"If you want to work, there is no excuse for not getting into the job market now,” says Phil Blair, executive owner of Manpower San Diego. Blair, the local employment guru, is talking about the labor shortage crippling local companies and their industries. “I keep waiting for people to get off the couch, get in the job market now, build skills, build their résumés.”
In July, the county’s unemployment rate was only 3.5 percent. The nation’s was 4.1 percent. That means San Diego’s labor shortage is worse than the nation’s. “Anything under 4 percent suggests a labor shortage,” says Kelly Cunningham, economist for the San Diego Institute for Economic Research.
The bottom line is that employers need you so badly that in many cases they will raise salaries and even take a bite out of their profits to get you. Manpower clients who used to demand five or ten years of experience now say, “We hire for attitude; we will train for the skills. We just want a positive attitude and a smile on their faces,” says Blair.
The Conference Board, an organization that does research for business, writes, “The retirement of baby boomers will create a shortage of skilled workers in mature economies worldwide, leading to higher wages and lower profits for the next 15 years.” (Italics mine.)
Yahoo! For about four decades, companies have been picking their employees’ pockets — that is, our pockets. Middle-class incomes stayed stagnant while upper-class incomes and corporate profits zoomed upward. Capital got everything and labor got nothing. Finally, companies need us little folks again. For the first time in at least two decades, there are now more job openings than people to fill them.
The Conference Board’s prediction applies to skilled labor, but people in unskilled jobs can take advantage of a tight labor market, particularly by job-hopping to higher and higher pay. That is definitely true in fast-food restaurants, hotels and motels, and retailing. Agriculture has special problems of its own, greatly related to immigration restrictions.
Last year, 37 percent of National Restaurant Association members said labor recruitment was their biggest problem, up from 15 percent in 2015, according to the New York Times. Restaurants are reimbursing chefs for their culinary school tuition, hiring former prisoners as kitchen assistants, and hiring people competitors have fired. The association says it needs a temporary visa program for low-skilled workers, such as the H-1B program for skilled workers that has generated so much controversy.
A big problem for fast-food outlets: there are far fewer teenagers in the labor force than there were 25 years ago, says the Times. In the year 2000, about 45 percent of young people between 16 and 19 years of age had a job. That’s now down to 30 percent. Why are fewer teens working? A study by the Bureau of Labor Statistics concluded that increasing emphasis on education, such as getting scholarships, had contributed to the decline. Also, companies’ refusal to employ young people who use marijuana could reduce the worker supply.
“It’s a tough environment. Everyone in our industry is experiencing difficulties,” says Brian Luscomb, spokesman for San Diego–based Jack in the Box, one of the largest fast-food chains. “With unemployment low, workers have a lot more opportunities for going to other jobs” at higher wages.
Some fast-food chains have been forced to raise wages to attract workers. This may mean higher product prices, and that may force down profits. Jack in the Box has not done that yet, says Luscomb, noting that its competitors are in the same boat. “We’re in a low-margin business. We are hesitant when it comes to raising prices.”
The hotel/motel industry is hurting for labor, notes Blair. “It’s gotten tougher and tougher,” says Bob Rauch, chief executive of RAR Hospitality, which owns and manages 18 hotels, 11 in San Diego. Wages at his hotels have gone up 44 percent in recent years, in line with increases in the minimum wage. (The City of San Diego minimum wage is now $11.50 an hour, with future increases tied to the cost of living. For other cities in the county, the statewide minimum wage is $10.50 an hour for employers with 25 employees or fewer and $11 for those with 26 or more. In 2022, it will be $14 and $15, respectively.) But housing costs are less affordable in San Diego County than just about anywhere in the nation. Thus, employees making the minimum wage, such as housekeepers, are mercilessly squeezed. “A lot of single moms have to work two jobs,” says Rauch. But there can be upward mobility: some who begin as housekeepers can work up to $60,000 to $80,000 jobs, he says.
Employers in some cases pay above the minimum wage rate for unskilled people “just to retain new workers,” says Lynn Reaser, chief economist at Point Loma Nazarene University. In some competitive markets and industries, “It’s difficult to raise prices” to offset the effect of shortage-induced wage bumps, she says. Thus, “Employers are trying to improve productivity and efficiency.” But you can only squeeze so much juice from an orange.
In the area of skilled jobs, Reaser says hospitals are short of nurses (true throughout the U.S. for a long time) “and technology companies are trying to recruit software engineers.” Blair says there are openings at the University of California at San Diego, Northrop Grumman, and General Atomics.
“There have not been new agricultural visas available for several decades, and consequently, the farmworker population has pretty much aged out,” says Eric Larson, executive director of the San Diego County Farm Bureau. “With the current federal policies on folks coming from Mexico, there is a rapidly shrinking labor supply of people who come here legally.” For farmers, “It’s not wise to hire people who are not properly papered. Labor enforcement people can walk onto a farm anytime and demand” to see workers’ legalization papers.
Unlike retailers or manufacturers, farmers can’t hold on to their inventory until prices are favorable. “The grower can’t charge $2 for avocados when they are coming in from Mexico for $1,” he says, and most ag products can’t sit on the shelf until they are purchased. However, the politicians in Washington, D.C., “have no appetite for immigration reform to get people from Mexico to come here” and relieve the labor shortage, which is complicated by farmers’ difficulties meeting housing and transportation requirements.