fedgazette

Metro Outlook '98

Ninth District metro areas share concerns over tight workforce, downtown viability and other issues

David Fettig - Editor

Published January 1, 1998  |  January 1998 issue

Labor availability tops list for most district metro areas

When job applicants walk into the Town and Country Inn in Rapid City, S.D., the potential new hires are immediately given the caramel candy test, according to owner Gary Brown. "If they unwrap it before they eat it, we hire them," he says with a laugh.

Duane Benson of the Minnesota Business Partnership in Minneapolis tells of an employer that has to help read the job applications to potential employees. Also, a large retailer has begun hiring its holiday crew in August to ensure adequate staffing by the end of the year, and one restaurant has hung a sign announcing that because of labor shortages it can no longer guarantee a 15-minute lunch.

And in Sioux Falls, S.D., a city familiar with labor availability issues and which has advertised nationally for workers, the situation has recently grown more severe. "We've complained about it before, but now it's an acute shortage," says Dan Scott, president of the Sioux Falls Development Foundation. If full employment for Sioux Falls occurs at a 3 percent unemployment rate, he says, then the city—with a 1.4 percent rate in October—is stretched too thin. According to the numbers, Scott says: "We've already got about one-and-a-half percent that shouldn't be working in the first place."

Similar anecdotes and sentiments echo throughout the Ninth District's other metropolitan statistical areas (MSAs). An informal survey of city officials in the district's 13 MSAs—plus Marquette in the Upper Peninsula of Michigan—put workforce issues at the top of nearly every respondent's list of concerns for 1998. [Unemployment rates for the district's MSAs]

For some district MSAs, like those on the extreme western and eastern edges of the district, workforce availability issues are a recent phenomenon, but for many other cities the labor question has been a common refrain in recent years. As Gary Smith, executive vice president of the Rochester Area Economic Development Association, puts it: "We're not unique. Minnesota's not unique. The Midwest is not unique. It's happening all over."

What to do?

And the ways that communities have been dealing with the issue of labor availability are also similar: training programs, dependence on population growth, job fairs and working with local colleges and technical schools to meet the needs for specialized labor. The skills needed aren't just for high-tech jobs associated with computers, communications or specialized manufacturing, but such jobs as electrician, plumber and auto technician, says Tracy Grindberg, vice president of the Fargo-Cass County Economic Development Corp.

One Fargo, N.D., auto dealership has begun a program that employs up to 10 high school students for two hours a day in the auto repair shop; if the students are interested in the work, the dealership will help fund a two-year degree if the student agrees to work at the dealership upon graduation. "We have to change the attitudes about the absolute necessity of a four-year degree," Grindberg says. "Today's auto technician can earn forty to fifty thousand in a few years."

This view is shared by Tim Ryan of the High Plains Development Authority in Great Falls, Mont., a city that is beginning to feel the pinch from a lack of skilled labor. "We're trying to encourage schools not to discourage kids from the trades," he says.

In the past, when companies were looking to expand or open new shops, they first looked at such issues as transportation and infrastructure, says Russell Staiger, president of the Bismarck-Mandan, N.D., Development Association, now it's the workforce. What is important to convey to those companies is that the low unemployment rate is not necessarily a true picture of the labor situation, Staiger says. "We have a tremendous workforce that's underemployed." He says the local workforce is well educated, easy to train and ready to fill more demanding jobs. "This is a revelation for some companies," he says.

St. Cloud, Minn., had a revelation of its own when it held a job fair in October, according to David O'Gorman, development coordinator for the St. Cloud Area Economic Development Partnership. More than 1,700 attended the job fair, twice as many as expected, and the job fair wasn't even advertised, says O'Gorman. And that only reinforces the point, O'Gorman says: Unemployment rates may be low, but people are still looking for better jobs.

Some cities, like La Crosse, Wis., will continue to depend on population growth to meet labor demand. "We're still seeing an influx of about 1,000 people a year and that amount of job growth," says Tim Tracy, president of the Greater La Crosse Area Chamber of Commerce. "We're still filling those gaps."

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