By 2011, statewide unemployment had grown beyond 13 percent. Prior to that, the state’s unemployment rate had never exceeded 10.9 percent, a high reached 30 years before, during President Reagan’s first term in office.
As of July 2016, Nevada unemployment was down to 6.5 percent, according to new data from the Bureau of Labor Statistics. At face value, that suggests the economy has improved markedly from the recent historical lows.
However, a new analysis by the Nevada Policy Research Institute questions the extent to which the drop in nominal unemployment truly signals an economic recovery.
A key factor behind any apparent reduction in the state’s unemployment rate actually appears to be a mass migration out of the state’s labor force. More Nevadans than ever are neither employed nor willing to look for work. Thus the labor force participation rate — below 63 percent — is the lowest on record.
Businesses across the state are feeling the effects of that diminished labor force. Their experiences contradict the conventional wisdom — that Nevada’s still-elevated 6.5 percent unemployment rate means a large, accessible supply of people are seeking work.
Notwithstanding generous starting wages of $15 per hour in some cases, employers nevertheless have struggled to attract and retain qualified workers.
Jeff Ecker, who operates Paymon’s Mediterranean Café at two locations in Las Vegas, sees a major difference between people seeking work in the years following the 2008 collapse versus those seeking work after previous recessions.
“Generally, the applicants have been much less qualified, less experienced than we’ve seen in the past,” said Ecker. He manages 36 to 38 personnel at each location.
“The overall presentation and professionalism among applicants has also suffered. It’s common now for applicants to walk in the door with poor hygiene, wearing sandals — just totally unprofessional and seemingly unaware or apathetic to it.”
Sam Chamberlain, vice president of D&D Roofing and Sheet Metal in Sparks, agrees.
“The labor pool is severely diminished,” he said. “It’s becoming more and more difficult to find qualified employees.”
D&D Roofing has been in business for 39 years and normally maintains a staff of about 140 employees, he says. The company offers starting wages of $14 per hour for employees with no prior construction experience, and $15 per hour for even minimally-experienced employees.
Yet hiring in recent years has been an ongoing issue.
“Even when we recruit and hire people,” said Chamberlain, “they tend not to be around that long. We turned over 80 employees in 2015 alone.”
Ecker, too, notes the revolving-door dynamic.
“Not only is the [labor force] participation bad, but many people that apply don’t show up for interviews and most newer hires don’t give advance notice when quitting. It’s virtually an epidemic here in Las Vegas,” he told Nevada Journal.
Were it not for several well-tenured employees hired before the recession, Paymon’s — which specializes in Greek, Italian, Persian, Middle Eastern, Indian and Vegetarian dishes — would be under even more pressure.
“In the past, we would post a position and get dozens of qualified applicants,” Ecker says. “Now, if we post a vacant cook position, for example, we’re lucky to get one or two applicants. And they usually aren’t even fully qualified.”
Chamberlain notes that after some employees successfully complete their first week of work at D&D — which comprises an informal training period — they then fail to show up for their second week of work.
“It seems like people want to be hired only to leave soon after so they can reap unemployment benefits,” he said. “Most shocking,” Sam continued, “is that upwards of 50 people we hired didn’t show up at all.” Read More: http://nevadajournal.com/2016/08/29/nevadas-shrinking-labor-force-br-view-inside-small-business/
© 2016, NEVADA JOURNAL | MONDAY, AUGUST 29, 2016 |