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?’’