A Labor Market Mismatch in New England

A mismatch is brewing between the supply of skilled workers in New England and the increasing demand for such workers, according to a new report by the New England Public Policy Center at the Federal Reserve Bank of Boston.

The study by senior economist Alicia Sasser Modestino shows that, over the next 10 years, New England will face not only a shortfall in the number of workers it needs to pull the region out of recession, but also a detrimental lack of “middle skill” workers—essentially people with an associate degree or some college less than a bachelor’s.

Even in these times of high unemployment, forecasts of labor shortages are becoming more prevalent. New England has long-boasted a highly educated population relative to other parts of the country, but the retirement of baby boomers and net losses in population migration suggest that the demand for skilled workers will increasingly outpace supply. These and other looming demographic shifts threaten to hamper regional recovery efforts.

Modestino argues that the dearth of middle skill workers in New England could also contribute to protracted economic woes. While the wage increases that result from labor shortages might generally incentivize workers to migrate or to seek additional educational training, middle skill workers, more so than other groups, lack the resources necessary to take advantage of increased wage-earning opportunities. Over the next decade, the mixture of workers and skills in New England will grow increasingly disadvantageous. Coupled with worker shortages, this mismatch in the labor market could seriously impede economic growth in the region.

Universities, and especially community colleges, according to Modestino, should focus on degree-completion initiatives, increased financial assistance for students, and greater opportunity for career training and professional collaboration to fill the looming workforce gaps; such areas of focus would produce a “win-win-win” for employers, for the regional economy, and for students themselves.

Recent Posts: Too Many College-Educated Workers or Too Few? (Forum); College Labor Shortages in 2018? Part Deux (Harrington/Sum); The Real Education Crisis: Are 35% of all College Degrees in New England Unnecessary? (Carnevale et al); The Future of the Skilled Labor Force: New England’s Supply of Recent College Graduates, Sasser (pdf)


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