Traverse City News and Events

(Desperately) Seeking Workers: Behind Traverse City's Employment Crisis

By Craig Manning | July 22, 2021

Though Michigan unemployment has been hovering near five percent for most of 2021, it simply must be dramatically higher in and around Traverse City, particularly for retail and restaurant positions. Many local employers are desperate to fill open positions or even attract applicants. The Ticker catches up with Matt McCauley, CEO of Networks Northwest, which provides employment and economic services throughout a 10-county northern Michigan region for an inside look at the labor shortage.

Ticker: How bad is the employment situation right now?
McCauley: It’s really interesting, because right now, there's the proverbial ‘Help Wanted’ signs all across the region, all across the state, all across the nation. Across all industries, there is tremendous labor shortage nationwide. And while we were experiencing this problem pre-COVID, in 2019, COVID-19 has certainly accelerated what we were already seeing with regards to labor force participation and trend lines.

Ticker: What factors are making this such a uniquely hard time to hire?
McCauley
: There’s not just one thing; it’s a number of factors and issues that that are impacting us and creating a perfect storm. Some of them existed prior to COVID and some of them are a direct result of COVID. Most famously, when speaking about the results of COVID, we saw the state and federal governments increasing unemployment benefits. It’s not as prevalent as I think some people would believe, but there certainly are a number of people who are making the decision not to re-enter the labor market because they are making more money with unemployment benefits.
 
So that’s a reason. That's not the reason. Another reason that is directly tied to COVID is that we had a number of people that left the workforce over the last year and a half...
 
The boomer piece, I think, is the most significant and structural piece of the entire conversation. There’s a term I heard last week called ‘sansdemic,’ which means ‘without people.’ We’re in the middle of a sansdemic. If you look at the trend line for Michigan – and it's even greater for our community here in northwest lower Michigan – in the year 2000, Michigan was the 30th oldest state in the nation. Now, it's the 10th oldest state in the nation. In the year 2000, 12 percent of our population was above the age of 65; now it's 19 percent. This represents the largest generation that the country has ever known – the baby boomers – and they are leaving the workforce. But their demand for goods and services remains. So there just isn't the replacement – the bench strength, if you will – to fill the positions that many of those individuals are leaving. COVID-19 didn’t cause that issue, but it did accelerate it.

It’s also worth noting that, during this same time period, when our over-65 population went from 12 percent to 19 percent, the state didn't grow at all.

Our region itself is a growing region. People are moving here. But it’s generally older individuals that are coming to the area…close to 20 percent of the population in Grand Traverse County is 65 or older.

Ticker: But we’ve also heard about how the pandemic accelerated the number of younger people and families moving here and bringing their jobs because COVID allowed for more telecommuting. How does that trend impact things?
McCauley: Generally speaking, this area doesn't do as well with college age – what I call the 18-24 demographic –or the young adult demographic, which I classify as 25-44. We lag behind the state and the nation with percentage of the population in those age cohorts. That’s not to say that [younger people aren’t moving here], and maybe that’s even improved a little bit due to COVID. But it goes both ways: There might be economically mobile younger people moving to the area. But if you're economically mobile, you might also be leaving the area because of lack of access to higher-wage jobs, housing, things like that. So, what the net gain or loss might be as a result of this unprecedented economic time, between the in-migration and the out-migration, we don't know quite yet.

Ticker: It sounds like Michigan – our region in particular – has a few factors that are maybe making it especially hard.
McCauley
: The matter that is specific to our region is housing. The region's wages are 85-88 percent of the state's median wage, whereas our housing cost is 10-20 percent above state's median. So there is a tremendous disconnect between the average wages of this region and the housing demands of this region. And it does go back to those structural demographics of our communities, in that many of the people who are moving here are older, out of the workforce, and more affluent. That has a tremendous ripple effect on a variety of issues affecting the community, and employment is just one of them.

And we know this because, last year – and for the three years preceding it – we now have more deaths per year than births as a community. So that replacement population, that future workforce, is just not there.

Ticker: What are some things Northwest Michigan Works is doing to address the issue?
McCauley: There are a couple of things. One, and I forgot to mention this earlier as one of the reasons for a labor shortage in our area: We have been part of an opioid crisis for a number of years, and it has taken a lot of people away from the labor market. And that’s prime working age adults, primarily men. We’re currently working with a couple of other rural regions in the state on an opioid and employment program.

We’re also working with area companies on opportunities for on-the-job training and apprenticeship programs. Maybe the workers out there don't have the right skills right now for employment needs, but can we provide that skill-building and education within the community so that people are more likely to stay here?

Ticker: Local businesses are trying everything to fill positions – higher wages, signing bonuses, bringing in foreign labor, offering housing. And then when businesses still struggle to find people, they’re doing things like reducing hours of operation. What advice would you have for employers that are at a loss?
McCauley: I think there are really three main areas that we can look toward to increase workforce. Of those three, two of them we can affect locally. One is to look to older people, and to provide consideration and provide workplace environments that might be more conducive to older individuals.

The second thing that we can impact locally is to think about how we support families and children. As we look into the future and look at the trend line for the region [in terms of aging demographics], it's going to be more and more important that we have kids around that have familiarity with the region and have familiarity with its businesses. Young people who have family connections here are more likely to stay in the region and in the community – or ‘boomerang’ back – when the time comes. So to be more kid-friendly – whether we're talking about our education systems or our daycare systems – things like that are longer-term solutions to our labor issues.

The third item, and I leave this to our friends in Washington, D.C., is immigration. Immigration is a way –whether we're looking at temporary immigration, or longer-term – that nations can use to grow their workforce. But that’s a highly politicized topic, and one that will be built almost wholly by Washington.

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