According to business leaders, labor shortages are a growing threat to the Massachusetts economy

The head of a leading Massachusetts business association says he’s growing concerned about the economic impact of growing labor shortages across the state.

During an annual address on Tuesday, John Regan, president and CEO of Associated Industries of Massachusetts, noted that the Commonwealth has lost tens of thousands of workers to other states in recent years. Massachusetts’ birth rate has also fallen in recent decades, and baby boomers are retiring faster than previous estimates suggested.

All of this combined makes it increasingly difficult for employers to fill vacancies and meet production targets.

“The workforce challenges looming over the Massachusetts economy are grim,” said Regan. “The long-held belief that Massachusetts’ talent base would always anchor our economy is crumbling, and the concentration of high-skill jobs that have tied our high-skill workforce to Massachusetts is beginning to crumble.”

Regan said his conclusion drew from predictions about the Massachusetts economy and workforce. The state currently has 115,000 more job openings than unemployed, he said. By 2030, jobs across Massachusetts are expected to increase 21%, according to the State Department of Economic Research, but the workforce will only increase by 1.5%.

To alleviate the labor shortage, Regan said state leaders must do more to make Massachusetts attractive to workers. From 2020 to 2021, U.S. Census data shows the Commonwealth’s population declined by more than 40,000 residents, part of a pattern in the Northeast. Regan attributed this to residents moving to other states with warmer climates and lower costs of living.

He suggested that Commonwealth leaders make Massachusetts more competitive with other states by incentivizing construction of more homes to drive down rents. And noting that 10 other states had lowered their income tax rates over the past year, he said Massachusetts should do the same. The current state tax rate is a flat 5% for all individual taxpayers and an additional 4% for income over $1 million.

Regan also advocated longer parental leave, an expansion of federal work visas for immigrants, and more job and apprenticeship programs to help workers develop the skills they need for specific careers.

“We support Gov. Healey’s MassReconnect initiative, which would fund community college certifications and degrees for residents of the state who are 25 years of age and older who have not earned a college degree,” added Regan. “We believe Massachusetts will only thrive with a commitment to inclusive economic growth that brings as many people as possible into the workforce and leaves no one behind.”

Following the address, several business leaders in Massachusetts shared their experiences of the growing labor shortage.

Erin Birmingham, director of talent acquisition at pharmaceutical company Takeda, said the company currently has 500 open positions in the Massachusetts area. One way Birmingham is trying to fill vacancies is by hiring students from Middlesex Community College to work as contractors. Once they graduate from school, it will be easier for them to transition into full-time employment at Takeda.

Annemarie Abdo, vice president of human resources at Ayer-based Catania Oils, added that the cooking oil company is offering increased bonuses to employees who refer people to vacancies. The manufacturer has also started offering employees more benefits, such as: B. offers free transport to and from work and launches advertising campaigns to attract new employees.

“So it’s really not a method [to attract more workers]. We’re just exploring all the different methods we could possibly use and we’ve been really creative,” Abdo said.