WCMA Notes: Record Unemployment Doesn’t Mean Industry Must Go Without Workers

Posted By: Rebekah Sweeney WCMA News,

The national unemployment rate dropped in April 2019 to 3.6 percent, the lowest level in 50 years.  In Wisconsin, the rate is a new all-time record low of 2.8 percent.  While we might cheer those numbers as an economic success, they are also cause for employers’ concern.

For nearly a year now, the number of jobs listed in the United States each month has been higher than the number of people seeking work.  The gap is more than a million unfilled jobs, and it’s growing.

It will come as no surprise to those in the dairy processing industry that the jobs that are hardest to fill in America today are blue-collar.  Personal care aides, restaurant wait staff, janitors, and warehouse personnel top the list, but jobs in food manufacturing aren’t far behind.

We know there’s a problem and we know we need to address it.  The question is: how?

Some labor economists suggest increased immigration of lower-skilled laborers will be necessary to keep businesses growing.  The dairy processing industry should consider pushing harder for that change.  However, given the lack of political will for immigration reform in Washington, D.C., we’ll need to consider what action can make a more immediate impact.

Artificial intelligence and automation can replace some workers as technology becomes more sensitive and more nimble.  The dairy processing industry is home to many trusted suppliers of this equipment, and we see more cheesemakers investing in this solution each year.  With that said, the costs associated are significant – and cannot negate the need for creative minds at the vat or higher-skilled workers needed to run and repair robots.

Competitive compensation packages are a must, and for the past several years, economists have puzzled over the lack of wage growth in the United States, in the face of a robust recovery.  Perhaps globalization or the decline of unionization played a part, but whatever the reason, American workers’ paychecks have only just outpaced inflation.

Exceptions include minimum wage workers buoyed by legislated raises and the manufacturing sector which has shown more responsiveness to a tightening labor market, with wages up 2.9% year over year, the greatest rise since 2003.

Trade associations, including Wisconsin Cheese Makers Association, often offer wage and benefit surveys to provide data that helps members make informed decisions about compensation, and generic data is available to all through the U.S. Bureau of Labor Statistics.

Boosting wages and benefits may also incent those not currently looking for work back into the hunt.

Approximately 1.4 million people in our country today are “marginally attached” to the labor force, and not counted as job seekers.  These individuals might like to work, but cannot due to other responsibilities, such as school or caring for young children or elderly adults.  They also often face the benefits cliff, the point in which public support abruptly drops as their earnings increase – though not enough for self-sufficiency.  While changes at the federal and state level could address this, in the absence of legislative action, employers may wish to consider ways to bridge the gap.

Of course, another way to address a workforce shortage is to maximize retention.  And that’s about more than just money.

A Gallup poll released in March 2019 revealed that 50 percent of Americans have quit a job to get away from “bad boss” behaviors, including playing favorites, bullying and sexual harassment.  Proper training of supervisors and managers can help mitigate these issues.  Better still is the fact that, when leaders learn to offer regular praise and other forms of performance feedback and recognition, they can impact retention rates in a positive way.  WCMA offers these soft – and essential – skills trainings, as do many other trade associations, technical colleges, and for-profit entities.

The solution to the workforce shortage that our nation and our industry faces is not crystal clear, but more like a kaleidoscope, with many different components that are likely to change over time.

What’s important now is that employers acknowledge the challenge, explore strategies to address it, and take action as soon as possible.  Our nation will continue to hit new records for unemployment in the months ahead, but that doesn’t mean dairy processors must go without workers.