Tight labor market hinders search for skilled workers

BOSTON (AP) — Few would suggest that Massachusetts’ unemployment rate dropping below 3 percent, as it did in November for the first time in more than 15 years, is a bad thing.

But some economists are waving caution flags about an increasingly tight labor market in which key industries are finding it more difficult to secure the highly skilled employees they need to continue flourishing.

“The Massachusetts economy is fast approaching full capacity,” writes the editorial board of MassBenchmarks, a journal of the state’s economy published by the University of Massachusetts Donahue Institute.

Used in this sense, full capacity describes a theoretical situation in which an economy reaches its maximum level of output, unable to grow further.


“These tight labor market conditions could lead to worker shortages in certain occupations now or in the near future,” the board said. “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.”

At the same time, many Massachusetts workers without the right skills to match up with the booming “innovation” economy risk being left behind. While the state’s jobless rate was 2.9 percent in November, there remain pockets of higher unemployment in several of the state’s older industrial areas, including Lawrence (4.9 percent), Springfield (4.8 percent) and New Bedford (4.5 percent).

An all-time high of 66,258 people were employed in the state’s life sciences sector in the third quarter of 2016, and job listings increased 4.7 percent over the same period the year before, according to MassBioEd, an industry-backed group that advocates for science and biotechnology education.

“We see a lot of positions that are difficult to fill in the industry,” said Peter Abair, the group’s executive director, adding that it takes three times as many days on average to fill experienced level positions in life sciences than in most other sectors.

An encouraging sign, Abair said, was a 57 percent increase in the number of graduates with biotechnology degrees from four-year institutions in Massachusetts from 2010-2015.


“It all starts with the educational system,” he said.

The gap between the demand for and supply of skilled workers has been an ongoing concern of policymakers on Beacon Hill, and is likely to be once again in the 2017-2018 session now officially underway.

An economic development bill signed by Republican Gov. Charlie Baker last year include grants to help community colleges, vocational, career and technical schools purchase up-to-date equipment and focus on teaching skills essential for good-paying jobs.

Yet a continuing fiscal crunch could hinder the state’s ability to invest in more such programs or increase funding for the state’s public universities and community colleges.

“Right now, there are thousands of good paying jobs going unfilled in the life sciences, in clean energy, in information technology and in advanced manufacturing,” said Senate President Stan Rosenberg in remarks opening the session on Wednesday.

The Amherst Democrat, who has proposed new taxes for education and other programs, says students often graduate with skills that are mismatched for the modern Massachusetts economy.

“If our state wants to remain one of the world’s true knowledge economy leaders, we need to find ways to give these people the skills they need to fill those jobs,” he said.