Tackling the 2024 Labor Shortage in Maryland

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Maryland, renowned for its diverse economy and thriving job market, is grappling with a pressing and urgent issue, such as a significant labor shortage across various industries.

The Bureau of Labor Statistics reported that Maryland’s unemployment rate was 2.6% in April 2024, a slight increase from 2.5% in March 2024. Compared to a year ago, it had risen from 1.9%.[1]

The scarcity of skilled workers has become an escalating concern for state businesses, severely impacting their ability to keep pace with the demands of a rapidly evolving economy.

Maryland’s labor shortage can be attributed to several complex and interconnected factors.

One key factor is the mismatch between the skills possessed by job seekers and the skills demanded by employers.

As industries evolve and technology advances, the demand for specialized skills has increased, leaving many positions unfilled due to a need for more qualified candidates.

The rapid pace of technological innovation has led to an increased need for unskilled workers in the state, particularly in data science, artificial intelligence, and cybersecurity, thus accentuating the shortage of such entry-level talent.

Another contributing factor to the labor shortage is the aging workforce in Maryland.

As older workers retire, the pool of experienced professionals to fill their roles shrinks, leading to gaps in the labor market.

The lack of affordable housing and the high cost of living in some metropolitan regions have made it challenging for workers to migrate to areas with more plentiful job opportunities.

This spatial mismatch has led to certain regions experiencing acute labor shortages while others grapple with high unemployment rates, further exacerbating the state’s labor market challenges.

The labor shortage in Maryland has far-reaching consequences for businesses, the economy, and society.

Businesses need help filling critical positions, which can hinder their ability to meet production deadlines, deliver quality services, and innovate.

The dilemma, in turn, can lead to decreased productivity, lower profits, and a loss of market competitiveness.

The labor shortage can have social implications, such as increased income inequality, as specific industries experience wage inflation to attract scarce talent.

The shortage of workers in essential sectors like healthcare and education can adversely affect the quality of services provided to residents, further highlighting the urgency of addressing this multifaceted issue.

Addressing the labor shortage in Maryland requires a concerted effort from policymakers, business leaders, and educational institutions to develop strategies to upskill the workforce, attract talent to the state, and create a more equitable distribution of job opportunities.

Without decisive action, the labor shortage could impede the state’s economic growth and erode its competitiveness in the global marketplace.

Solutions to the Labor Shortage

Implementing a comprehensive strategy that fosters cooperation among the government, business sector, educational institutions, and community organizations is essential to tackling Maryland’s workforce shortage.

Several key strategies can be implemented to address Maryland’s labor shortage, build a more resilient workforce, and bridge the skills gap:

1. Investing in Skills Training Programs

It is essential to prioritize investment in training programs that equip job seekers with the necessary skills for high-demand industries.

In 2014, Maryland’s General Assembly created the Employment Advancement Right Now (EARN) program to develop industry-led Strategic Industry Partnerships.

The primary aim is to enhance the skills of Maryland’s workforce, bolster the state’s economy, and foster long-term employment for working families.

Up to October 2023, more than 9,300 unemployed and underemployed individuals have secured jobs due to their involvement in EARN.[2]

Collaborations between businesses and educational institutions can help tailor training programs to meet specific employer needs.

Focusing on offering support for continuous learning and upskilling for individuals already in the workforce is important.

This method can help employees adapt to evolving industry requirements and improve their career prospects.

Promoting access to affordable education and training opportunities for all individuals, regardless of their economic backgrounds, is crucial for building a skilled and competitive workforce.

2. Promoting Apprenticeship Programs and Career-Counselling

As of January 2024, there are 11,378 apprentices registered in apprenticeship programs, which provide individuals with practical experience in particular trades or industries while also earning a wage.[3]

This type of program is beneficial as it provides valuable opportunities for individuals to access pathways to secure employment and develop in-demand skills.

Apprenticeships allow participants to receive training from experienced professionals in their field and can lead to nationally recognized certifications.

Apprentices can learn in a real-world setting, gaining practical skills that are highly sought after in the workforce.

Expanding apprenticeship programs provides individuals with a direct pathway to gainful employment.

It also helps to address the skills gap in various industries, ultimately contributing to a more robust and skilled workforce.

Providing comprehensive career counseling services to students and job seekers can help them make informed decisions about their career paths.

Guidance on educational opportunities, skills development, and job market trends can better prepare individuals for the workforce.

Career counseling services can also include assistance with resume writing, interview preparation, and networking strategies to help individuals stand out in a competitive job market.

Offering access to resources such as career assessments, industry insights, and mentoring programs can further enhance the effectiveness of career counseling services.

3. Hiring Foreign Workers

Using the EB-3 visa program[4] to address labor shortages in Maryland and hire unskilled workers presents opportunities and challenges.

The EB-3 visa[5] is typically geared towards skilled workers, professionals, and other workers with specific qualifications.

Still, it also includes a category for “other workers” that can potentially be utilized to bring in unskilled workers to fill essential roles in industries facing labor shortages in the state.

One key benefit of using the EB-3 visa program to hire unskilled workers in Maryland is the opportunity to address critical gaps in the labor market.

Hiring workers from different countries can bring diverse perspectives, ideas, and cultural experiences to the workforce.

Embracing cultural diversity can enhance the organization’s creativity, innovation, and problem-solving.

This can help businesses navigate and engage with global markets effectively, leading to a competitive advantage in an increasingly interconnected world.

Industries such as agriculture, hospitality, construction, and healthcare often rely on unskilled labor to perform essential tasks, and bringing in workers through the EB-3 visa program can help alleviate shortages and ensure that businesses have the workforce they need to operate efficiently.

Challenges are associated with using the EB-3 visa program to hire unskilled workers.

The program has specific requirements that must be met, including a job offer from a U.S. employer willing to sponsor the worker’s immigration, which may pose challenges for some employers looking to hire unskilled workers.

4. Embracing Flexible Scheduling

Responding to changing work preferences in the wake of the COVID-19 pandemic, businesses can tap into a broader talent pool by offering flexible scheduling options.

This can attract and retain workers who value flexibility and work-life balance.

Businesses can implement flexible scheduling to accommodate the varying needs of their workers.

This flexibility includes compressed workweeks, flextime, and the ability to shift start and end times.

By providing these flexible scheduling options, businesses can better accommodate their employees’ diverse needs, ultimately fostering a more inclusive and supportive work environment.

The trend of flexible work is gaining traction in the post-COVID era, although it has yet to be widely prevalent.

In the U.S. workplace, flexibility remains limited, with only 12% of full-time employees in private industries having access to a flexible workplace and 17% having access to a flexible work schedule as of September 2023.[6]

The Bottom Line

The labor shortage in Maryland presents a complex and multifaceted challenge that requires a collaborative and comprehensive approach.

By implementing these strategies and fostering collaboration between government, businesses, educational institutions, and community organizations, Maryland can address the root causes of the labor shortage and build a more resilient and diverse workforce.

Investing in skills training programs, promoting apprenticeship opportunities, and enhancing career counseling services, Maryland can build a more resilient and well-equipped workforce to meet the demands of its evolving economy.

Policymakers, businesses, educational institutions, and community organizations must work together to develop and implement strategies to effectively bridge the skills gap and create a more equitable distribution of job opportunities.

Taking proactive measures to tackle the labor shortage will benefit businesses and the economy and contribute to a more prosperous and competitive Maryland in the global marketplace.

References:

[1] Jeff Clabaugh. WTOP News. “Maryland unemployment rate keeps rising”. https://wtop.com/maryland/2024/05/maryland-unemployment-rate-keeps-rising/

2 Maryland Department of Labor. “New Economic Impact Report Offers Insights into Maryland’s Top Industries and Occupations”. https://content.govdelivery.com/accounts/MDDLLR/bulletins/38861db

3 ESAC. “Maryland: State of the State”. https://esaconference.org/states/maryland/

4 USCIS. “Employment-Based Immigration: Third Preference EB-3”. https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-third-preference-eb-3

5 EB-3 Work.https://eb3.work/

6 Mehdi Punjwani and Sierra Campbell. USA Today. “Employee benefits statistics in 2024”. https://www.usatoday.com/money/blueprint/business/hr-payroll/employee-benefits-statistics/