SALT
LAKE CITY — Stephanie Pappas and her brothers built their roofing
supply company in this fast-growing region by promising next-day
delivery, but lately they’ve been forced to tell some customers that
tomorrow is impossible.
Their
company, Roofers Supply, employs 28 drivers across Utah, and Ms. Pappas
said she would need at least 15 more to meet the exploding demand for
shingles and tiles. The company has raised its starting wage by 10
percent since the beginning of the year to $17.50 an hour, but it’s not
enough.
“We never want to have to say, ‘We can’t do it,’ but we need people,” Ms. Pappas said.
After
eight years of steady growth, the main economic concern in Utah and a
growing number of other states is no longer a lack of jobs, but a lack
of workers. The unemployment rate here fell to 3.1 percent in March,
among the lowest figures in the nation. Nearly a third of the 388
metropolitan areas tracked by the Bureau of Labor Statistics have an unemployment rate
below 4 percent, well below the level that economists consider “full
employment,” the normal churn of people quitting to find new jobs. The
rate in some cities, like Ames, Iowa, and Boulder, Colo., is even lower,
at 2 percent.
That’s
good news for workers, who are reaping wage increases and moving to
better jobs after years of stagnating pay that, for many, was stuck at a
low level. Daniel Edlund, a 21-year-old call center worker in Provo,
Utah, learned Monday that his hours were changing. On Wednesday, he had
his first interview for a new job.
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“I’m trying to find a company that treats you well,” he said.
But
labor shortages are weighing on overall economic growth, slowing the
pace of expansion in northern Utah and other fast-growing regions even
as unemployment remains stubbornly high in Rust Belt cities like
Cleveland and in regions still recovering from the 2008 recession, like
inland California.
To
Todd Bingham, the president of the Utah Manufacturers Association, “3.1
percent unemployment is fabulous unless you’re looking to hire people.”
“Our
companies are saying, ‘We could grow faster, we could produce more
product, if we had the workers,’” he said. “Is it holding the economy
back? I think it definitely is.”
President
Trump continues to promise that he will accelerate job growth by
cutting taxes and regulations. But the accumulating evidence that
workers are getting harder to find, and that wages are rising more
quickly, has convinced many economists that significantly faster growth
is unlikely. The Federal Reserve
has cited the trend as its reason for moving to wind down its own
economic stimulus campaign. The Fed may raise interest rates again at
its next meeting in June.
Qualtrics,
which conducts online market research, is a prime example of the rapid
growth of the Utah economy — and the sense that Utah is straining at the
limits of its growth potential. Scott Smith started the company with
his son, Ryan, and a college classmate in his Provo home in 2002.
Qualtrics now employs 1,300 people, including about 800 in a new
headquarters building opened in August at the mouth of Provo Canyon. And
it is bringing workers to Utah as fast as it can.
Each
Monday, the company ties red balloons to the desks of that week’s batch
of new employees. Last week, there were several dozen of those
balloons. The parking lot outside the new headquarters building is
already overstuffed, including many cars that still have out-of-state
plates.
Ryan
Smith, now the chief executive, said Qualtrics had hired about three
dozen graduates from the University of Michigan alone last year. The
company estimates that new arrivals bought 100 homes in Provo last year.
Utah’s
tech scene is growing alongside the company. More local university
students are studying engineering; more start-ups are popping up in the
region, which boosters would very much like everyone to call “Silicon Slopes.”
But by the end of the year, Mr. Smith said, he expects the company will
have more employees outside Utah than in its home state. It is growing
where it finds workers.
Companies
in Utah, as in the rest of the country, were slow to raise wages in
recent years. At first there were plenty of available workers. But by
the end of 2015, a report by Utah’s Department of Workforce Services
concluded that inadequate wages had become a key reason companies were
struggling to find employees.
“It
was as if employers hadn’t adjusted their approach to the labor market”
as the economy recovered, said Carrie Mayne, the department’s chief
economist.
Now
there are signs the logjam is breaking. Adam Himoff, the president of
Xemplar Skilled Workforce Solutions, a recruiting firm hired by Roofers
Supply to find drivers, said he had seen an increase this year in the
willingness of clients to raise wages.
“Labor
has become the constraint on their growth goals, and they’re
recognizing that they’re going to have to increase wages to achieve what
they want to achieve,” he said.
Ms.
Mayne said the state also saw signs of what she described as a
broad-based acceleration in wages in the most recent data, through the
end of last year.
But
the share of Utah adults who have withdrawn from the labor force
remains higher than before the recession. Last year, 31.7 percent of
adults in Utah were neither working nor looking for work, up from 28.2
percent in 2006. That is part of a broad national trend.
And a 3.1 percent unemployment rate still means that about 50,000 people in Utah were trying to find jobs in March.
Some,
like Monica Von Strahl, expect to find work quickly. Ms. Von Strahl,
44, moved to Utah from Oregon in April for family reasons. She left a
job as a caregiver for adults with disabilities that paid $16 an hour;
so far, the most she has been offered in Utah is $10 an hour. She plans
to keep looking a little longer. (Scholars at M.I.T. estimate that a living wage in Utah for a single person is $10.71 an hour.)
But
even in a red-hot market, some of the people who are looking for work
struggle to find the right fit. Noel Nampijja, 42, left her job as a
nurse’s aide two months ago because the work of moving patients was
hurting her back. She just completed training as a phlebotomist, a
medical assistant who draws blood.
“I’m hoping to find a job that won’t hurt as much,” she said.
In less lucrative industries, labor shortages may remain an intractable problem.
Ron
Gibson, a fifth-generation dairy farmer, tends 1,500 cows on family
land outside Ogden. Last month, he placed an ad in local papers seeking
three workers at wages starting around $12 an hour. It did not draw any
responses.
Mr.
Gibson cannot afford to chase workers by raising wages. The price of
milk, adjusted for inflation, is lower now than in the 1980s. Instead,
he is producing less milk. Each cow is milked three times a day; only 15
percent get a fourth milking.
He
also laughed at the idea that Americans might move from other states to
milk cows in Utah. He relies primarily on immigrant labor,
communicating with his two dozen workers in the Spanish he learned as a
young Mormon missionary in Argentina. And since Mr. Trump’s election, he
said, workers are harder to find.
“We are either going to import workers or we are going to import milk,” Mr. Gibson said.
The work “is dirty, stinky and hard,” he added. “It’s not what we teach our young people to do.”
But
there is another solution on the horizon: automation. Last year, Mr.
Gibson and his son visited a farm in upstate New York where robots milk cows. The cows learn to approach the machines when their udders are full.
Mr.
Gibson is not yet ready to make the jump. Each machine costs half a
million dollars, and the New York farmer spends about as much on
mechanics as he spent on farmhands. But Mr. Gibson said he expected his
children would use robots to milk cows.
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