Michiana’s tight job market isn’t going away any time soon

Help wanted posters are still plentiful throughout the region and many employers are looking for workers to fill vacancies.

And that shouldn’t change anytime soon.

Conservatively, 200,000 or more workers died during the pandemic, the rate of voluntary quits rose about 25% from pre-pandemic, and some estimate that 1.6 million people were forced out or to work less because they suffer from lingering health problems as a result of the long COVID-19 ― which, according to the CDC, has affected one in five adults.

The shrinking supply of workers has meant employers are paying more to fill positions, which means companies able to offer better wages and benefits have been in a much better position to fill vacancies. than those involved in lower-paying jobs in retail, restaurants and hotels, for example.

“I think the job market has improved, but it’s a mixed bag,” said Jeff Rea, president and CEO of the South Bend Regional Chamber of Commerce. “Companies that pay competitive wages and benefits have far less difficulty than those that offer less.”

And workers are willing to drive for those jobs.

Economic development officials say about 18,000 people leave St. Joseph County every day for jobs across the region, and the vast majority — about 14,000 — travel to Elkhart County for often better jobs. paid in recreational vehicle and boat manufacturing plants.

The RV industry in particular has shown recent signs of slowing down a bit from the peak of the pandemic in 2020 and 2021, when consumers flocked to dealerships in search of safe recreational options during the height of COVID-19. .

Tight labor market:How local businesses survive.

Although still high by historical measures, the RV Industry Association has reported reduced levels of shipments to dealer lots over the past two months, and factories have responded by cutting hours and jobs or closing altogether. factories.

The most recent industry forecast calls for RV shipments for 2022 to be between 537,800 and 561,900 units with a very likely year-end total of 549,900 units, down 8.4% from to 600,240 shipped in 2021, but still enough to be the second best year ever. for industry.

Strong competition

The more cyclical nature of the RV industry is one factor that may help some local employers such as Steel Warehouse in South Bend attract and retain workers, said Charles von Herrmann, vice president of human resources at the company.

“We’re pretty consistent and offer competitive pay and great benefits,” von Herrmann said. “But even still, there is a shortage of millwrights, electricians, plant operators and other skilled trades as many have left the workforce due to retirements.”

Unless there is a deep recession – which is considered unlikely by most economists – it could become even more difficult to find employees for at least the next few years, as new employers move in. in the region, creating more competition for workers.

Construction of the Amazon facility continues on Monday, April 4, 2022 in Elkhart.  The company will need 1,000 people to staff two new facilities next year.

Amazon is expected to hire about 1,000 workers for an 800,000 square foot fulfillment center it plans to open next year along Indiana Toll Road in Elkhart County. The company announced that it would offer employees an average starting salary of $18 per hour as well as benefits.

And Ultium Cells, a partnership between GM and LG Energy Solution, said it would need 1,600 workers if it goes ahead with its plan to open an electric vehicle battery plant in western Canada. St. Joseph County near New Carlisle by 2025.

The company, which plans to make a decision on the location of the 2.5 million square foot plant in the coming months, said jobs at the plant will cost an average of about $47,000 a year, would provide full benefits and a clean, air-conditioned work environment. .

A company official also said Ultium would not actively oppose organizing efforts if it decided to build the proposed $2.4 billion plant here. And if it decides to do so, the massive plant could attract other related businesses to the area, according to economic development officials.

While winning the Amazon facility and potentially the Ultium plant is great for the region, it’s the kind of news that can send shivers down the spine for those involved in restaurant, hotel and business hiring. other parts of the service industry.

Pressure on employers

With the labor market already tight, von Herrmann is struggling to determine where these workers will come from.

“There are so many very powerful forces at work that it’s almost impossible to predict the workforce situation,” he said. “But looking at the availability of people now, you have to wonder if additional demand for labor could end up emptying some family shops.”

It could happen, said Michael Hicks, an economist at Ball State University. But the low supply of labor and the resulting upward pressure on wages has also forced companies to look for ways to increase productivity or resort to other creative measures to cope. .

Some restaurants, for example, have chosen to stay closed when there aren’t enough customers to justify the labor costs. Retailers have installed self-service checkout lines, fast-food restaurants are using self-service kiosks for ordering, and many hotels have eliminated daily housekeeping for guests staying multiple nights.

seismic changeWorkers want higher wages, more flexibility

“Employers are going to have to pay a lot more to get the labor they need,” Hicks said. “I see continued tensions for employers, especially those who are more dependent on low-wage workers.”

Andrew Butters, an economist at Indiana University’s Kelley School of Business, said the tight job market has given employees – especially those looking to change jobs – the kind of power they don’t. haven’t seen in decades.

Businesses will have to continue looking for ways to use automation and other technologies to offset the tightening labor market due to the pandemic and an aging workforce, he said.

“It’s a problem that’s not going away anytime soon,” Butters added.

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