PROVIDENCE, R.I. (WPRI) — Numerous businesses across Southern New England have been forced to slash their hours or close their doors completely due to staffing shortages, and the phenomenon now has a name: The Great Resignation.
It comes in the wake of a record-breaking exodus of workers. The U.S. Labor Department reported 4.3 million people quit their jobs in August.
Matt Weldon, director of the Rhode Island Department of Labor and Training, said although people have left their jobs, they aren’t leaving the workforce, something evidenced by the decline in the unemployment rate.
“They’re going to work somewhere else,” Weldon said during an interview on 12 News at 4. “So, the question is really, ‘Why?’ And I think the government’s role right now is to listen, try to lend an ear, and be helpful.”
Leonard Lardaro, a professor of economics at the University of Rhode Island, believes the worker-employer reckoning will last another six months to a year, at which points things will sharply improve.
For now, certain industries are having to find ways to either entice workers through higher wages and better incentives, or close their doors.
“A lot of people thought in some states that well, the extra unemployment insurance were causing the non-availability of labor,” Lardaro said. “It turns out, what was much more important was people fearing getting COVID in public. In a lot of areas like tourism, hospitality — which are very important parts of our state’s economy — a lot of customers treat you badly, and that’s another negative to look at, and then to what extent is the compensation adequate.”
Lardaro said additionally, a lot of workers are simply re-evaluating their life plans after getting a renewed perspective from the pandemic.
Between the labor issues, a shortage of supplies like computer chips and logjam of goods at ports, Lardaro said the holiday season is likely to be unusual. The one silver lining: higher prices and fewer goods could mean stores are able to get by with fewer employees.
Still, Lardaro said Rhode Island is on the right, if not bumpy, path to economic recovery. Though he said getting back to “normal” might not look the same as it did in 2019.
“What will be normal if you define that as going back to the old [employment] levels, will compositionally be very, very different because so many small businesses will have gone away,” he said.