Low unemployment rate making it harder than before for employers to find workers

The old aphorism “good help is hard to find” is more and more becoming a reality for employers.

Unemployment rates have been falling locally, statewide and nationally for the past eight years. In Boyle County, the unemployment rate was at 3.9 percent in December, according to the Kentucky Center for Education and Workforce Statistics. That’s the lowest it’s been here since 205 months ago, in November of 2000, based on historical data from the U.S. Bureau of Labor Statistics.

KCEWS gives Boyle County an estimated labor force of 12,517, of which it says only 484 are currently unemployed.

Unemployment rates are similarly low in many other Kentucky communities and around the nation. While low unemployment is generally considered a good thing, there are problems created when unemployment dips too low, said Jody Lassiter, president of the Danville-Boyle County Economic Development Partnership.

“Economists generally consider full employment at 5 percent, so you could say that we’ve reached a level of full employment, not only here but in other areas of the country, so therefore there’s just fewer people … to fill the jobs that are being generated,” Lassiter said. “And in some cases, we have a mismatch of skills for the people who are interested in those jobs.”

Lassiter is not the only one paying attention to this issue. In fact, it was a focus of discussion at the recent 2018 Southern Economic Development Roundtable, a major gathering of top economic development professionals from the southern U.S. hosted by Southern Business & Development Magazine.

Lassiter, who attended the roundtable, said the “No. 1 issue by far” for economic development is that “the south is out of labor.”

According to a presentation from Southern Business & Development Publisher Mike Randle, the rate of jobs created in the south has been outpacing the number of people entering the workforce for years.

National solutions

Lassiter said there are three main ideas that have been put forth for solving the labor shortage:

• increase the country’s fertility and birth rates;

• increase immigration; and/or

• develop “chronically unemployed” people into employable workers.

Lassiter said U.S. House Speaker Paul Ryan and others have said the country needs to incentivize higher birth rates, but he doubts such a strategy could be successful. A democratic country like the U.S. cannot force people to have more children, and it doesn’t seem likely that the trends of younger generations marrying later and having fewer children are going to change anytime soon, he said.

Lassiter said he’s been to cities like Toronto in Canada, where the economy is booming thanks to immigration.

“They have resolved their immigration issues,” he said of Toronto. “We’ve got to fix our immigration issues while meeting concerns for security, which are reasonable. Immigration is why the United States has been a powerhouse since 1607, and I think that’s part of the magic of America and why we need to continue to do that as we go forward.

“There are opportunities here; people want to be here and pursue those opportunities. But our immigration laws impede those.”

The presentation from Randle estimates the number of jobs per month added to the south’s economy will drop significantly “for many years to come unless immigration is increased dramatically, not cut.”

Developing workers out of “chronically unemployed” people is also something worth pursuing, though it is “by far the most labor-intensive” strategy, Lassiter said.

This area involves finding people who are unemployed and can’t get a job or “under-employed” and can’t land a better job, then giving them training and support that helps them improve. It also includes helping drug-addicted individuals who could work otherwise move “from social assistance to meaningful work,” he said.

There is no easy way to run such programs — it requires mentors, advisers, staffing and a lot of work with those people identified as chronically unemployed.

“It’s very expensive as a result,” Lassiter said. “So I think that our states (and) localities have to make decisions as to how much funding can be put to move that part of the needle.

“I think immigration is probably the No. 1 issue that we have to address.”

Local solutions

At the Boyle County level, Lassiter said solutions to the low unemployment problem involve trying to attract more people to live here and helping employers better reach into the county’s 13-county “labor market area” when they’re hiring.

“Boyle County is going to be growing in population at a steady clip … but those to the south of us, those counties will not — there will be a significant population loss. Since that’s where we draw a lot of our workforce, that’s very concerning,” Lassiter said. “… So we’ve got to spur growth in our local population by offering desirable jobs with wages that are attractive and can sustain a family and a decent quality of life.”

Boyle’s labor market area as defined by ThinkKentucky includes the six counties that border Boyle — Casey, Lincoln, Garrard, Mercer, Washington and Marion — and six further counties that are still within a 60-minute commute to the geographic center of Boyle: Rockcastle, Jessamine, Fayette, Woodford, Anderson and Nelson.

Boyle’s labor market area had an estimated workforce of 319,629 in October 2017, with 11,133 of those people unemployed, according to ThinkKentucky. That’s a 3.5-percent unemployment rate.

Lassiter said employers must be looking outside Boyle County’s borders to find all the workers they need.

“If that means a great job in Boyle County can sustain someone who decides to purchase a nice home … in Mercer County or Garrard County, all the better,” he said. “But we’re still going to be the provider of services and jobs to those outlying rural counties.”

The EDP is currently working to help employers share help wanted ads outside of Boyle County’s borders through things like Facebook posts.

As new jobs continue to arrive — Adkev Inc. is expected to need 70 new employees when it begins operations in 2019, for example — Lassiter said he believes the workers are there, it’s just a matter of finding them and training them.

Danville’s Bluegrass Community and Technical College campus is one resource that can help in the area of training, he said.

“We need to constantly assess what our existing and new companies need for their current and future workforce, and then we engage directly with our resources, primarily at BCTC,” he said. “We can design specific programs to produce the kinds of … graduates or other certificate students that can emerge from BCTC and immediately go and work in one of our local industries.”

Workforce development

Lassiter said he is hearing concerns from human resources personnel and managers throughout the Boyle County community that they believe Boyle County cannot support the addition of further large employers — that it would make it even more difficult to find the workers needed now.

“I think we’ve already heard those concerns expressed and it’s the responsibility of the economic development partnership staff to work through and around those concerns to assist,” he said.

Steve Rinehart, who has helped lead a Workforce Development Committee in Boyle County, said right now, the county is not doing enough to fix the problem of people who are of working age but unable to enter the workforce.

Rinehart, who retired as an administrative manager at Denyo last year, said he and other human resources managers in Boyle County have been noticing a decline in the quality of job applicants for several years.

Some don’t seem to have the ability or understanding to complete the job application in a way that would allow them to be considered; others cannot explain the skills they have, he said. Some do not understand the importance of “aesthetically presenting themselves well,” and some cannot carry on “a decent conversation” during an interview.

RInehart said Boyle County needs to be doing more to develop “soft” or “employability” skills that would help people with the ability to work land and keep jobs. And the county needs to do a better job of providing training for skilled jobs, too.

“The county is not doing enough to address the issue of folks that are out there that are under-skilled, under-employed, as well as unemployed,” he said.

The Danville-Boyle County Chamber of Commerce had run its Workforce Development Committee, of which Rinehart was chair, for around 10 years. But after a reorganization of the EDP last year, the responsibility for workforce development was transferred from the chamber to the EDP.

“As it stands right now, the chamber’s Workforce Development Committee is basically defunct,” Rinehart said.

He said the committee met with human resources managers, representatives from local industries and others last year to begin development of a “pre-employment training program” that could identify people who need help with soft and technical skills, and perhaps access state funding to provide training and coaching.

“We were just beginning to have those conversations last fall, but that’s as far as it’s gotten,” he said.

Rinehart said he is attempting to work with Lassiter, local plant managers and the local chapter of the Society for Human Resource Management to get that conversation back on track. Just such a meeting of the minds may occur as soon as March.

“As long as each group is trying to do their own thing, there’s not going to be a … coordinated effort to address it. It’s going to be spotty,” Rinehart said. “… An individual company really is not in a position to try to go out there and do proactive work skills training on their own. But you put enough organizations together pooling resources, I think you could build a coalition that could address it.”