As we navigate through and past the COVID-19 pandemic, Essex County has within our grasp the antidote to recent labor market reports: human potential.
Prior to COVID-19, Massachusetts had long enjoyed one of the lowest unemployment rates in the country. But things have changed. While state data for June is not yet available, the Bay State’s May unemployment rate of 16.3% tied for the fourth highest in the country and was 3% higher than the national rate at the time. (Data released last week indicates the national rate has since dropped to 11.1%.) Locally, the numbers were even more dismal. According to the Massachusetts Department of Unemployment Assistance, the May unemployment rate for Essex County was a startling 18%. That’s nearly 73,000 residents of our 34 cities and towns who did not have a job.
This summer, a convergence of events could complicate matters even further. The $600 per week federal unemployment bonus – credited with keeping many households afloat during the pandemic – will end the week of July 31. The temporary moratorium on evictions of residential and small business tenants – signed by Gov. Charlie Baker in April as a housing safeguard – is set to expire on Aug. 18. Paycheck Protection Program loans have been deployed and many businesses that took advantage of the eight-week subsidy are nearing the end. In addition, many businesses are realizing the economic impact of COVID-19 will stretch on, resulting in additional layoffs.
The average worker is standing on the edge of a perfect storm, even if federal and state governments implement additional short-term economic stimulus.
In a short time, the COVID-19 health crisis has turned the economy upside down, and recent studies indicate that it isn’t going to change anytime soon. Some economists are predicting it will take a full decade to recover. The Becker Friedman Institute at the University of Chicago estimates that 42% of recent employment layoffs in the U.S. will become permanent as businesses and entire sectors face lasting damage due to COVID-19. In addition, some businesses are using coronavirus as an opportunity to shift their business models permanently to adapt to new technologies or market shifts, which will reduce the number of workers they rehire as the economy continues to reopen.
“My assumption is there will be a significant chunk ... well into the millions of people, who don’t get to go back to their old job ... and there may not be a job in that industry for them for some time,” Federal Reserve Chair Jerome H. Powell said at a news conference in June.
The economic picture does indeed seem bleak, especially as anxiety mounts over new coronavirus surges across the country and highlighted inequities in our nation’s systems that disproportionately affect people of color.
Nineteenth-century French diplomat and sociologist Alexis de Tocqueville said, “The health of a democratic society may be measured by the quality of functions performed by private citizens.”
Now, so many of our “private citizens” – 73,000 in Essex County alone – have been dramatically displaced by this global health crisis. And if we are not proactive, this loss could become permanent. This would affect all of us and our communities, which rely on a vibrant workforce to thrive.
Together, we do have an antidote.
It starts with an investment in human potential, a plan that provides more than a stopgap to labor market issues. Many unemployed workers – particularly those in the hospitality, travel and retail industries, which have been hardest hit by this crisis – will be faced with some difficult decisions ahead. Should they change careers? Relocate? Moving is not desirable for most and going back to school to learn a new skill or earn a degree can be time-consuming and expensive.
But in Essex County, long before the coronavirus upended the economy, a collaboration of area funders, nonprofits, educational institutions, employers, local workforce investment boards and government leaders were working collectively on a systems-based effort to prepare Essex County’s workforce to take advantage of emerging opportunities, work which is now more important than ever before. The efforts noted below, both of which are actively recruiting students, are just two examples of many workforce development efforts happening across the county.
The GE Foundation Advanced Manufacturing Training Expansion Program, led by the NorthShore Workforce Board and many local partners, recently graduated 50 participants – more than half of whom are people of color – from a free five-month certificate program that qualifies them for careers in advanced manufacturing, a sector that offers excellent wages, career stability and one that is expected to experience significant growth as baby boomers retire from the industry.
Funded by ECCF and led by North Shore Community College, the Northeast Regional Prior Learning Assessment Program is creating pathways for local residents and students to earn college credit based on knowledge and skills they’ve learned on the job or in life, saving them time and money. “Given the impacts of the coronavirus, the timing may be good for this initiative given the number of folks who are out of work, who have realized that they need to change jobs to make more money, or find themselves with the time to build on their education foundation,” said former NSCC President Patricia A. Gentile, who retired from the school this week.
At ECCF, we believe that creative, collaborative systems-based efforts like these are how we will manage our way out of the economic fallout from COVID-19 and prepare our workforce for the future.
As we shift out of crisis mode, ECCF – through our COVID-19 Response Fund – will be looking to invest in organizations and initiatives that work toward the recovery and rebuilding of our local economy and labor force. The data indicates that a variety of sectors – including healthcare, technology, supply chains, marketing and essential services – will be ripe for that investment.
But leaders in local, state and federal governments; educational, community and nonprofit leaders and employers need to work together to develop solutions and make a commitment to collaborative innovation and creativity, knowing that the road ahead will be rough and long. We can, and if you heed the words of de Tocqueville, we must help unlock the human potential of Essex County, so that in a post-COVID world, we all have a chance to thrive.
Stratton Lloyd is COO and vice president for Community Leadership at Essex County Community Foundation. Michelle Xiarhos Curran is the Foundation’s communications writer.