Tightening labor market tilts in Mass. workers’ favor
As unemployment rate falls, pay and opportunity rising
The balance of power between employee and employer is shifting, with workers in Massachusetts increasingly able to bargain for higher pay, find new jobs quickly, and even choose between competing offers.
Employers — from tech firms to manufacturers to restaurants — say they are having a harder time finding people to hire as the state’s unemployment rate, 4.7 percent in April, approaches the prerecession low of 4.6 percent. As a result, more and more workers are gaining leverage in getting the jobs, and the wages, they want.
“It’s one of the strongest jobs market in a generation,” said Andrew Chamberlain, an economist at Glassdoor, a California recruiting company. “Job seekers should be taking advantage of it.”
Of the 50 largest American cities, Boston ranked sixth in number of job openings per capita, said Chamberlain. There were more than 1,200 help-wanted listings for software engineers in Greater Boston, 1,000 postings for retail sales workers, and 600 openings for store managers in mid-May. Employers posted hundreds more openings for consultants, business analysts, and customer service representatives.
“It’s one of the leading economies in the country,” said Mark Zandi, chief economist of Moody’s Analytics, a research unit of the ratings agency Moody’s Corp.
Norwood resident Melissa Mergl was working at home as a consultant, undertaking confidential job searches for executives, when she received two phone calls within hours of each other, one from Boston Medical Center, the other from a large dental insurance company in Boston. Both needed a senior recruiter to ramp up staffing.
Both offered substantially more money than she earned as a consultant.Ultimately, she took the job at BMC because she believed in the hospital’s nonprofit mission, she said.
Now, Mergl and a team of BMC recruiters have their own mission: filling more than 400 job openings. “It’s everything from housekeeping to senior director positions,” Mergl said.
These and thousands of other openings across Massachusetts are the product of a strong state economy that has created 66,000 jobs during the past year and lowered the state unemployment rate by more than a percentage point. In the first quarter of 2015, wage and salaries in Greater Boston jumped nearly 4 percent from a year earlier, the greatest gain among the nation’s biggest metropolitan areas, according to the US Labor Department.
The supply of labor here is expected to get tighter as baby boomers retire. By 2017, the state’s employment growth is expected to stall, not because employers will not have jobs, but because there will not be enough workers to fill them all, according to a recent forecast by the New England Economic Partnership, a nonprofit group of business and academic economists.
The tightening job market means that workers in some fields find themselves in the middle of bidding wars for their services.
Phil Gardiner, a business and technology coach from Texas, waded into the job market cautiously while still employed at AT&T, just to see what was out there.
A lot, it turned out.
Gardiner, who holds an associate’s degree, said he was barraged with offers and counteroffers before taking a job with a Waltham staffing agency that is paying him $200,000, including bonuses — a 50 percent raise from his old job. The Waltham firm is also paying the airfare for his weekly commutes to and from his home in Dallas, where he lives with his wife and daughter.
“I love what I do so much I never really looked for a job,” said Gardiner, 46. “But I thought, ‘Wow, the money is really good.’ ”
Since the end of the recession, the state’s economy, driven by its technology, biotechnology, and health care sectors, has generally recovered and expanded faster than the nation’s. The state unemployment rate in April, the most recent one reported, was well below the national average of 5.4 percent; the state’s average jobless rate in the first quarter of the year was the 15th lowest in the nation, according to Labor Department statistics. Hourly wages in the state rose about 3 percent during the past year, compared with about 2 percent nationally.
The improving jobs front, however, has not benefitted residents equally. For example, the average unemployment rate among nonwhite minorities and Hispanics for the year ended in April was 9.3 percent, more than double the 4.3 percent average rate for whites.
In addition, people who have given up job searches, meaning that they are no longer counted as unemployed, or who work part time because they cannot find full-time jobs, number about 150,000 — double the number before the recession, said Alan Clayton-Matthews, an economics professor at Northeastern University.
But the benefits of the state’s improving economy are starting to spread, Clayton-Matthews said.
As high-paying industries such as technology, life sciences, and financial services add workers, income in the state is rising, fueling consumer spending and the demand for goods and services, Clayton-Matthews said. That, in turn, is creating retail and service jobs for lower-skilled workers.
Major retailers are raising wages here and across the country to attract and retain workers. In Massachusetts, for example, Walmart is paying an average wage of about $14 an hour, about $5 above the state’s minimum wage.
Gone are the days of 2009, the depths of the last recession, when applicants formed long lines outside his restaurants whenever there were openings, said Kevin Harron, president and partner at Burtons, an Andover-based chain with 11 restaurants. He said he is having problems fully staffing restaurants with servers and hosts, requiring him to ask employees to work extra hours at overtime rates.
Harron said he often drives along Route 1 in Saugus and sees “Help Wanted” signs, one after another, in front of other restaurants and businesses.
“It’s a highly competitive [labor] market,” he said.
Manufacturers know that feeling. At a recent meeting of the Massachusetts Manufacturing Extension Partnership, a Worcester nonprofit that runs programs to sustain manufacturing, more than a dozen employers complained about labor shortages in the industry and grilled state officials about how the companies could get more trained workers faster.
Paula E.F. Martel, human resources manager at North Easton Machine Co., a fourth-generation machine shop with 25 employees, said she has struggled for nearly six months to fill two positions, for an engineer and a machinist, despite increasing the pay to attract more candidates.
She said the company, which is growing as many US manufacturers move production back from overseas, would probably hire more people if it could find the workers.
The shortage has become so acute, she said, that companies often poach each other’s employees by offering better pay, benefits, or hours.
“It’s gotten a bit more cutthroat,” she said. “If you have an opening, it’s like all bets are off.”