New Jersey added 6,700 jobs and its unemployment rate fell to 3.9% in May, the state Department of Labor and Workforce Development reported Thursday, as the state continued to dig its way out of the employment hole left by the pandemic.
The low jobless rate sets the stage for another summer of labor shortages and all that comes with it: higher wages for workers, longer waits for customers and more work for small business owners.
“The demand is there but we don’t have the staff to fill all the orders,” said Erin Golden, owner of LBI Cleaning, a cleaning service based in Eagleswood. “We’re just killing ourselves just to keep the lights on.”
The monthly unemployment report gives residents a look at the health of the state’ labor market. It is made up of a survey of employers to measure the number of jobs and a survey of households to measure the jobless rate. The report is a preliminary look and will be revised next month.
The May survey comes as the Federal Reserve Board launches into a strategy to raise interest rates. The plan is to increase borrowing costs, slow down the economy and get control of consumer prices that are increasing at their fastest pace in 40 years.
Heading into the summer tourism season, small business owners are bearing the brunt of an economy that is out of balance. They have too much demand for their services and not enough supply to deliver.
Lucky’s Bed & Biscuit, a pet day care and boarding business with 45 employees in Stafford, saw a huge increase in demand during the pandemic as customers adopted dogs and moved to Ocean County, owner Leslie Lorah said.
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Lorah has been trying to hire receptionists, bus drivers, groomers and animal care workers to keep up. She has increased wages above New Jersey’s $13 minimum wage to stay competitive with the new Chick-fil-A in town. She has advertised on social media. She has reached out to high schools and chambers of commerce.
But she can’t afford to spend too much time recruiting because she and her managers need to mind the shop.
“We’ve actually been turning animals away to keep the ratio safe for the pets and the staff,” Lorah said.
Higher inflation and interest rates? No problem so far for New Jersey’s job market
With May’s employment gains, New Jersey has recovered about 96% of the jobs it lost when the pandemic hit the state in March and April, while the jobless rate has plummeted from its peak of 15.8% to below 4%.
Financial services and education and health services had the biggest gains, with 2,600 jobs each. Leisure and hospitality, the sector hit hardest during COVID-19, added 2,000 jobs and has regained about 91% of the jobs it lost in the pandemic.
Construction and manufacturing loses 1,300 jobs apiece.
First time in the labor force:Teenagers head back to the Jersey Shore for summer jobs
Economists have said federal government policies during the pandemic, from low interest rates to stimulus checks, helped consumers and workers recover relatively quickly.
Too quickly, it turned out, for employers trying to keep up.
Employers at the Shore are hoping to avoid a repeat of last summer, when they had to hike wages and cut back on hours to stay afloat.
They have gotten some relief since then. For instance:
- The state ended extended unemployment benefits last September.
- COVID-19 hospitalizations have declined in a sign the pandemic’s most severe threat is easing.
- And thousands of international workers with J-1 visas have returned to seasonal employers at the Shore after being isolated in their home countries for the past two summers.
“I’ve heard overall the climate is much better than last year,” said Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, a trade group.
Still, there were signs of a brewing labor shortage even before the pandemic due in part to a simple numbers game. A wave of retirements by the giant baby-boomer generation threatens to put the brakes on growth in the US working-age population through 2030, The Conference Board, an economic research group, warned in 2020.
To that end, New Jersey lawmakers are considering a bill supported by the NJBIA that would in part expand the work week for 16- and 17-year olds from 40 hours to 50 hours and allow them to work up to 10 hours a day in the summer instead of eight.
Golden at LBI Cleaning said she’ll take any help she can get.
Her company provides cleaning services for Long Beach Island restaurants, rentals and medical offices — a niche that has been in big demand during the pandemic when people from cities flocked to the Shore for safety.
Golden has six employees, but she needs 30. So she has turned down new clients and pitched in, recently working 18 consecutive days, often waking up at 5 am and going to bed at midnight.
Her outlook for the summer: “Pray,” Golden said. “I feel like Icarus in the Greek story. I’m flying a little too close to the sun and my wings are going to just melt.”
Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at email@example.com.