Five States with the Worst Labor Shortages in 2024

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Several states are currently facing devastating labor shortages, which can severely impact their economies.

These labor shortages have been attributed to various factors, including an aging population and more workers retiring than entering the workforce.

With businesses struggling to find workers, they might be forced to reduce their operating hours or even shut down entirely, significantly reducing their revenue and overall economic growth.

With a diversifying workforce strategy, employers can tap into the talents and skills of individuals from different backgrounds and communities who may have previously been overlooked.

Promoting diversity can help businesses attract and retain workers who are looking for inclusive workplaces that value and respect diversity.

This can lead to a more creative and innovative work environment, which can benefit businesses in many ways.

By embracing diversity and inclusion, businesses can create a more welcoming work environment that can help address the labor shortage while also promoting a more equitable and just society.

1. Maine:

Maine – a northeastern state in the United States of America – is currently experiencing a significant labor shortage, which has become a major issue for many businesses and industries in the state.

In 2023, Maine had an average statewide unemployment rate of 2.9%, which is very close to the lowest rate ever recorded in 2022.[1]

The problem has been caused by a combination of factors, including the state’s aging population, the high cost of living, and the exodus of younger workers seeking better job opportunities in other states.

The shortage has impacted many businesses, from restaurants and retail stores to healthcare facilities and manufacturing plants, causing them to need help finding enough workers to keep up with demand.

Thus, many businesses now offer higher wages, bonuses, and other incentives to attract workers to the state.

Despite these efforts, the labor shortage remains a significant challenge for Maine.

2. Montana:

Montana’s current labor shortage can be attributed to various factors, but the primary one is the state’s thriving tourism industry.

As the number of tourists visiting Montana has increased over the years, the demand for seasonal workers in the hospitality and service sectors has also increased.

Finding enough workers to meet the demand has proven to be a challenge for employers because of Montana’s remote location and sparse population.

Between November 2021 and October 2023, the unemployment rate in the state remained consistently below 3.0% for a period of 24 months.[2]

With just over a million residents, Montana is one of the least populated states in the US.

The lack of populations makes it difficult for employers to attract new workers from other parts of the country, especially for seasonal jobs that may only last a few months.

Another factor contributing to the labor shortage is the need for more affordable housing in some of Montana’s popular tourist destinations.

Many workers need help finding affordable housing in areas where the demand for rentals is high, making it difficult for them to accept job offers in these areas.

The labor shortage in Montana affects the tourism industry and other sectors such as healthcare, construction, and manufacturing. Employers need help finding skilled workers, and this can impact the state’s economy as a whole.

3. New Hampshire:

New Hampshire faces a significant labor shortage, most pronounced in the healthcare industry. The state is grappling with a high demand for medical professionals, especially nurses, and there aren’t enough skilled workers to meet this demand.

This shortage has been caused by a combination of factors, including the aging population of the state and a low birth rate, which means that there needs to be more young workers entering the workforce to replace those retiring.

This has put significant pressure on the healthcare sector, which is struggling to keep up with demand, and has led to concerns about the quality of care patients receive.

New Hampshire’s economy is diverse and includes industries such as healthcare, education, and manufacturing, among others, which is similar to the overall United States economy.

Despite having one of the highest interstate commuting rates in the country, the state has a low unemployment rate, with a preliminary jobless rate of 2.3% in November, based on data from the BLS.[3]

4. South Dakota:

South Dakota is currently experiencing a significant labor shortage, primarily attributed to the state’s low unemployment rate, currently the lowest in the country.

This situation has created a challenging environment for businesses needing help finding qualified workers, particularly in the construction and manufacturing sectors.

These industries have been hit the hardest due to a need for more trained and skilled workers, leading to delays in project completion and financial losses for companies.

The labor shortage has also increased competition among businesses in the state, leading to higher wages and employee benefits, which has put additional financial pressure on employers.

South Dakota’s unemployment rate held steady at 2.1% in March 2024, while the labor force remained unchanged with 481,500 workers.

The number of unemployed individuals decreased by 100 (1.0%) to 9,900 persons.

In comparison to March 2023, the labor force in March 2024 increased to 481,500 from 478,500, with an increase of 2,100 (0.4%) in the level of employed individuals, and a rise of 800 persons (8.8%) in the number of unemployed individuals.[4]

5. Vermont:

One of the main contributors to Vermont’s labor shortage is the state’s aging population, which has led to a decline in the available workforce.

Additionally, the high cost of living in Vermont, especially in terms of housing costs, has made it increasingly challenging for workers to afford to live in the state.

Another significant factor contributing to Vermont’s labor shortage is the need for more affordable housing.

Many workers need help securing affordable housing within the state, making it more challenging to accept jobs and relocate to Vermont.

Furthermore, Vermont’s small size and remote location can make attracting new workers from other parts of the country challenging, as many people may be reluctant to move to such a geographically isolated area.

Vermont had 17,000 job openings in February 2024, which is slightly lower than the 18,000 openings in January.

The job openings rate in Vermont was 5.2 percent in February, while it was 5.5 percent in the previous month.[5]

Final thoughts…

While various factors contribute to labor shortages employers can take steps to help address this issue.

By diversifying their workforce and promoting diversity and inclusion, businesses can attract and retain workers from different backgrounds and communities, leading to a more creative, innovative, and equitable work environment.

By sponsoring foreign workers through various legal immigration programs, such as the EB-3 visa, employers can fill positions that they are unable to fill with U.S. workers.

Further, addressing the shortage will require a coordinated effort from all stakeholders, including government agencies, businesses, and job seekers.

Only through collective action can we hope to overcome this challenge and ensure a robust and thriving economy for all.

References:

[1] USA Facts.“Is there a labor shortage in the US?”.https://usafacts.org/articles/is-there-a-labor-shortage-in-the-us/

2 Eric Russell. “Maine’s unemployment rate hovers near record low”. https://www.pressherald.com/2024/03/01/maines-annual-unemployment-rate-inches-up-from-record-low/

3 State of Montana Newsroom. “State Sets New Records for Employment, Labor Force in November”.https://news.mt.gov/Governors-Office/State_Sets_New_Records_for_Employment_Labor_Force_in_November

4 Alicia Wallace. “How New Hampshire’s economy compares to the rest of the US”. https://edition.cnn.com/2024/01/23/business/new-hampshire-economy-primary/index.html

5 South Dakota Dept. of Labor & Regulation. “Overview of the Current Labor Market”. https://dlr.sd.gov/lmic/overview.aspx

6 US Bureau of Labor Statistics. “Vermont Job Openings and Labor Turnover — February 2024”. https://www.bls.gov/regions/northeast/news-release/jobopeningslaborturnover_vermont.htm