The reprieve from the labor shortage many Long Island businesses were hoping to see after enhanced unemployment ended did not come last month, new state data shows.
In September, the Island’s unemployment fell to 4.2% from 5% in August, according to state Labor Department data released Thursday. But while a lower rate usually indicates improved employment activity, last month’s results are the product of Islanders exiting the labor force entirely instead of landing jobs.
That's tough news for employers struggling to fill openings.
The labor force – the sum of all employed residents plus unemployed residents who are job hunting – declined last month, dipping to 1.42 million from 1.45 million in August, a drop of 26,400, according to the data.
The decline in the labor force is typical for this time of year as businesses shed summer seasonal workers. This year, however, many business owners in the hospitality sector were hoping for a big increase in job seekers.
For months, owners have complained about a lack of available workers, specifically in hourly restaurant, retail, and hotel jobs. Looking for a root of the problem, many pointed to extended jobless benefits, including a weekly enhancement of $300.
But enhanced benefits expired in New York on Sept. 5, and still, the wave of job seekers businesses were hoping to see last month never came, according to Thursday’s report.
"We all assumed that when people stopped getting these unemployment benefits that there was going to be this tsunami of applicants," said Mark Irgang, president of the Long Island Hospitality Association. "We did not see that."
While the hiring situation has improved somewhat for some higher-paid positions in hospitality, entry-level jobs like housekeeper are as tough to fill now as they were months ago, Irgang said.
Shital Patel, labor market analyst for the Labor Department’s Hicksville office, said the labor force shrinkage is part of an ongoing trend that started in January. As of last month, the Island’s labor force was down 61,500 – 4.1% – compared to the same month in 2019.
That labor force shortage has only grown over 2021, Patel said, and there are several factors at play, including some specific to the Island’s workforce demographics.
"The pandemic has exacerbated many issues already percolating on Long Island," Patel said.
One of those issues has been the Island’s aging workforce. With a higher percentage of older workers than other localities, the Island’s workforce may have been more impacted than others by the threat of coronavirus and now its delta variant.
"Older workers who were more at risk than younger ones from COVID opted to retire. … This may have had an outsized impact on Long Island, with its older-than-average workforce," she said.
Of course, other issues, like the high price of child and elder care, could have pushed many out of the labor force as they chose to stay home and look after loved ones, Patel said.
John Rizzo, chief economist for the Long Island Association business group, said one of the bigger shifts happening in the labor market is in applicant expectations.
"There is a change in the way people want to interact with work," Rizzo said. "They want more flexible hours. …They’re saying I would rather work three days a week and not have to commute."
Additionally, many workers may have been able to save a little extra allowing them to be choosier in the jobs they apply for, and they’re increasingly willing to hold out until they get it, Rizzo said.
The Island’s jobless rate was lower than both the state – 6.3% – and the nation’s 4.6%.