Independent Fiscal Office Releases Report on Labor Shortages

The Pennsylvania Independent Fiscal Office published a new report that examines the factors that have contributed to the state’s labor force contracting by 120,000 workers since the start of the pandemic.

Recent data (May 2022) show the state with an unemployment rate of 4.6% and approximately 300,000 unemployed Pennsylvanians looking for work.

The report identified several factors making it difficult for employers to attract and retain staff, despite nominal wages that are considerably higher than pre-pandemic levels:

• Lifestyle choices

• Workers may have decided that time at home or with family is more important since the start of the pandemic.

• Households with more than one source of income may decide that one family member can quit work or reduce their time commitments to work.

• Workers that were close to retirement anyway may have decided to enter retirement early. Health concerns, strong market performance in 2021, and other factors may be related to early retirements.

• Difficulty securing childcare – Jobs in the childcare industry have declined by 7% in PA.

• Lingering health issues – i.e., “long COVID”

• Ongoing student loan repayment moratorium – Approximately 1.8 million PA residents with Federal student loan balances are saving an average of $3,000 to $4,500 per year while payments and interest charges are being waived.

• Higher government benefits – The elimination of the income-based phase out for SNAP benefits creates a punitive cliff for benefits that are twice the pre-COVID level.

Schreiber Accounting and Advisory can help you understand your options for attracting and retaining quality talent with Virtual CFO services. Contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.