From higher wages to subsidized housing: the increasing cost of hiring youth

David Fettig | Managing Editor

Published June 1, 1989  | June 1989 issue

For Kerri Krogman of White River, S.D., the decision to join the staff of a Minneapolis-area amusement park this summer was one of simple supply and demand.

"There are no jobs at home except haying," the South Dakota State University (SDSU) student said. In Brookings, S.D., the home of SDSU, few job opportunities and the abundance of college-aged workers are keeping employment opportunities scarce, she said.

And for Kari Savre of Minot, N.D., it was a choice between summer classes at the University of North Dakota in Grand Forks or working at the same amusement park—Valleyfair.

Valleyfair won.

Going back to Minot wasn't really an option, Savre said. For the past few summers she has been a lifeguard in Minot, and opportunities for anything more than low-paying jobs are scarce in that north central North Dakota town, she said.

And, even though Krogman and Savre's wage—$4/hour—may seem modest when compared to some other service-related wages paid in the Minneapolis area, Valleyfair does offer other incentives. Qualified employees live in subsidized housing (initiated this year), take advantage of organized car pools, are guaranteed 48 hours per week, ride subsidized buses, have an opportunity to earn a wage bonus and get to live in a metropolitan area that offers more cultural diversions than their home towns. Plus, Valleyfair park gives ticket privileges to workers and holds special social events at the park throughout the summer just for employees.

In Krogman's and Savre's case, both consider their work more challenging than a typical summer job at a fast-food restaurant: Krogman is personnel clerk in the park's administration building and Savre is wardrobe clerk.

Shortage will only "get worse"

These two college students are representative of about 25 to 30 percent of Valleyfair's nearly 1,200 employees this summer—the park's highest percentage of out-of-state employees, according to Kevin Magyar, general services manager at Valleyfair.

As a summer employer of mostly young workers, Valleyfair amusement park—much like many other resort or tourist attractions in the Ninth District—is a good barometer of this country's changing demographics.

"There is a definite shortage," Magyar said about the supply of young workers. "And it's only going to get worse. A few years ago we didn't have to do anything. People used to come to us; now we go to them."

Valleyfair literally does "go to" the workers. Each year the park recruits from about 25 colleges and universities in Minnesota, Wisconsin, Iowa and North and South Dakota. Organized job fairs, advertisements in school newspapers and on-campus Valleyfair representatives are the ways in which the park tries to attract employees.

Those efforts are in addition to job fairs and hiring drives made in the Minneapolis/St. Paul metro area—an area that has proved frustrating in recent years. Magyar said the park is sometimes criticized for not hiring exclusively from neighboring Minneapolis suburbs—something he said he would love to do, if only the workers would come forward.

Janet Carlson, Valleyfair's personnel manager, said not all Twin Cities' young people choose to work, and if they do, they tend to be picky.

"We're battling attitudes as much as we are the shrinking labor pool," Carlson said about young people's perception of service-related employment.

Magyar agreed, and thinks a negative attitude toward service employment stems, in part, from the relative wealth of Twin Cities' families. Many students don't have to work to help support themselves, he said, and so they choose not to.

Hourly wage gets mixed reviews

Of course, one way to increase the number of applicants for particular jobs is to increase wages. But Magyar said a wage hike at Valleyfair isn't likely soon. The park chose to increase its rate from $3.65 to $4 during the middle of last year's season, Magyar said, and it did so following the completion of a wage survey.

Last year was also a season when Valleyfair only hired about 80 percent of its optimum work force of 1,200—the most employees needed during the busiest days. The year before, the park hired about 85 percent of its needed force, Magyar said, but this year he expects to get between 95 to 100 percent. It is crucial that the park have enough employees, he said, because service to customers is what brings people to the park.

And, with its $4/hour wage, the park believes it is now competitive within the job market, Magyar said, especially given the park's other benefits. He credits the housing subsidization plan as the key factor in the park's increased employment of out-of-state workers.

The park's hourly wage, however, gets mixed reviews within the five-state recruiting area. In some areas of southwest Minnesota, for example, students laugh at the rate, Magyar said, and in Vermillion, S.D., home of the University of South Dakota, they think the pay is "fantastic."

Also, Magyar said Duluth has been a fertile recruiting ground for employees this summer. "People tell me: 'All I can do up here (Duluth) is wash dishes for minimum wage.'"

One labor market area currently touted as an answer to the dwindling supply of young workers—retirees or older adults—has been mostly disappointing for Valleyfair, according to Magyar.

"The senior citizens market is really overblown," Magyar said. He said he has attended job fairs for older workers, including one in the Twin Cities' area this spring, and he has found that many older adults either don't need to work or they don't want to. He said representatives from other area industries, including fast food restaurants, have had similarly frustrating experiences in their attempts to hire older adults.

And Magyar said he doesn't have any false expectations about the older adult labor market. After all, he said, after working all their lives, they should not be expected to come to the rescue of a dwindling labor supply.

Market will continue to tighten

Even though Valleyfair raised its wages by 35 cents last year and began subsidizing housing this year, Magyar and Carlson know they will have their work cut out for them in the future, as they continue to woo young workers.

"We're trying to be as creative and inventive as possible with our marketing," Carlson said. And that creativity isn't cheap—Valleyfair tripled its personnel advertising budget for this season; and for good reason, it seems. By 1990 Minnesota will have experienced a reduction of about 200,000 in the number of workers aged 15 to 24—about 25 percent—since 1980. That percentage is consistent with the other states in the Ninth District.

After the lessons of the past few years when it has struggled to meet its employment needs, Valleyfair doesn't intend on falling short as the labor markets tighten even further, Magyar said. Likewise, it will continue to recruit students like Kerri Krogman and Kari Savre, and its package of benefits and subsidies may also expand.

"A few years from now—what will we do? That's what we're looking at right now," Magyar said.