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Just because you can do it doesn’t mean you should

Anne headshot IIThings were pretty quiet when I stopped by the state Department of Employment this week to see how a recruiting fair for an Alaska seafood company was going.

In the room set aside for Icicle Seafoods, Inc., there were just two people and they were both human resource staff waiting for job applicants to come through the door. By mid-morning, only five had done so.

Icicle, which set a goal of recruiting 50 workers in a one-day swing through Boise, Meridian, Caldwell, and Payette, is experiencing a labor shortage, and it’s not alone.

Idaho farmers say an unskilled labor shortage is one of their most pressing problems right now. And it’s not just fruit pickers and dairy workers who are needed. Analysts for the state estimate there are at least 100 truck driving jobs available, with no applicants. Construction managers, too, say labor is their top concern.

Those situations are why businesses have thrown their support behind training programs at local community colleges, and why groups like the Milk Producers of Idaho have gotten closely involved in the talks about immigration reform in Washington.

A market correction would cure the shortage. Any first-year economics student will tell you that when demand outpaces supply, prices go up. In the case of employees, the price is the hourly wage.

But that hasn’t happened with labor in Idaho. Idaho’s minimum wage is set to the federal minimum, just $7.25 an hour. While employers may pay the minimum, that doesn’t mean they should. If they’re not finding the labor they need, it’s probably a good sign they’re not paying the market wage. Idahoans who need work can head over to Washington to make $9.32 an hour, or to Oregon for $9.10 an hour.

The oil boom in North Dakota is contributing to the labor shortage too. It’s not easy work in the oilfields, but the pay outshines anything workers could make driving trucks or working on a construction site in Idaho.

Immigration reform is key too. In this case, it doesn’t have anything to do with employers’ willingness to pay market wages. New arrivals with little English and few skills will work long hours for little pay. But if they don’t have their papers, employers can’t hire them..

Policymakers argue that unemployment benefits and other social programs erode workers’ desire to find a job. It doesn’t pay much, but some see it as a better choice than punching the clock every day.

The answer is complex. It’s going to take a huge effort to find immigration reform that works. The community colleges are doing a great job, but job training takes time. One part seems relatively simple: Employers don’t have to wait for the Idaho Legislature to raise the minimum wage. Nobody is stopping them from paying a living wage of their own volition. Employers could increase the supply of workers on their own by stepping up the pay.

 

About Anne Wallace Allen

Anne Wallace Allen is the editor of the Idaho Business Review.