hotter said, ''but we're not finding that."
Certainly, the state still has a large pool of unemployed, with 68,000 more jobless than at the prerecession peak in early 2001, according to the state statistics. But in many cases, workforce specialists say, skills and education don't match available jobs.
For example, while the average unemployment rate for workers with bachelor's degrees or higher slipped to about 3 percent in 2004, the jobless rate for lower-skilled production workers hovered above 7 percent, according to Northeastern's Center for Labor Market Studies.
The unemployment rate for skilled blue-collar workers was 3.5 percent, compared with an overall state jobless rate of 5.1 percent last year.
The reported shortages are concentrated in skilled occupations. While such shortages mean better opportunities and wages for these workers, they hurt long-term growth by raising business costs, and by discouraging companies from expanding because they can't find help.
Boston Centerless Inc., a Woburn precision machining and grinding firm, provides an example. Michael Tamasi, the president, said his company, which makes components for medical devices, automotive, military, and other industries, recently had to turn down lucrative orders of 100,000 pieces or more because it couldn't find enough qualified workers.
''There's just not the people out there with the skills we're seeking," he said.
Massachusetts, which suffered the nation's deepest recession in terms of job loss, was the only state to lose population in 2003 and 2004, and one of only four states to experience labor force declines in recent years. Since it peaked in August 2002, the state's labor force has shrunk by 60,000 workers, or 2 percent, compared with a 3 percent increase in the national labor force during that period.
Jerry Gedaly, an electrical engineer who worked in the Massachusetts technology industry for more than a decade, was among the skilled workers who left the state. Laid off in the fall of 2002 from Teradyne Inc., Gedaly, a 53-year-old father of two, hung on in Massachusetts for two years trying to find another tech job. Finally, he took an offer from a Greensboro, N.C., chip maker.
''I really did not want to leave," said Gedaly, who still listens to the Boston sports radio station WEEI over the Internet. ''But I had to take this opportunity."
In the long run, economists say, holding on to skilled workers like Gedaly, and maintaining a healthy labor force, could prove to be among the greatest economic challenges for the state. Among the impediments: the state's high living costs, particularly housing, which economists say make it harder for workers to stay.
''If all of a sudden Boston became the center of a new industry, like the mini-computer industry of 25 years ago, where would the workers come from and where would they live?" said Ross Gittell, a University of New Hampshire professor and a forecaster for the New England Economic Partnership, a nonprofit group. ''It's having the available skilled labor during economic expansions that allow you to sustain long-term growth."
Robert Gavin can be reached at rgavin@globe.com. 