From Tallahassee Democrat
Two years into the COVID-19 pandemic, workforce challenges remain one of the largest issues impacting local businesses.
More than 200 business leaders and others gathered earlier this week at the annual Economic Forecast hosted by the Tallahassee Chamber of Commerce to address economic indicators and predictions, including a snapshot of the Chamber’s Community Scorecard.
Chamber President and CEO Sue Dick said talent and workforce gaps were an issue before but it’s now amplified by the pandemic, new work-space structures and scheduling.
“Talent was identified as the No. 1 work incentive for businesses to succeed,” Dick said. “It’s never going to go away, especially if you want to be competitive.”
The January 2022 Community Scorecard, made up of data such as the unemployment rate and job openings, shows year-over-year improvement in several areas and are illustrated in “green” blocks.
For example, December had a 3.5% unemployment rate compared to 3.6% in November. The total of non-farm related jobs in the Tallahassee Metropolitan Statistical Area was 184,000 in December compared to 178,500 in December 2020.
However, three “red” areas are third-grade reading scores, violent crimes and the Gross Domestic Product (GDP).
“Those pretty much tell the story of our community. The reason for the Community Scorecard is exactly in its name,” Dick said. “We have got to have the data in front of us and create a community plan on addressing those issues that are failing or struggling.
In terms of Tallahassee, Dick said it’s an “economic reflection of where we are.”
“It’s good to see the green in the job growth. We’re going in the right direction,” she said. “But until the entire scorecard is green, we’re not really making the progress we need to be as a community.”
Keynote speaker and economist Sean Snaith, who serves as director of the University of Central Florida’s Institute for Economic Forecasting, said the U.S. and Florida’s economy was strong in February 2020 and the state had the best labor market he’d ever seen.
A month later, a study released by Imperial College of London predicted 2.2 million deaths from COVID-19 in the United States. Snaith said the report was the “hair-on-fire moment, and politicians on every level started freaking out.”
Shutdown mandates for schools and non-essential businesses ensued as hospitals became overwhelmed by COVID cases.
Prompted by the COVID-19 pandemic, the country plunged into the worst recession since the Great Depression in the 1930s. He and other economists said the pandemic-centric recession was self-inflicted and short lived.
Fast forward two years and the economy is recovering. However, Snaith said much of today’s issues – inflation, supply chain failures, rise in fuel prices and supermarket shortages – can be traced back to COVID-19 policies.
“All of these things tie directly back to the response to the pandemic in terms of policy,” Snaith said. “It’s my opinion, and I think eventually truth will make a comeback in our country. As we get further and further from this event and we have more perspective on it, this will go down as the biggest public policy mistake in our country’s history.”
Snaith said the cost to enact a policy must be considered compared to the benefits, adding there was no cost-benefit analysis associated with pandemic-related policies.
In addition, pent-up demand for products and goods coupled with trillions of dollars in public and stimulus money created by the pandemic continues to strain the manufacturing and logistics within the supply chain, which was not designed to handle the surge.
“This is an ongoing problem,” said Snaith, adding consumers will see seemingly random items missing from store shelves. “It’s a Forrest Gump supply chain at this point. We don’t know what’s going to be missing from the box of chocolates when you go to the store.”
He predicts the pent-up demand will normalize within about eight to nine months.
Snaith touched on a few topics related to Tallahassee, including the city’s housing market and an industry sector growth forecast.
The labor market, he said, is complex and impacted by several factors. Snaith said some employees opted to quit their jobs or delay their job search once they received federal stimulus checks and other public aid.
He offered another example of a spouse in a two-income household deciding to stay home with their children instead of returning to work.
“If you look at the labor market nationally, you just see a plunge in payroll employment,” Snaith said. “Typically the labor market will lag the economy and economic activity by 12 or 18 months. When the economy starts to slip into a recession, businesses don’t immediately lay people off after the first bad quarter. They wait and see.”
He said getting a handle on inflation will need to be a priority in order to avoid the wage-price spiral that surfaced in the 1970s.
Snaith said, to date, cost of living adjustments are beginning to take shape to match inflation increases: “The feds are going to have to nip this in the bud, and I think they will.”