LI jobless rate falls to 3.5% due to labor force declines

The number of Long Islanders who are employed and the number of unemployed who are looking for work both fell last month from the previous November, bringing the region's unemployment rate down to 3.5%, according to state data.

"The 'improvement' in November’s unemployment rate compared to last November was almost entirely due to a reduction in the region’s labor force," said Shital Patel, labor market analyst for the Labor Department's Hicksville office.

The exodus from the labor force skews the calculation of the region’s unemployment rate, which declined by 0.4 percentage points from October, according to the state Labor Department data released Tuesday.

The Island’s labor force — the sum of all employed people and unemployed Islanders actively looking for work — fell by more than 36,000 on a year-over-year basis, according to the state data. At the same time, the number of employed residents declined slightly from November 2020 to last month by 1,100, data show.

The year-over-year decline in the labor force is part of a larger decline that the region has seen since the pandemic brought about historically high levels of job loss and unemployment insurance filings.

Long Island's labor force was down 4.3% last month compared with pre-pandemic levels in November 2019, Patel said. The factors keeping many Islanders on the sidelines of the labor market have remained the same since the health crisis began, despite advancements in vaccination and treatments.

"The reduced availability of child care and ongoing health concerns continue to force workers to quit their jobs, especially as businesses have been requiring employees to return to the workplace," Patel said.

Economist John Rizzo called the data "more evidence'' of a "substantial and persistent" labor shortage.

"This is the lowest labor force participation for the month of November in 20 years," said Rizzo, a professor at Stony Brook University.

Rizzo said he and many in the business community had hoped that labor force participation on the Island would grow substantially following the expiration of enhanced unemployment benefits in September.

While he also cited inaccessible child care and early retirements as factors in the labor force decline, Rizzo said worker attitudes have changed, too.

There "is a desire to have different working arrangements, flexibility, and more leisure time," he said. For industries where remote work is an option, employers looking to hire may have to be more open to how workers want their schedules to look.

And for jobs where remote working isn't possible, particularly in service-oriented jobs, opportunities for growth and wages may be one of the few ways to get candidates through the door, he said.

"That's a permanent change that the labor market is going to have to address somehow," Rizzo said.

The municipalities on the Island with the highest and lowest unemployment rates last month were the Village of Freeport at 5.0% and the Town of North Hempstead at 2.9%, respectively.