Posted on 08/25/2007 5:30:31 AM PDT by Hydroshock
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.
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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?"
MOC = mean old ole conservative
Let's hear it for the MOC's!
VERY, VERY, VERY few people on welfare would starve to death if their welfare programs were cut off.
The WOULD be pissed as hell that their handout was cut off and they would work but they would be so pissed.
I speak of this because I have seen and heard it.
Harhar, it WARMED, I say, WARMED the cockles of mah heart to hear/see it. (Foghorn Leghorn)
“doesn’t make it economically, morally, or legally correct”
That’s why it’s called a ‘black market’
It IS immoral and it IS illegal and it IS economically correct.
Don’t confuse economics with morality.
Incidentally, when I look at Craigslist for Wyoming, scads of wonderful positions are not the first impression. Lousy entry level, cold calling, work at home data entry, scams, and a few mid range positions offering under 50K for a perfectly tailored candidate in an obscure field - that's what I see.
Entry level jobs...how horrible. Lol.
Good jobs, really good jobs, are USUALLY not gotten with what you know but with WHOM you know. You know that.
Oh, and if instead you can translate Arabic, $175,000.
Right skills = right money.
- Sixty-seventy years ago you could have substituted JAPANESE, GERMAN and ITALIAN for Arabic and would have had the "right skills."
- Twenty-forty years ago you could have substituted CHINESE or RUSSIAN for Arabic and would have had the "right skills."
I wonder what language will constitute the "right skills" 20 years from now.
“People who can’t conduct their business in a legal manner need to be put out of business.”
I think you have missed my point. I don’t want the illegals here at all.
But we need more workers. I want me (and the other 300 millions citizens like me) to decide who gets to come here.
If we do nothing we will have a black market (which we already have) or we will have inflation. I don’t want either.
And I for one am very proud of the immigrant history of the United States and believe it is our immigrant past that has made us the strongest country in the world.
You are correct, I got laid off Friday, actually retired more money in getting laid off first. Two of the guys that worked for me are getting laid off, they can collect their severance, in September, they have jobs. These are big buck jobs, 100k plus, if you have talent and a record of success the work is there.
No, they aren’t. Wages are generally 10-20% at most at a place like that.
That's easy. Just hire an illegal aliein that rapes little girls.
I don`t know what $10 an hour is worth there, but here in New York you can literally make more collecting cans off the street. I know a bum who does that, says he takes in $100 a day.
At first I didn`t believe him, then I saw he goes through the recycling bags that are put out on the street...To make $100 you need 2000 cans so I figured in about a few hours he can go through 10 or so bags, then he throws them in a shopping cart, ties bags filled with cans to the shopping cart, then wheels it all down to the redemption center and that`s that.
Putting them in those machines though must be a bitch...They put them in and get a voucher which they then take to the cashier who pays him tax free cash. But I still think it would take less than 8 hours total.
$10 bucks an hour is insane. That`s about $50 after taxes AND you have to put up with a-holes all day. Who the hell would want that? You could probably make more literally begging in the street.
Builders who got stuck during the last oil boom are only building high-end housing, where they are making as much as they would on several low cost units. So the price is staying up.
Wages have gone up, but for mow, so has the cost of living.
Yes, cutting out the damn taxes they take out of a paycheck would help tremendously. Even if you don’t pay income taxes, you get hit with all that FICA crap.
Here, you can do that for about six hundred a month, heat paid.
Ten bucks an hour goes farther out here.
Of forget it, I live in New York city, Queens to be exact, and right now you literally have to be a millionaire to even RENT! A three bedroom, and I`m talking about every borough here in NYC not just Manhattan, you can expect to pay at LEAST $5000 a month. $7000 is more like it.
The cost of real estate is so insane here right now, the only people of middle class who are still living here are the ones who have been living here a long time in a rent controlled situation or a mortgage they got 20 years ago.
Me, I moved in my place about 18 years ago for $400 a month. Now I am paying about $1000 (my landlord raises it with every lease renewal but only a set amount required by law which is considered rent controlled)...Last year I was thinking of moving because the building is so old, built in the 1930`s and everything keeps breaking...Until I saw what they want now in the same neighborhood. Two bedroom apt starts at at least $2500 a month, one bedroom about $1500!!!!
I figure a few more years and then I`m getting the hell out of here. Every single person I have ever known while growing up is all gone, moved out, except for my parents. All that remains are illegals who share 20 to a room and out of state millionaire trust fund kids. The rest who move here are completely insane. They move in, then a year later they move out through eviction. The apartment below me has gone through 5 different tenents in the past 3 years alone! And no wonder, who the hell can take or afford to pay $2500 a month for an apartment that`s 80 years old? It`s a total joke here.
I don't know about Ohio and South Carolina, but I know that one reason that some manufacturing doesn't look to kindly on Michigan is the Union domination...
That economist that many admire comments on how rent control puts the cost of living in NYC through the roof. Interesting to ponder whether better government poolicies would lower the cost of living there.
A relative owned a lighting store back in the 70's. They paid I think it was 4.50$ an hour back then. And his son rented an apartment near a university when he went to college. That apartment cost 140$ a month. Nowadays the big box retailer pays maybe 10 dollars an hour..and the same apartment.. still being rented out goes for over 1000$ a month. So 34 hours work.. to over 100 hours work for the same apartment!
I don't blame the people at the bottom from being bummed out, and not giving a damn about their jobs.
That sounds like the overcapacity I've been talking about on the credit threads. Consolidation for more productivity is one way to more efficiently use labor in the face of higher labor costs. Rising productivity is how we increase wealth!
I do not agree with claims that money doesn't go as far as it used to. Here's why. I am living on a modest social security income. Last year, I wanted to upgrade my housing and I analysed and looked at it from every angle, because I didn't want to stress myself and be house poor. As I studied my budget I realized that it was about the same as it had been in 1980 when I was a college professor. Same gross. Similar house payment. The biggest difference is that I am not now also supporting 2 children.
I have everything I need and discretionary income, too. I feel blessed. A lot of people bitch and moan about macroeconomics when what they need is to learn to manage their wants and their money better, imho.
Great point and example, even if they make 10 sandwiches an hour per employee.. and they get a 2 dollar an hour wage increase.. that is 20 cents extra a sandwich. Even if he pays them an extra 5 dollars an hour.. that is 50 cents extra a sandwich.
Not that I blame the manager for increasing price.. he should raise the price to maximize profit.. but I think he is mistaken that its mainly his employee costs causing the rise in price.
I've tried to point out to people on many different businesses that even quite significant wage increases, like doubling have a small impact on prices. Yet with more wages then those people at the bottom.. or the left hand of the bell curve so to speak, can go out and buy more things for themselves. And that helps even people at the high end.
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