FINDING GOOD WORKERS: Finding the Best Solution for Montana.

• Author: Barkey, Patrick M.

Attend almost any gathering of business people and the topic is sure to come up--finding good workers. After more than a decade of economic growth that has featured strong hiring and steadily falling unemployment rates, labor markets across the country and certainly across Montana are tight. For some the supply of suitable workers for their openings has shrunk to the point where they are questioning how they can continue to fill orders, let alone capitalize on new opportunities.

The data agree with this assessment--at least to a point. The Montana unemployment rate has been below 4 percent for more than two years, with jobless rates for fast growing places like Gallatin County down to an incredible 1.9 percent. At the height of the recession there were more than seven unemployed workers for every job opening in the Western region of the U.S.--now there are fewer than one.

But the story isn't quite this simple. Conventional definitions of unemployment don't count those not looking for work. When taking into account all working age adults, whether in the job market or not, more slack exists than official unemployment rates indicate. Some places in Montana and some subpopulations are faring better than others. Some types of jobs, most notably skilled construction trades, face more acute shortages than others. And through it all we have a quiet revolution in how job candidates and companies find out about each other.

As economic problems go, you might say this is a good one to have--too many jobs, shall we say. But it is a problem nonetheless, and some solutions (e.g., offshoring, turning down business) are worse than others for the economy. Understanding how and why it has come about is critical to crafting strategies and solutions that grow the economic pie.

The Longer View of Tight Labor Markets

A growing economy soaks up unemployed workers--this has been a fundamental part of the economic cycle for as long as data have been recorded. Today's tight labor markets certainly bear witness to that, but other forces are at work as well. The cycle of demographics is not well understood by many but its impacts on the labor force are far reaching. Changes in migration of workers and families, both within and from outside the country, have given areas that attract those new residents a distinct advantage. And the preferences and desires of our newest generations--the millennial and the Gen Z's that follow them--present daunting challenges and...