What to Watch: Job Market

“Help wanted” signs are ubiquitous at fast-food restaurants, retail stores and a variety of other businesses throughout the Grand Traverse region.

Local business leaders say the demand for talent will likely remain high in 2017. But they add that in some respects the job market isn’t as healthy as it appears in the monthly government job statistics.

While many employers say they can’t find enough qualified workers, employees struggle to land jobs that pay enough to afford the growing cost of housing and other living expenses in the area.

“The laws of supply and demand are not working the way they’re supposed to,” said Doug Luciani, CEO of TraverseCONNECT. “We’re not seeing a corresponding increase in wages or benefits you would think would go with a tight labor market. Meanwhile the cost of living is going up.”

And that’s not just true for retail, hospitality and other lower-income workers.

“A lot of (professional) people are coming to me saying they were downsized or their position was eliminated and they’re having a hard time finding a job that pays what they were making,” Luciani said.

Meanwhile, he said some employers are reluctant to hire as many workers as they otherwise would for various reasons, including uncertainties about a new administration in Washington, unclear tax and energy policies, and the future of health care costs.

“There’s so much uncertainty,” Luciani said. “Employers haven’t forgotten how bad it was in the last recession. They’re stuffing money in the mattress.”

While fast-food establishments can’t find enough workers, the labor situation for higher-end restaurants is more complex, said Paul Danielson, owner of Trattoria Stella and The Franklin restaurants in Traverse City.

It used to be that those restaurants could make enough money in the busy summer months to carry them through the leaner off-season months. But an explosion of new restaurants and higher operating costs have made that more difficult, according to Danielson.

“There are 25,000 year-round residents within 10 miles of here and 6,000 restaurant seats,” he said. “There are just not enough customers in the winter.”

The seasonal nature of the business makes it difficult for restaurant workers to find work in the off-season and make enough money to support themselves throughout the year, Danielson said.

He said he’s received 100 job applications in the past 30 days.

“They can’t afford housing and parking downtown is a dollar an hour. Those are disincentives to stay in the business and become good at it,” he said.

Terry Vandercook, director of operations at Northwest Michigan Works!, said the manufacturing, health care and hospitality industries are facing the biggest demands for labor. But demand is “growing quickly” in various technology-based businesses, he said.

Grand Traverse County had the seventh-lowest seasonally unadjusted jobless rate in the state at 3.5 percent in October, according the latest available data from the state Department of Technology, Management and Budget.

Leelanau County ranked seventh at 3.6 percent while Benzie was 35th at 4.5 percent. Kalkaska Country ranked 63rd at 4.5 percent.

Some economists consider a jobless rate of about 5 percent as full employment.

Vandercook said his agency is focusing on offering programs that provide workers who’ve been disconnected from the workforce with the technical and basic employment skills they need to find jobs.

The tight labor market for manufacturing jobs could ease a bit in 2017, according to a November University of Michigan state economic forecast.

While U-M economists are forecasting continued overall job growth for the next two years, they are predicting Michigan will lose 10,000 manufacturing jobs in the same period as U.S. auto sales and vehicle production in the state stagnate.

Luciani said he’s most hopeful about the prospects for entrepreneurial business growth in the area.
“It’s a good time for young entrepreneurs,” he said. “They don’t know the bad side of the economy in the past and they are forging ahead.”

Read what else the TCBN thinks will make news in 2017 in the January print issue, now on newsstands around town.