New England Must Bank On New Skills As originally appearing in Worcester Business Journal
By Jim Brett and Alan Clayton-Matthews
At a recent conference, economists from around the region discussed the outlook for New England. As it has been for the last several years, the forecast was tempered: The region is expected to experience slow growth and slow recovery over the next four years. During the recession, we lost some 5 percent of jobs in New England, and we’re unlikely to return to pre-recession employment levels until well into 2015.
Among the six states, Massachusetts is enjoying a comparatively healthy recovery, having been in an expansion phase since the summer of 2009. But its economic growth is expected to slow to a pace more in line with the national economy. Between December 2009 and April 2012, the state’s unemployment rate fell from 8.7 percent to 6.3 percent. Unemployment still remains high, with many people who are under-employed, discouraged or marginally attached to the labor force. The state has regained just over half of the 143,000 jobs lost during the recession.
Job growth uncertainty derives from external factors. New England’s prosperity is obviously intertwined with the rest of the nation’s and trade partner Europe.
Given the factors we can’t control, it’s important to look at those elements in the economic mix that we can address. In any recession, there is dislocation and realignment of the labor market with emerging employment opportunities. In this recession, we see a significant disconnect between the types of jobs being created and the skills of job seekers. Around New England, employers in many industries have job openings but cannot find qualified employees.
There’s also a “skills gap” for employers needing workers with specific job skills, such as advanced manufacturing techniques. Precision manufacturing technology becomes more sophisticated every day, and so do the skills needed to work in this sector. We need to do more to equip the existing labor force and the next generation of workers with sophisticated mid-level skills needed.
Since 1990, the number of workers with post-secondary education has been growing more slowly that in other parts of the country. In particular, New England faces a shortage of workers with education beyond high school but short of a bachelor’s degree. Many of the jobs in growing sectors, such as health care, will require this mix — some 40 percent of future openings. It’s vital that our educational institutions recognize this and align their offerings accordingly.
Skilled workers are the catalyst to transform New England’s long-term economic prospects. Our recovery will depend in large measure on the alignment between the skills of available workers and the emerging job opportunities. With slow growth projected for the next few years, and significant external economic risks we can’t control, enhancing the skills of our labor force will pay huge dividends.
James T. Brett is president and CEO of The New England Council. Alan Clayton-Matthews is Massachusetts forecast manager for the New England Economic Project, and a professor at Northeastern University.