By STEVE MATTHEWS
To hire 10 to 15 project
coordinators this year,
Sabre Commercial Inc. has boosted pay 10% and added a 401(k)
It is an employees market, said John
Cyrier, co- founder and president of the 48-employee Austin,
Texas-based builder. We are definitely seeing a labor
shortage in Austin and central Texas. I see it only getting
Companies across the US from Texas to Virginia and Nebraska
are struggling to fill positions with metropolitan jobless
rates below the 5.2% to 5.6% level the Federal Reserve
regards as full employment nationally. Competition for
workers is prompting businesses to raise wages, increase
hours for current employees, add benefits and recruit from
There are spot labor shortages that probably will
broaden out over the next year as the job market
steadily improves, said Mark Zandi, chief economist at
Moodys Analytics in West Chester, Pennsylvania.
Unemployment in Austin-Round Rock-San Marcos was 4.8% in
February, Labor Department figures show. Forty-nine, or 13%,
of the 372 metro areas reported jobless rates below 5% that
month, the most for February since 2008, two months after the
start of the recession. The lowest was 2.8% in Houma-Bayou
Cane-Thibodaux, Louisiana, because of offshore-oil
exploration in the Gulf of Mexico.
Four years ago, during the worst of the labor-market slump,
just two cities had rates below 5%.
That says the economy is getting better in a lot of
places, said David Wiczer, labor-market economist at
the Federal Reserve Bank of St. Louis. While national
unemployment is a closely watched indicator, it is
difficult to average things. This does have implication for
wage pressure at the local level.
The Feds Beige Book review of regional economic
conditions has highlighted the pinch. Labor markets in the
Minneapolis Fed district have tightened, with strong
demand for welders and health-care workers, such as certified
nursing assistants, and earnings at high levels
in the oil-drilling areas of North Dakota and Montana,
the Fed reported March 5. The next review is due today.
Compensation has risen about 2% nationally so far this year
and probably will increase by 2.2% next year, 2.5% in two
years and 3% by late 2016, Zandi estimates.
The national economy will return to full employment one
metro area at a time, he said.
As incomes edge higher and labor markets tighten, the Fed may
raise its benchmark interest rate more than policy
makers have project
ed, said Joseph LaVorgna,
chief US economist at Deutsche Bank Securities in New York
and the top unemployment forecaster for the past two years,
according to data compiled by Bloomberg.
The FOMC has held its federal funds rate on overnight loans
among banks near zero since December 2008 and has predicted
the rate will be 1% at the end of 2015 and 2.25% at year-end
2016. LaVorgna estimates it will be 1.5% in December 2015 and
3.5% a year later.
Regional demand will have the greatest impact on paychecks
for the lowest-wage jobs, such as fast-food, because people
arent likely to relocate for these positions, said Gary
Burtless, an economist in Washington at the Brookings
Institution who was previously at the US Labor Department.
Tightening local markets while the national market
remains weak would reflect some geographic mismatch, in which
demand is rising in some localities while the supply --
unemployed workers -- are concentrated elsewhere, said
Harry Holzer, a professor of public policy
at Georgetown University in
Washington and former chief Labor Department economist.
While some people will move for good-paying careers over
time, migration can be limited by poor information about
opportunities, houses with mortgages more than the value of
the properties and an aging population, Holzer said.
The number of positions waiting to be filled climbed by
299,000 to 4.17 million in February, the most since January
2008, the Labor Department reported April 8. The figure is
among the job-market barometers Fed Chair Janet Yellen
In New Orleans, where unemployment is 4.2%, we are
getting killed on overtime, said Ti Martin, co-owner of
Commanders Palace, SoBou and Café Adelaide,
which employ a total of more than 350 people. We are
doubling up and working extra hours, and managers are
filing in as cooks. The restaurants have a dozen or more
openings, mainly for experienced chefs and servers, she said.
Martin is leading an effort among proprietors to start a
nonprofit culinary institute in the city to train needed
In Omaha, with a 4.5% unemployment rate, the Greater Omaha
Chamber is coordinating a program that will increase the
number of internships to more than 300 this year from 135 in
2012 at employers including Mutual of Omaha Insurance, Union
Pacific and ConAgra Foods. Exposing young people to the city
has been an excellent recruitment tool, said
Sarah A. Johnson, director of talent and workforce
initiatives for the chamber.
A tight market is literally our reality, said
Omaha Steaks International spokeswoman Beth Weiss. The food
seller hired more than 3,000 people for seasonal jobs during
the holidays and uses cash bonuses and employee discounts to
try to attract workers.
The jobless rate in the Washington metro area, which includes
the Virginia cities of Alexandria and Arlington, was 5.1% in
February, near a five-year low, which means some professional
jobs have gone begging.
The competition for people is really fierce right
now, said Gar Muse, principal with Cooper Carry, an
architectural firm that has increased staff to 50 in
Alexandria from 40 in 2010 and plans to hire more. Cooper
Carry boosted its advertising to seven print and online
outlets this year from a single posting and uses social media
to promote job openings.
The company also has had to work to keep existing staff.
We have lost a handful of people, Muse said.
They are constantly being approached and we have had to
make some counteroffers.
Social-media sites are playing a bigger role in scouting
talent. Some 77% of employers used networking websites to
recruit potential job candidates last year, up from 56% in
2011, according a 2013 study by the Society for Human
Resource Management, an Alexandria-based trade group
representing human-resource professionals.
The labor shortage is expected to worsen in some regions. In
Houston and the surrounding area, construction
for the oil, gas and
industries on the
Gulf Coast will require about 36,000 more workers in 2016
than in 2013, according to Industrial Info Resources, a
Houston-area based research company.
Even with hot labor markets in some cities, twenty-nine metro
areas still have unemployment rates of at least the October
2009 post-recession peak of 10 percent, including Atlantic
City, New Jersey, and Fresno, California.
The national picture is generally consistent with a
slowly improving job market that is still far
from complete health, said Rob Valletta, research
adviser at the San Francisco Fed, whose work has been cited
Moreover, some economists believe the decline in joblessness
-- which was 6.7% in March and has fallen faster than Fed policy
makers predicted -- is
sending a misleading signal about the health of the economy.
The labor market actually has a fair bit more slack
than would be indicated by the national unemployment
rate, said Jesse Rothstein, a former chief economist at
the Labor Department who now teaches at the University of
California at Berkeley. If you believe that, then the
same problem has to hold in local labor markets as
Employers in Austin say they dont see evidence of
slack, such as discouraged workers waiting for more
opportunities to start looking for jobs.
There is a stronger economy and a lot of growth in the
tech sector, said Jason Schenker, president of Prestige
Economics, an Austin-based economic research company.
is booming. There is
some migration of people for jobs, which has a multiplier
effect creating more jobs.
The city was relatively resilient during the
18-month recession that ended in June 2009, in part because
it is the state capital and home of the University of Texas,
It is definitely a war for regional talent, said
Sherri Manning, vice president at Q2 Holdings, an Austin
company with 446 people that provides technology
for online and mobile
Q2 Holdings, which hires 70% of its staff from Texas,
provides cash bonuses to employees for referrals and holds
recruiting events with pizza at pinball arcades. Last year,
it started a 90-day training program to teach needed skills
to people with a technical inclination -- such as a math or
science degree -- though no formal experience. Those who do
well are hired, Manning said.
Shortages exist in Austin for construction
workers in trades
including installing drywall and painting, Sabre
Commercials Cyrier said. His company, which began
boosting wages in 2011, directly employs project
coordinators, while contracting out most other tasks.
Subcontracting costs have gone up 15% or more in the past
three years, he said.
He has sought to create a more collegial environment
to attract younger
workers. One example: stressing more communication, including
daily huddles among staff about project
issues. Making sure the
company is viewed as a good place to work is important
because it receives a third fewer resumes than two years ago,
If we get a good resume, we have to make a decision
really quick, he said. We are always