Signs point to workforce recovery, but long-term issues could persist
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December marks two years since news of COVID-19 started to rumble global headlines, and in those 24 months people, businesses, and governments have seen more change than entire decades of the past.
As businesses, families, and state leaders look forward into 2022, sometimes weary of words like “pivot” and “unprecedented” that have dominated the tenor of the past two years, more concrete data has emerged on the workforce situation to help shape policies and practices for a successful way forward.
When the Valley Journal spoke with state labor officials and local business owners in June, a clear pattern emerged: business owners were having to close and reduce services due to a labor shortage. Potential workers were also having issues obtaining housing, which, with skyrocketing prices, was out of whack with the $12 per hour wage that was the average offer of Lake County employers. Add in the cost of childcare, averaging $7,900 per year, expenses were just too much for many parents to justify working instead of staying home.
New data from a November presentation by the Montana Department of Labor reiterates many of these points, but the presentation and other data also point to improving conditions in some areas. The report notes that results from a Household Pulse Survey in September by the U.S. Census Bureau found that 10,185 people were staying home due to caring for someone because of the virus or concerns for the virus, 16,673 were staying home with an elderly person or child, and around 20,362 were staying home because they didn’t want to be employed. All these numbers were higher than pre-pandemic levels.
Even with these higher numbers of people declining employment, there’s strong evidence people are working. The U.S. jobless claims plunged last week to the lowest level in 52 years, according to the Department of Labor. In Lake County, the most recent unemployment numbers available are from October, when the unemployment rate was 2.2 percent. In the last week of November, the Montana Department of Labor and Industry noted that just under 300 job openings were posted for Lake County businesses.
In addition to the pandemic, there’s another issue at play, according to the Department of Labor and Industry’s public information officer Jessica Nelson.
“Worker shortages are both a long-term issue and a short-term issue,” Nelson said. “Fundamentally, Montana’s tight labor markets are due to an aging workforce with more retirements than new workers entering the market. The aging demographics have been affecting our state’s workforce for over 10 years and are likely to continue until the majority of the baby boomer population has retired (which should be around 2024). This means that Montana’s labor markets are likely to continue to be tight for the next several years.”
In order to combat these issues, the governor’s office has announced many initiatives to get workers into positions in the past several months. For instance, the state is offering a $12,500 reimbursement for moving expenses for healthcare workers to relocate for Montana and stay a year. As a part of that program, 35% of the total reimbursement amount can be used to offset expected payroll tax deductions. The governor’s office has also allocated $42M in COVID-19 relief funds to expand childcare access in the state.
While data on the efficacy of those programs will take a while to roll in, there appear to be some good signs on the horizon. According to a November presentation by the Department of Labor, wages across Montana are increasing. The state’s data points to wage increases of 15% from 2019 to 2021. Even with a 39-year record high national inflation rate of 6.2%, that puts Montana workers slightly ahead.
Steve Clairmont of Mission West Community Development Partners is upbeat about the local economy’s outlook.
“Our entrepreneurs here in Lake County tend to be a lot more savvy than folks nationally,” Clairmont said. “...During the pandemic, many of our businesses pivoted, and found ways to generate revenue.”
Of 72 restaurants Clairmont surveyed in Lake, Sanders, and Mineral Counties, the majority came out about even or slightly in the black for last year, Clairmont said, thanks to federal programs that aimed to keep the economy afloat during the pandemic. While high housing costs have posed challenges for some businesses, particularly seasonal ones, Clairmont says he doesn’t know of anyone who has retired because of the pandemic.
There has been some increased interest in entrepreneurship, but that is to be expected in an economic downturn, Clairmont said.
“That’s a pretty steady trend that’s been going on for decades,” Clairmont said.
Although data might show an improving economy, a job seeker with local ties points to some irregularities she’s seen on the job hunt that still show signs of a lopsided economy.
Cheryl Cross, 67, is part of that baby boomer group that is coming upon retirement age. Cross lived in Polson until 2016, but now resides in Missoula.
She’s semi-retired, with a job as a coffee saleswoman that’s been slow since the pandemic started.
“I’m bored silly,” Cross said. “It’s not like I need the money. I’m financially fine. I’m just bored.”
Cross said that with more than 17 years employment history at Nabisco and 14 years with the coffee company she thought landing an entry-level job would be easy. She’s owned a restaurant before, so handing burgers out a drive-thru seemed to be a simple fit.
“It’s kind of weird because I hear all these stories about how nobody wants to work,” Cross said. “There are signs all over the drive thrus in Missoula: start up to $15. I thought ‘why aren’t these people going to work for $15 an hour?’”
She noted that she didn’t have some issues other workers might.
“I don’t have the childcare problem,” Cross said. “I don’t have to look for daycare.”
So she applied at many places. She said some places had lines three or four deep with applicants.
“The problem is they aren’t really offering those wages and I don’t know how many of them are actually hiring,” Cross said.
Many of the places Cross went were offering lower wages, like $10 an hour, with chances for raises, she said. Still, that wasn’t a problem for Cross, who was mostly interested in working just to fill time.
While her son suggested to her that she might be experiencing age discrimination, she said she knows other young folks applying the same places she is with the same results. She said she even watched a well-groomed, articulate young man at a hiring event in a home-improvement store get told “we’ll call if there are any openings,” at a table at the entrance that indicated it was urgently hiring.
“It’s so offensive to me when people say people don’t want to work,” Cross said. “I’m sitting here saying: ‘Here I am! hire me!’”