Low unemployment in Nebraska: Workers thrive, businesses get by

Harry’s Wonder Bar is a trusted dive bar in Nebraska’s capital, frequented by office workers, construction workers, and grad students alike: the kind of wood-paneled place with a pool table in the back where the phones usually they stay in your pockets, a second fiddle to casual conversation. , and the beer mugs come ice cold no matter what the season.

As a half-dozen happy hour patrons gathered at the bar on a recent afternoon, most had one remarkable thing in common: They all seemed to know someone who had gotten a significant raise, or multiple raises, in the past year, and many All, if not all, had themselves received a jump in pay.

That included the evening shift waitress, Nikki Paulk, a quiet woman with a flash of pink hair. “I’m in high demand, baby,” she said, mentioning “desperate” employers with a smile. “I’ve worked in like six bars in the last six months because I keep getting better offers that I can’t turn down.”

the unemployment rate in nebraska it was 2.1 percent in February, tied with Utah for the lowest in the nation and near the lowest on record for any state. In several counties, unemployment is below 1 percent. Even accounting for adults who have left the labor force, the part of the population Employed 16 and older in Nebraska is about 68 percent, the highest figure in the nation.

After decades of stagnant wages and incomes, the ebb and flow of power between managers and their workers appears to be tilting, at least temporarily, in the direction of work, with employers competing for workers rather than the other way around. Unemployment in states like Indiana, Kansas, Montana and Oklahoma is nearly as low as Nebraska, testing the potential benefits and costs of an economy with exceptionally tight labor markets.

Ms. Paulk, 35, graduated from college with a degree in graphic design during the Great Recession, when jobs were scarce. She recalls working 60 hours a week close to minimum wage in Illinois, “being excited to find a quarter” that could go to the laundry. In 2013, she moved to Nebraska and took a job doing medical data entry for $12 an hour.

He started working as a bartender in 2018, and since then, he says, his total pay has more than doubled to $25 (and sometimes $30) an hour, including tips.

the unemployment rate nationwide in march it was 3.6 percent, almost back to pre-pandemic levels that were the lowest in half a century. The particularly low unemployment in Nebraska is in part attributable to its higher than average the high school graduation rate and the dominant role of industries such as manufacturing and agriculture, which are less volatile than the service or energy sectors during recessions. Even at the peak of the Covid-19 shutdowns in the spring of 2020, the state unemployment rate was 7.4 percent, half the national number.

However, the job market in Nebraska can also bode well for the country as a whole. Most economists expect headline unemployment to continue to decline this year. Job openings are near record levels, and unemployment rates in January were lower than a year earlier in 388 of the 389 metropolitan areas evaluated by the Bureau of Labor Statistics.

Many business analysts argue that if labor remains tight, wages will grow too fast, and employers will continually pass on that increased spending to consumers. For now at least, evidence for such a spiral is scant: Federal Reserve data shows that average annual wage increases they are within the range (3 to 7 percent) that prevailed from the 1980s to the 2007-2009 recession.

The Fed, still worried, has started to raise interest rates to cool down the economy and control inflationary pressures. Supply chain challenges that arose during the pandemic have persisted, and the war in Ukraine is further complicating the outlook for inflation, as well as overall economic growth. Consumer spending remains buoyant, but surveys reflect dour economic sentiment among the public.

Meanwhile, even as price increases upset family budgets, burying the value of some new wage gains, a sizable mass of employees and job seekers are gaining more leverage over benefits and terms.

During a virtual summit on the local economy held in February by the nonprofit group Leadership Lincoln, Eric Thompson, director of the Office of Business Research at the University of Nebraska-Lincoln, argued that the job market may simply be rebalancing.

“Obviously, it’s always better to be the employer than the worker, or at least it usually is,” he said. But the current environment makes it easier for some employees to change jobs or compete for higher-level positions. Local employers are waiving degree requirements for a variety of entry-level and mid-level roles.

Many fast-food restaurants, struggling to staff anywhere near the state’s $9 minimum wage, have begun offering starting wages of $14. Evidence of automation is as rampant as Help Wanted signs: Some pharmacies that dot major roads and highways appear to have more self-checkout kiosks than employees at any given time.

Thompson said such moves weren’t necessarily ominous for the working class, but rather a reflection of the need for companies to adapt as workers find jobs that can “maximize their skills and potential.”

Tony Goins, a former JPMorgan Chase senior vice president who was appointed by Gov. Pete Ricketts in 2019 as director of the Nebraska Department of Economic Development, said the tight job market could prompt managers to be more flexible and innovative.

“At the end of the day, the market dictates that I have to pay employees more money,” said Mr. Goins, a small business owner with a cigar lounge in Lincoln. “So, I mean, how are you going to make up for that?” To remain competitive in hiring, he said, managers must improve culture, leadership, employee retention and recruiting.

He spoke of his son, an assistant men’s basketball coach at Boston College, a position he says requires ongoing outreach as well as the dual promise of “the opportunity to play for a winning program” and gain personal development. “That’s not what CEOs are used to,” he said.

Companies that aspire to grow have begun to offer incentives beyond payment. Japanese company Kawasaki Motors is investing $200 million to expand the 2.4 million-square-foot site in north Lincoln, where it makes jet skis, ATVs and rail cars. It is growing its 2,400-member workforce by more than 500 employees, with jobs primarily in manufacturing, welding, and assembly.

The company is becoming more flexible in terms of hiring and work styles to achieve this. “It used to take a couple of weeks to get hired at Kawasaki,” said Bryan Seck, his chief talent management strategist at Lincoln. “Now, it’s down to four hours.”

Knowing that many parents remain out of the workforce due to child care duties, Kawasaki recently created a 9 a.m. to 2 p.m. shift designed for those who need to retrieve children from school and daycare early in the morning. the afternoon. Starting wages are $18.10 an hour, Seck said, with benefits that include health care and a 401(k) plan.

In addition to raising wages to retain employees, Todd Heyne, director of construction for Allo Communications, a Lincoln-based cable company, said management decided easing in-person work requirements could broaden the pool of available workers. . That prompted the company to allow many of its customer service representatives and technical support employees to train and work further afield as it prepares to expand beyond Nebraska and Colorado.

Not all problem solving is easy. Added labor costs add to supply chain pressures that have increased the price of crucial materials like fiber optic cable by as much as 30 percent. Providers often charge 20 percent more for their contracted tasks. As a result, the company has taken steps such as hiring its own trucking staff.

In the end, “combined with some automation efficiencies, our team will see significant salary increases with less rudimentary work,” Heyne said, reducing manual paperwork, centralizing back-end systems and doing more to fix network problems for employees. clients remotely. So despite the cost challenges, “I have never been more optimistic about where we are sitting, our position in the market, how we compete against our competitors and our technology,” she added. “Which is weird.”

For many, the opportunity of this economic moment is tinged with concern. They include Ashlee Bridger, a 30-year-old student at the Lincoln campus of Southeastern Community University who works in management for the nearby firm Huffman Engineering after being recruited at a job fair.

Ms. Bridger left her job as a nurse to pursue a career in human resources because she felt confident enough to take a gamble on herself: “Of course, it was a risk. Leaving any career is. But in today’s job market, she said, “I knew I could move up more easily.”

She too has had a number of life milestones in her place. She will graduate in May with an associate’s degree and begin her undergraduate work in the fall at Nebraska Wesleyan University. Managers at Huffman have told her that she is welcome to continue working there as her schedule allows, and that they would like to hire her in a more senior position after she completes her studies.

Last year, she got married in the summer and then moved with her husband into a newly built house in Lincoln in August. Though they feel financially stable, he half-joked that they were lucky the house was mostly built before lumber prices skyrocketed. Now that prices have gone up across the board, “I’m more cautious with my spending,” she said.

Mrs. Paulk, the bartender at Harry’s who is prospering thanks to better pay, has friends and customers who are upset about the recent inflation. “But it’s kind of controlled out of our hands anyway,” she said with a shrug.

“All I know,” she added, “is that now I’m not broke anymore, it’s great. Life is good.”

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