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Help Wanted: Employers in West Can't Find Enough Workers
Sunday, August 26, 2007
HELENA, Mont. - The owner of a fast food joint in Montana's booming oil
patch found himself outsourcing the drive-thru window to a Texas
telemarketing firm, not because it's cheaper but because he can't find
workers.
Record low unemployment across parts of the West has created tough working
conditions for business owners, who in places are being forced to boost
wages or be creative to fill their jobs.
John Francis, who owns the McDonald's in Sidney, Mont., said he tried
advertising in the local newspaper and even offered up to $10 an hour to
compete with higher-paying oil field jobs. Yet the only calls were from
other business owners upset they would have to raise wages, too. Of course,
Francis' current employees also wanted a pay hike.
"I don't know what the answer is," Francis said. "There's just nobody around
that wants to work."
Unemployment rates have been as low as 2 percent this year in places like
Montana, and nearly as low in neighboring states. Economists cite such
factors as an aging work force and booming tourism economies for the tight
labor market.
For places like Montana, it has been a steady climb in the nearly two
decades since the timber and mining industry recession. The state approached
double-digit unemployment levels in the 1980s and began the slow crawl back
in the early 1990s.
"This is actually the biggest economic story of our time, and we don't quite
grasp it because it is 15 years in the making," said economist Larry
Swanson, director of the O'Connor Center for the Rocky Mountain West at the
University of Montana.
The U.S. Department of Labor reports the mountain West region - covering
eight states along the Rocky Mountains - has the lowest overall unemployment
rate in the nation. The region hit an all-time low of 3.4 percent in May.
The effects are everywhere. Logging equipment in Idaho sits idle as
companies have a tough time finding workers. A shortage of lifeguards has
forced Helena to shorten hours at children-only pools. A local paper in
Jackson, Wyo., has page after page of help wanted ads.
In Jackson Hole, the Four Seasons Resort still had openings in late July.
The problem has created longer hours and tougher working conditions for
current employees.
For years, the resort has imported dozens of workers from Eastern Europe who
often come as much for the summer recreation opportunity as the money. This
year, however, that wasn't enough and so for the first time the resort also
sent recruiters to a high school job fair, said spokeswoman Greer Terry. It
only helped a little.
"It's been a struggle finding employees this summer," Terry said.
Economists say there are a number of reasons why parts of the West are
feeling the labor pinch.
Established baby boomers, including retirees, have been moving into Montana
for the mountain views and recreation, bringing with them money for new
homes that fuel construction job growth, said Swanson.
Along the way, younger people have moved away searching for bigger paychecks
as the state's wages still lag behind other areas and are slowly increasing
overall. Now, the aging work force is unable to expand to meet the demands
of the job market, Swanson said.
He said the problem is compounded by the fact that employers, accustomed to
paying relatively low wages, have been slow to increase salaries. Montana
wages have historically been among the lowest in the country, and still rank
near the bottom. The silver lining for workers is that wages are now growing
at the third-fastest rate among U.S. states.
Now, workers with more options in some places are unwilling to take
$12-an-hour jobs.
The problem could get worse as more baby boomers retire, Swanson said. By
2030, Montana and Wyoming are predicted to have among the oldest populations
in the U.S, with about 26 percent of residents 65 and older, Swanson said.
That compares to 19.7 percent predicted nationally.
"We thought the labor force crunch wouldn't come until 2012, but it's
already arrived in a lot of these fast-growth areas," Swanson said. As a
result, "you'll find older workers working longer, people will sort of
linger in the work force. The employers will make it worth their time to."
Swanson added the phenomenon of quasi-retirement with older workers cutting
back on hours but still heading to the office will grow, while international
workers will be drawn to the region. Younger workers who used to leave will
find it worth their while to stay.
"The squeeze is on. You get into these 2 percent and less unemployment rates
and you're moving into a seller's market with the seller being the worker,"
Swanson said.
Officials worry the razor thin labor market could bind economic growth,
although there has been no indication of that yet.
"One of the reasons we are seeing the lower (unemployment) rates is we are
starting to see more investment in our economy. It's like finding an
undervalued stock," said Tyler Turner, Montana's economic development chief.
In Helena, the pool of applicants has been shrinking even for jobs on the
police force. For professional jobs, such as department managers, the city
is considering hiring slightly underqualified people that can be trained on
the job.
"This is the tightest market I have ever seen," said Salty Payne, who has
worked in the Helena City human resource office for 15 years.
Payne in part blames the area's building boom, which is drawing workers to
construction trades that are offering higher salaries.
Montana state lawmaker Art Noonan lives in the mining town of Butte - the
epicenter of a big mining bust 20 years ago. Now, more people are moving in
to build second homes and high paying jobs are coming back as copper prices
go up.
"All of these things are sort of clicking at the same time," Noonan said.
"The only economic development we used to get was the creation of more
economic development offices."
In Utah - where unemployment rates have been hovering around 2.5 percent -
amusement parks, trucking companies, telemarketing firms and others have
been paying bonuses of hundreds of dollars or more to find workers.
"It boils down to the attractiveness of the (interior) West," said Mark
Knold, chief economist at the Utah Department of Workforce Services. "It is
a population magnet."
And workers have benefited. Utah workers saw a 5.4 percent average wage
increase in 2006, Knold said.
But questions remain about how long the West can weather the problems that
come with low unemployment.
"The hardest thing is to keep the economy growing at a strong rate when you
have a low unemployment rate," he said. "Take a company that wants to
expand. Where is the next worker going to come from?"
Help Wanted: Employers in West Can't Find Enough Workers
Sunday, August 26, 2007
HELENA, Mont. - The owner of a fast food joint in Montana's booming oil
patch found himself outsourcing the drive-thru window to a Texas
telemarketing firm, not because it's cheaper but because he can't find
workers.
Record low unemployment across parts of the West has created tough working
conditions for business owners, who in places are being forced to boost
wages or be creative to fill their jobs.
John Francis, who owns the McDonald's in Sidney, Mont., said he tried
advertising in the local newspaper and even offered up to $10 an hour to
compete with higher-paying oil field jobs. Yet the only calls were from
other business owners upset they would have to raise wages, too. Of course,
Francis' current employees also wanted a pay hike.
"I don't know what the answer is," Francis said. "There's just nobody around
that wants to work."
Unemployment rates have been as low as 2 percent this year in places like
Montana, and nearly as low in neighboring states. Economists cite such
factors as an aging work force and booming tourism economies for the tight
labor market.
For places like Montana, it has been a steady climb in the nearly two
decades since the timber and mining industry recession. The state approached
double-digit unemployment levels in the 1980s and began the slow crawl back
in the early 1990s.
"This is actually the biggest economic story of our time, and we don't quite
grasp it because it is 15 years in the making," said economist Larry
Swanson, director of the O'Connor Center for the Rocky Mountain West at the
University of Montana.
The U.S. Department of Labor reports the mountain West region - covering
eight states along the Rocky Mountains - has the lowest overall unemployment
rate in the nation. The region hit an all-time low of 3.4 percent in May.
The effects are everywhere. Logging equipment in Idaho sits idle as
companies have a tough time finding workers. A shortage of lifeguards has
forced Helena to shorten hours at children-only pools. A local paper in
Jackson, Wyo., has page after page of help wanted ads.
In Jackson Hole, the Four Seasons Resort still had openings in late July.
The problem has created longer hours and tougher working conditions for
current employees.
For years, the resort has imported dozens of workers from Eastern Europe who
often come as much for the summer recreation opportunity as the money. This
year, however, that wasn't enough and so for the first time the resort also
sent recruiters to a high school job fair, said spokeswoman Greer Terry. It
only helped a little.
"It's been a struggle finding employees this summer," Terry said.
Economists say there are a number of reasons why parts of the West are
feeling the labor pinch.
Established baby boomers, including retirees, have been moving into Montana
for the mountain views and recreation, bringing with them money for new
homes that fuel construction job growth, said Swanson.
Along the way, younger people have moved away searching for bigger paychecks
as the state's wages still lag behind other areas and are slowly increasing
overall. Now, the aging work force is unable to expand to meet the demands
of the job market, Swanson said.
He said the problem is compounded by the fact that employers, accustomed to
paying relatively low wages, have been slow to increase salaries. Montana
wages have historically been among the lowest in the country, and still rank
near the bottom. The silver lining for workers is that wages are now growing
at the third-fastest rate among U.S. states.
Now, workers with more options in some places are unwilling to take
$12-an-hour jobs.
The problem could get worse as more baby boomers retire, Swanson said. By
2030, Montana and Wyoming are predicted to have among the oldest populations
in the U.S, with about 26 percent of residents 65 and older, Swanson said.
That compares to 19.7 percent predicted nationally.
"We thought the labor force crunch wouldn't come until 2012, but it's
already arrived in a lot of these fast-growth areas," Swanson said. As a
result, "you'll find older workers working longer, people will sort of
linger in the work force. The employers will make it worth their time to."
Swanson added the phenomenon of quasi-retirement with older workers cutting
back on hours but still heading to the office will grow, while international
workers will be drawn to the region. Younger workers who used to leave will
find it worth their while to stay.
"The squeeze is on. You get into these 2 percent and less unemployment rates
and you're moving into a seller's market with the seller being the worker,"
Swanson said.
Officials worry the razor thin labor market could bind economic growth,
although there has been no indication of that yet.
"One of the reasons we are seeing the lower (unemployment) rates is we are
starting to see more investment in our economy. It's like finding an
undervalued stock," said Tyler Turner, Montana's economic development chief.
In Helena, the pool of applicants has been shrinking even for jobs on the
police force. For professional jobs, such as department managers, the city
is considering hiring slightly underqualified people that can be trained on
the job.
"This is the tightest market I have ever seen," said Salty Payne, who has
worked in the Helena City human resource office for 15 years.
Payne in part blames the area's building boom, which is drawing workers to
construction trades that are offering higher salaries.
Montana state lawmaker Art Noonan lives in the mining town of Butte - the
epicenter of a big mining bust 20 years ago. Now, more people are moving in
to build second homes and high paying jobs are coming back as copper prices
go up.
"All of these things are sort of clicking at the same time," Noonan said.
"The only economic development we used to get was the creation of more
economic development offices."
In Utah - where unemployment rates have been hovering around 2.5 percent -
amusement parks, trucking companies, telemarketing firms and others have
been paying bonuses of hundreds of dollars or more to find workers.
"It boils down to the attractiveness of the (interior) West," said Mark
Knold, chief economist at the Utah Department of Workforce Services. "It is
a population magnet."
And workers have benefited. Utah workers saw a 5.4 percent average wage
increase in 2006, Knold said.
But questions remain about how long the West can weather the problems that
come with low unemployment.
"The hardest thing is to keep the economy growing at a strong rate when you
have a low unemployment rate," he said. "Take a company that wants to
expand. Where is the next worker going to come from?"
