States battle for workers amid low unemployment

When Wisconsin officials pitched the Taiwanese manufacturer Foxconn on building a mammoth new factory in their state, they promised billions in tax breaks and other economic incentives, as well as infrastructure to accommodate the facility.

Now, as the company prepares to break ground on the plant in Mount Pleasant later this month, Wisconsin is scrambling for one more essential ingredient: Highly trained workers to staff the new production lines.

In the years after the Great Recession, a booming economy has sent the unemployment rate to its lowest in decades. Wisconsin, where it stands at just 2.8 percent, is one of 14 states that have set new record lows for unemployment since President Trump was inaugurated. 

There are now more job openings in the United States than there are jobless workers, the Labor Department said this week.

The improving economy has unsettled a balance of power in the years during the recovery that clearly favored businesses over employees. States raced to offer creative incentive packages, some worth billions of dollars, in hopes of luring new businesses within their borders.{mosads}

But now many of those same states are shifting their focus from the companies to the workers. In some cases, like Wisconsin, that’s because the state does not have enough qualified working-age people to fill vacant jobs. In other cases, it’s because companies themselves, in search of locations for new outposts, are increasingly demanding states provide a qualified workforce from which they can draw.

“It’s kind of the perfect storm right now of low unemployment, people aren’t moving and we need people who are talented” to fill open jobs, said Rebecca Gehman, director of talent attraction at Development Counsellors International, which works with cities and states on business recruitment projects. “Companies are putting pressure on local economic developers to help them fill those jobs.”

Wisconsin has focused a $7 million ad campaign on what they see as promising targets: millennial workers in nearby states, alumni of state universities who might have moved home and veterans and their families looking for somewhere to land after an itinerant military career.

Millennials in Minnesota, Iowa and Illinois will be seeing advertisements touting Wisconsin’s quality of life on YouTube or Pandora, or in health clubs, or even on coasters at their local bar. Wisconsin-themed tables will be showing up at recruiting events and trade shows aimed at veterans. The state even has a mobile job center bus that travels between events.

“Traditionally, as [with] most states, we have promoted ourselves as a place to do business and provided reforms to make Wisconsin a more business-friendly environment,” said Tricia Braun, chief operating officer and deputy secretary of the Wisconsin Economic Development Corporation. “Now it’s really shifting our focus to be more focused on quality of life, and telling that part of the story.”

The seller’s market has also led to an increase in worker’s wages, as businesses compete for an increasingly shrinking applicant pool. Average wages increased 2.7 percent in the last year, according to the Bureau of Labor Statistics, after stagnating at or below 2 percent for most of the recovery.

The nation’s shifting demographics are placing a new onus on states to attract workers, especially in the Midwest and Northeast. The workforce in those states is shrinking, as baby boomers retire and as younger residents move to faster-growing areas in the South and West.

“This is competitive. Wisconsin is not the only one that is facing this demographic shift,” Braun said. “We really have to be focused and aggressive on doing this.”

Other state and local governments are also trying out new ways to attract workers. In Cleveland County, N.C., the local economic development corporation is trying to fill hundreds of manufacturing jobs by pitching itself as Charlotte’s back yard, complete with all the attractions of a big city without the traffic and hassle that comes along with a metropolitan lifestyle. 

Businesses in Baton Rouge, La., asked the local Chamber of Commerce to market their region more effectively, so the Chamber created a Talent Concierge that matches workers with local jobs at companies such as IBM and ExxonMobil. The South Carolina Technical College System created a portal to connect those looking for high-tech manufacturing training and companies including Volvo, Samsung and Mercedes-Benz that are looking for new workers.

Last month, Vermont Gov. Phil Scott (R) signed legislation that would pay $10,000 to those who move to the state and work remotely for an out-of-state employer.

“These communities are using marketing to make sure that location is not a non-starter when they’re talking to potential employees,” Gehman said. “The urgency to attract talent just as much as attracting investment is the reality we live in today.”

Washington state is thinking even more long term. As part of an $8.7 billion package of incentives meant to keep a major Boeing assembly line open in the Puget Sound region, the state pledged to spend millions on science, technology, engineering and mathematics education as early as elementary school, so that the company will have a qualified local workforce for generations to come.

But other states need a qualified workforce in the nearer term. Patrick Barker, executive director of the Frederick County, Va., Economic Development Authority, said speedy results can help a region grow.

“Workforce training and educational improvements are great — we have all those initiatives in the crockpot,” Barker said. “What we need is a microwave solution, and that’s marketing.”

–This report was updated on June 27 at 9:56 a.m.