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?"
Many people who scream let the market work only do so when it works their way. A tight labor market usually favors the employee not teh employer.
Supply and demand.
I’m in the west too.. and I am seeing this all around me. I’ve been trying to tell people for a long time, raise your wages.. But its a hard sell.. because for an entire generation we haven’t seen wage increases at the low end in this country. So managers and owners have had more success when they just always keep wages at rock bottom levels.
But this time it really is different I believe. You are seeing government workers retiring, and the young generation getting into those high compensation jobs. Even though not all are getting those jobs it reduces the supply.. and arguably for the first time in a generation the supply and demand side is moving away from employers towards employees.
Which is a good thing. Because when supply gets on their side, employees make more money. With more money they can buy more things. Including American made products that cost a little more but are better quality.
For those managers and business owners its going to be a hard change, competing with each other for employees. Its a paradigm shift.. and I expect a lot of business to fail in the shift. I’ve already heard of restaraunts shutting down, because they simply can’t find staff, and aren’t willing to go above minimum wage.
It's not that, John. It's, like Bush says-- We Americans just don't want to do any work that's...well...icky.
(Man, that George Bush--when it comes to enforcing America's immigration laws he's a piece o' work!)
(And his accomplices! Remember when this Chernoff character tried to sell us the snake oil that nobody can figure out how to build a fence on the Mexican Border south of San Diego?)
(Those guys are a hoot!)
(And we should give them the boot!)
It's not that, John. It's, like Bush says-- We Americans just don't want to do any work that's...well...icky.
(Man, that George Bush--when it comes to enforcing America's immigration laws he's a piece o' work!)
(And his accomplices! Remember when this Chernoff character tried to sell us the snake oil that nobody can figure out how to build a fence on the Mexican Border south of San Diego?)
(Those guys are a hoot!)
(And we should give them the boot!)
BINGO! I'd like to ask the "jobs Americans won't do" crowd if they would be willing to do their job for half as much. And if they say "no", then point out that they must give up their job to an illegal, as its a job that Americans won't do.
I’d be more than happy to relocate to Montana or Idaho than stay here in the liberal land of Illinoi$.
Anyone out there looking for an electronic production engineer with 27 years of experience in CEM/EMS? Oh yeah... my wife would be happy to move there as well... she does accounting. Then there’s my brother who also works in electronic manufacturing.
There's no way I'm buying the the Eastern European labor pool has been tapped dry. There are hundreds of thousands --if not more young people all across the former communist states who would jump at the chance for seasonal labor at resorts in the US. Not just for the travel and recreation, but they could return to their home country with enough money saved that they need not work until the next season.
I'm guessing the problem lies with the State Dept. and not a shortage of willing applicants.
I find it very hard to believe that there aren’t highschool or college students who need part time jobs that would turn down a $10 hour job at MCDONALDS!!!
“If no one will work for you for $10 an hour you might want to pay $11 or $12.”
I hear what you are saying...BUT... I went to a subway this week, ordered a BMT. 2 weeks ago a BMT was $6.50, last week the price went up to $9.50. Complained to owner. He said he had to raise wages to $10/hour, and pointed out that he wasn’t in business to lose money. BTW, this was a Subway in a Wal Mart. (in Utah)
.....Bob
Yeah, I think the answer is to cut the welfare programs and that’ll force the leeches out to take up those jobs whether they want ‘em or not.
Yes free markets lift all boats given time. Sometimes inequality is great like over the last decade, the rich got incredibly richer. Then it tends to go the other way, the ‘masses’ get lifted up, and inequality is low.
Our leaders seem to fight tooth and nail to stop the trickle down part of Reaganomics.
“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.
___________________
That’s terrible.
Mrs VS
Then you pay his price or not. The market works that way if he has to charge more then the market will bare then he will lose business and not need as many workers. Therefore lower his cost.
Unfortunately, by the time they reach the appropriate age, a lot of them have been ruined by the "culture" they've been raised in. No one wants to import trouble.
” He said he had to raise wages to $10/hour, and pointed out that he wasn’t in business to lose money “
Here’s a theorem for ya: “The purchasing power of entry-level wages is a constant”
I come to this by observation, and, being bone-lazy, I’ll leave it to others to prove, disprove, or ignore.......
I hate it when my idealism gets waylaid by reality.
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