Delaware's economy better than last year but obstacles remain

By Matt Bittle
Posted 6/20/21

DOVER — Delaware’s unemployment rate has declined precipitously from the record-setting mark of one year ago, but it remains slightly worse than the nation as a whole and a few points …

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Delaware's economy better than last year but obstacles remain

Posted

DOVER — Delaware’s unemployment rate has declined precipitously from the record-setting mark of one year ago, but it remains slightly worse than the nation as a whole and a few points behind the pre-coronavirus figure.

According to data released Friday by the Delaware Department of Labor, 5.9% of the Delaware workforce was not employed in May. Nationally, the figure was 5.8%.

It’s been a very up-and-down 15 months for the First State, with the jobless rate varying from 4.8% in March 2020 to 13.4% just a month later. Six months after that nadir, the rate had fallen by more than half.

Since then, however, it has fluctuated between 5.8% and 6.5%.

Back in business?

In some ways, the economic recovery has gone better than predicted last year during the early days of the pandemic. But at the same time, it is clear businesses are still trying to get back on their feet.

Demand for workers is high, with many places in Delaware setting the starting pay at well above the minimum wage of $9.25 an hour. Some are even offering around $15, the amount Delaware will begin phasing in after the General Assembly gave the final approval to legislation Thursday.

Under the measure, which the governor is expected to sign, the wage will rise on Jan. 1 of the next four years, to $10.50 in 2022, $11.75 in 2023, $13.25 in 2024 and $15 in 2025.

According to the Associated Press, there are 7.6 million fewer jobs than before the pandemic hit the nation — a sign of the struggles to find employees.

After more than a year, Delaware recently restarted its work search requirement for those receiving unemployment benefits. As of earlier this month, there were about 16,400 resumes and 11,000 jobs posted on the state’s portal to connect individuals to employment, according to Secretary of Labor Karryl Hubbard. In late April, in contrast, there were 4,000 people seeking work there, compared to 12,000 jobs.

“It is clear though that Delawareans are ready to return to work,” Ms. Hubbard said. She made the remark during a June 8 virtual forum hosted by the Delaware State Chamber of Commerce that featured a discussion of how businesses are responding as the threat of COVID abates and the world takes more steps toward normalcy.

Gov. John Carney announced last week the state of emergency, which has been in place for the past 15 months, will end July 13. Exactly what impact that will have remains to be seen, as many restrictions, such as the mask mandate, had already been lifted.

Still, it can’t hurt businesses and nonprofits seeking to rebound from an unprecedented situation.

“Delaware’s economy is still recovering from the effects of the pandemic, and there’s more work to do,” Jonathan Starkey, a spokesman for Gov. Carney, said Friday. “But we’ve added more than 45,000 jobs since the depth of the crisis last spring. With vaccination rates increasing every day, we expect Delaware will have a great summer and come out of this pandemic stronger than ever.”

On the job

With demand for workers so high, employers cannot afford to simply shift back to how things were pre-pandemic, Kurt Foreman, president and CEO of the Delaware Prosperity Partnership, said during the State Chamber of Commerce event this month. Employees want flexibility to work from home at least part of the week, he said, urging businesses to be proactive.

Companies should take more steps to train their workforce, helping them develop skills that benefit both sides, Mr. Foreman said. He also stressed the importance of building relationships, noting employers are competing for talent not just against other entities in the state or even the region but sometimes across the globe.

“Some people have called it the war for talent ... but it may already be that we’re back to where we were pre-pandemic in the demand side,” he said. “Unfortunately, supply side is not in the same situation.”

Both he and Ms. Hubbard touted job-training programs like Forward Delaware, which was launched specifically to help industries hit the hardest by COVID-19.

There are currently about 2,400 people in the Forward Delaware initiative, according to the secretary of labor, who also mentioned a separate pilot program with a similar focus.

Programs to help people learn valuable new skills can benefit Delawareans of all ages, from the young adult who lost his or her first job due to coronavirus to the retirement-age individual looking to make some extra money to live more comfortably.

The Prosperity Partnership, a public-private partnership that seeks to attract businesses here and help them thrive, has been surprisingly busy, Mr. Foreman told the virtual audience. The fields of science and technology and manufacturing and logistics in particular are operating near peak capacity, while health care, construction and hospitality are also on the uptick, he said.

Hospitality hurt

The hospitality industry was impacted perhaps more than any other by the pandemic, as people stayed home instead of going out to restaurants, bars, hotels and entertainment venues.

Nationally, per an analysis from the Economic Policy Institute, the self-described “premier think tank focusing on the economic condition of low- and middle-income Americans and their families,” employment levels in the accommodations and food services sector were still more than 15% lower compared to pre-COVID.

According to Carrie Leishman, president and CEO of the Delaware Restaurant Association, about 52,000 Delawareans worked in restaurants in February 2020, the last full month before COVID-19 hit the state. Today, that number is around 44,000.

Many of the missing 8,000 or so jobs can be attributed to inability to fill the positions. In particular, many women are unable to return to work for various reasons, such as inability to find child care, Ms. Leishman said.

“The pandemic robbed restaurants of their greatest asset. It was their labor,” she explained.

Restaurants are certainly in a much better situation than this time last year, but COVID-19 came at a very bad time, Ms. Leishman said. The outbreak forced parties and similar events for graduations, Mother’s Day, Father’s Day, St. Patrick’s Day and Easter to be canceled entirely or at least scaled back significantly.

The beach community, which generates the majority of its revenue from the spring and summer months, suffered due to fewer people taking vacations or even day trips to the area in 2020.

Ms. Leishman said she believes the state should offer additional assistance, such as bonuses for people who return to work in some fields, to help businesses bounce back.

“Restaurants have been the single most negatively affected industry in the state,” she said.

Though sales are certainly trending upward, that can be misleading. Food and drink establishments struggle to keep up with the demand, and many have more limited hours or menus because they are short-staffed, preventing them from seeing the volume of sales needed to fully recover, Ms. Leishman said.

Like many others in the business community, Ms. Leishman is not a fan of the $15 minimum wage, believing it will have a strong negative impact on an already-faltering sector.

Several lawmakers made similar points during the House debate Thursday.

“There is not a business out there that did not suffer through this,” said Rep. Shannon Morris, a Republican from the Camden-Wyoming area, describing the bill as kicking employers while they’re already down.

At the same time, the legislature has taken some steps to help, Ms. Leishman said, pointing to expanded outdoor dining and to-go alcohol sales.

The next 12 to 24 months are critically important in determining how the industry fares, she said, urging residents to support their local establishments.

It may feel like Delawareans have been waiting an eternity, but at long last, there does seem to be light at the end of the tunnel.

“After 15 long months, we are almost through this thing,” Senate President Pro Tempore Dave Sokola, a Newark Democrat, said during the chamber event.