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?"
I predict that these jobs will eventually go to the “nose ring - pierced brow” crowd. I can imagine few things more repulsive and disgusting.
The retail company I work for has a really hard time hiring in quite a few cities/states these days—and we’re on the east coast & moving into the midwest.
When Bush was gov of Tx, he instituted a 2 year rule. (no more generational welfare recipients) You have 2 years to get training and find a job... because the bennies get cut off after that.
If I'm not mistaken...I think you can break up the 2yrs into small increments if needed....but if you take the whole 2 years in one chunk, you're done. With all the college programs out there that will pay for low-income or minorities.... I can't think of one excuse NOT to have something after 2 years.
More bull crap from the left and big business that want more illegal alien slave labor.
When I was young (100 years ago), I realized that I could not support a family on my salary. I was in the Army and salaries were really low.
Rather than putting my wife out to work, and letting the kids suffer, I took a 2nd job, minimum wage in the retail area equivalent to a “MCJOB”.
My logic was that not only was I making a few extra bucks, but since I was tied up 20 extra hours a week, I was not out spending money.
Now, do you suppose that the work ethic of the younger generation is so low that this logic is now flawed? Just asking, I have no idea...
....Bob
Agreed.
People on this thread keep talking about the free market that exists without illegals, but the market is not free as long as the government is paying people not to work. If businesses raise their pay to attract workers, who of course must come from other businesses, you'll end up with an artificially inflated pay scale (costs to business) because of government subsidies for those who don't wish to work.
If we as a society believe that we should embrace a little bit of socialism and create a safety net like welfare, that safety net needs to be cut off after a very short time. People will work when there's enough pressure to do so.
"You don't work, you don't eat" works. "You don't work, well, we'll pay you anyway" doesn't work.
If prices get too high in the legal market, a black market develops.
Think illegal immigrants working for cash in the underground economy.
Some jobs aren’t worth $12.00 dollars per hour yet still have a crying demand. That demand will be filled by the black market. Those immigrants will still be here, but they’ll be illegal. Which is exactly the situation we have today.
I’d rather these jobs be filled with legal immigrants who will become upstanding citizens and whose children will grow up to be doctors, and businessman, etc.
Same thing here. The place I used to go to for lunch raised its prices. They will charge $6.50 for a tiny salad. The other nearby sandwich shops also raised their prices. Now, Mrs. Still packs a lunch for me most days.
For dinner, we are lucky if it's only $40 with tax/tip.
I’ve gotta send this to some unemployed family members.
There is more than wages involved in a price increase eg:
materials (bread, meat, plastic wrappings, napkins
he has to pay a % of his profit to Wal Mart
Gasoline
__________________
His profit doesn’t increase if he has to pay higher wages, and neither do his materials (or only by a little - if his suppliers are paying higher wages too, still bread, meat, plastic and napkins are not labor-intensive).
There is just no way his costs went up by 45% on that sandwich (actually more, when you subtract his profit.)
Mrs VS
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.
Oh, and if instead you can translate Arabic, $175,000.
I felt sorry for the guy, but I told him in no uncertain terms that I was buying my last Subway, taking my business to another, better quality sub shop across the street.
BTW, I also wrote an e-mail to Subway international.
....Bob
Taking jobs from Americans huh? /s
You just keep that head in the sand, Hydro. The 'shock' will be yours, not mine.
“2 weeks ago a BMT was $6.50, last week the price went up to $9.50”
That my friend, is the definition of inflation. A sandwich is always worth a sandwich. But the value of dollars that you trade for the sandwich fluctuate.
Raise the price of the labor to make the sandwich and watch the value of the dollar drop.
And that is precisely why raising the minimum wage is a fool’s game. It does exactly nothing.
A + B = C. A is the price of labor. B is the value of a dollar. C is the cost of a sandwich.
A sandwich is always a sandwich (ie a constant) so if you raise A, B must do down.
BS. They won't take $12 @ hr. jobs because by the time they pay child-care, they're working virtually for nothing.
In Maryland we're seeing more and more seniors working behind the counters...or mopping floors.
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