In New England, an aging population is leading to a shortage of workers
In New England, an aging population is leading to a shortage of workers
When the pandemic hit nearly five years ago, the proportion of the population that was either working or actively looking for work slumped, big time.
That’s known as the labor force participation rate, and after that sharp drop, it’s been steadily climbing back. But in the six New England states, the participation rate recovery has lagged the rest of the nation.
A recent report from the Federal Reserve Bank of Boston found that between 2019 and 2023, in the country as a whole, the participation rate was down by half a percent. In New England, it was 2.3% lower.
Fed researchers found that a large portion of that “recovery gap” is due to the region’s aging population — a trend that could keep hurting its labor force participation in the years ahead.
Some business leaders are already grappling with the implications of that trend, like Kelly Krayewsky. Not long after she took over as general manager of Windows & Doors by Brownell in Williston, Vermont last year, she realized something about its employees: About a third of its workforce will retire within the next 10 years. Carpenters, sales people and other long-time employees will be heading out the door, taking their institutional knowledge with them.
“It’s not like I can hire somebody in and bring them up to speed in six weeks on what these folks are doing,” Krayewsky said.
Folks like Charles Pelsue, in the sales department. He’s been at the company so long, he said, that he got the job through a classified ad in the newspaper. His friend had cut it out for him.
“And he handed it to me, and he said, ‘I think you should go talk to this guy,’” Pelsue recalled.
Over 30 years later, he’s still here. But he’s starting to think about retirement and how he might help the company find somebody to replace him.
“I think that’s a big piece of the puzzle,” he said. “Of not just saying, ‘OK, I just turned 65 and I’m done.’ That’s probably not my gig.”
He expects that finding the right people to fill his role won’t be easy. Some recent openings at the company have gone unfilled for months. So, Pelsue said he’d rather cut back his hours, but stick around for a while.
“I would probably spend a little bit of time working a little bit less than a full week before I completely segue into retirement,” he said.
If Pelsue decides to stay in the labor force past traditional retirement age, he’d be doing the opposite of what many workers in the region chose to do when the pandemic hit five years ago.
“We had more people in the right age range who would have been like, ‘Oh, I lost my job. I’m age 60. I’m going to retire five years early,’” said Mary Burke, a senior economist at the Boston Fed. She co-authored the report on the region’s labor force participation rate.
Because the population of New England is older than the country as a whole, so-called “excess retirements” in the pandemic had a big impact on the region’s participation rate. And while Burke doesn’t anticipate another comparable wave of retirement, the region’s aging population will likely keep putting downward pressure on its labor force participation rate for years.
But if more people like Pelsue decide to stay on a bit longer, “then that would offset a little bit of this demographic pressure,” Burke said. “It wouldn’t be enough to create no drag.”
Meaning, New England is likely to have a worker shortage unless the region sees some significant demographic changes. Which is exactly what Kevin Chu of the Vermont Futures Project thinks needs to happen.
“Specifically, we set a goal to grow Vermont’s population to 802,000 by 2035,” Chu said. “It’s currently at about 648,000.”
Chu is the executive director of the project, which is affiliated with the state’s chamber of commerce. For the last few years, Chu has been making the case to local and state leaders that Vermont needs to attract more working age people from outside its borders and add to its housing stock.
Because, Chu said, if it doesn’t, “it’s going to be harder to find medical appointments. It’s going to be harder to dine out because restaurants are only open three days a week.”
And, it’s going to be harder for businesses here to expand. That’s already apparent at OnLogic, a company that makes computers built to withstand harsh environments. It opened new headquarters last year in South Burlington, with growth in mind.
The facility has room for over 500 employees, according to a company spokesperson. Right now, fewer than 200 work there. In one wing of its new building, OnLogic has three assembly lines set up. But there’s room for more, as Lisa Groeneveld, the company’s co-founder, pointed out on a tour of the facility.
“We can push these lines closer to each other,” she said. “I believe we have planned six lines total to fit in this space.”
But she said the company has found it challenging to attract enough qualified local employees to work those lines, let alone fill other administrative roles. It’s also struggled to attract people from out of state, she said, mostly due to Vermont’s high cost of housing.
“Some of the more recent recruits we’ve had, they’ve had to be very high paid in order to feel like they could make Vermont swing,” Groeneveld said. “Those are our executives. But people in the middle… Vermont’s just not working for middle-income Americans.”
So a few years ago, the company opened a second U.S. location in North Carolina. Groeneveld said it’s already found it easier to fill some positions there.
“Ultimately, OnLogic is going to do what’s right for the overall corporation, and if that means we need to shift hiring to North Carolina, that’s what we’re going to do.”
As a native Vermonter, she said, that breaks her heart.
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