September 17, 2022 | Filed under: CareerSource Broward News
Via the South Florida Sun-Sentinel
It wouldn’t be a stretch to say that last week was a banner period for workers in Florida and elsewhere around the nation.
Within days of each other, several events demonstrated how much leverage workers appear to wield in today’s job market:
- Hard Rock International and Seminole Gaming announced they are spending $100 million to lift pay for 95 job classifications to between $18 to $21 an hour for thousands of hotel casino and restaurant workers.
- The owners of the Diplomat Beach Resort in Hollywood avoided a walkout by agreeing to a three-year contract with 450 unionized workers who would see their minimum hourly pay go to $20 at the back end of the agreement.
- National freight railroads avoided a crippling strike by agreeing to 24% pay hikes for tens of thousands of workers over five years and liberalized attendance rules.
And on Friday, the Florida Department of Economic Opportunity announced another round of rock bottom unemployment rates statewide and in most counties, along with record numbers of job postings. The Fort Lauderdale metro area jobless rate was 2.8% for August, while the rate in Palm Beach County was 2.9%. The rates are a far cry from the double-digit jobless rate when COVID-19 broke out in 2020.
Practically every industry that is important to South Florida is experiencing job growth, from leisure and hospitality to trade and transportation to construction, manufacturing and financial services.
Inflation may cut the advantage
Despite the upsides, there continues to be a restiveness across the job market as employers in growth-minded industries are still experiencing a hard time attracting and keeping talent. And a push for higher wages may soon clash with surging inflation, which in turn could lead to a recession and a slowing of the red-hot job market.
The aggressive appearance of inflation to the COVID-19 economic recovery scene raises the question as to whether the newly acquired wage gains will be enough to keep household balance sheets on the plus side.
William Luther, an economist at Florida Atlantic University’s College of Business, said new labor deals such as the one cut by the railroad unions may not be enough if inflation stays high.
“That 24% pay increase would perhaps help them catch up,” he said. “But it will only do so if inflation is sufficiently low over the next five years.”
In late August, CareerSource Broward, in a detailed analysis of the county’s job market, said inflation looms as the economy’s “biggest concern.”
“With prices on average rising over 8% in the last year, the Federal Reserve is scrambling to slow down price increases,” according to the study’s executive summary. “This will ultimately result in rising interest rates, leading to a decline in consumer spending and business investment.”
There are other signals pointing toward a “recession sooner than later,” the study said.
National and state consumer confidence has fallen about 25% from a year prior. And Broward’s job market may be nearing “peak employment.”
“Active job postings are near all-time highs as employees can demand higher wages or change positions,” the study said. “Average hourly wages in Broward County have risen about 7% from last year.”
But Luther, the FAU economist, isn’t so sure that the long lists of open jobs support the idea that workers have a real upper hand.
“There are a lot of job openings at the moment and that makes it appear as though workers have a lot of bargaining power in the labor market,” he said. “Many of those openings were posted at a time when nominal spending was surging. But the Federal Reserve has since vowed to bring that nominal spending growth back down to put a lid on inflation.
“I suspect at least some of those job openings are never going to be filled,” he said. “They shouldn’t have been posted in the first place.”
Keeping elusive talent
Although inflation looms. employers remain flummoxed by a continuing “Great Resignation” by workers who are aggressively seeking better working conditions from a reported hyper-supply of jobs that outstrips the number of available qualified workers.
“When we talk about the Great Resignation, we do know there are alternatives for workers that are now feeling confident to take a look at where they are,” said Carol Hylton, executive director of CareerSource Broward, the federally funded agency that helps match workers with employers. “They are taking the opportunity to advance their wages because there is a shortage of workers.”
The trend has left many employers in a tough spot, analysts and business development leaders say.
While job growth is surging in South Florida as companies relocate to the region in unprecedented numbers, the talent pool isn’t matching the demand.
John Wensveen is chief innovation officer at Nova Southeastern University in Davie and executive director of the Alan B. Levan NSU Broward Center of Innovation.
A key challenge for new businesses at the center, whether they’re startups or newly arrived existing businesses, he said, is helping them acquire the skilled talent they need.
“This is a subject I deal with every single day,” he said. “There is an abundance of talent in South Florida, but there is a lack of skilled talent in South Florida. This ‘great resignation’ has really amplified it and made it more problematic.’
“We have a lot of individuals that are eligible for work across industry sectors but they don’t have the skills and qualifications that industry demands now and in the future.”
Analysts see a high level of worker movement from company to company for salary and workplace culture reasons. Some are dropping old careers for new ones such as hospitality workers moving into finance or real estate.
Siri Terjesen, associate dean and professor of entrepreneurship at Florida Atlantic University’s College of Business, said inflation has led to more workers taking second part-time jobs to supplement their full-time employment.
“Although there were always people working two jobs, this is now more prevalent to protect against inflation,” she said. Some people are holding two full-time jobs with different employers.
Still other full-timers are starting “side hustle” ventures either inside or outside their own industries.
Finally, Terjesen is seeing workers converting their side hustles into full-time ventures.
“One form that this could take is an individual who leaves full-time paid work as an employee and then becomes a contractor to that same firm and potentially other firms,” she said. “This is likely to be more common in married couples where one spouse can provide the benefits while the other can experiment. This phenomenon may be more common as employers call for a return to work and employees believe that they could continue with their own company.”
Communication between employers and workers is also spotty when it comes to reaching accommodations for what’s needed during the COVID era. For employees it’s more flexible working arrangements. For employers, it’s how to rebuild profit margins that were lost to the pandemic.
Greg Barnett, a data analyst at Energage, a Philadelphia human resources consultancy, suggested the high velocity of employee movement has driven employer-employee engagement levels to their lowest he’s seen over the last three years.
“When I talk to leaders they are exhausted, burned out and stressed,” he said. “They don’t have the answers. They still have the bottom line they have to hit. ‘Our job is to grow the business and there is a shortage of staff,’ that’s what I hear.”
Many can’t give workers the four-day work weeks and other non-financial benefits they’re seeking.
“That’s the tension that exists right now,” he said. “Employees are getting more leverage but employers are faced with their own challenges right now. With shortages of labor and people moving around, it doesn’t make it easy for them.”
Wages climbing higher
Easy or not, organized labor leaders are not wasting time pressing employers for more money.
Wendi Walsh, secretary treasurer of Unite Here Local 355, the union that negotiated a new contract with the Diplomat Beach Resort, said low hospitality wages will not stand for long.
“Those days are gone,” she said. “If you want to attract any people for any of those jobs, the wages have to be significantly higher. A cook is now starting anywhere from $18 to $24 an hour. Cooks are in extremely high demand. We operate a culinary training academy and those graduates get hired in a heartbeat. The wages for cooks have escalated very quickly.”
“Similarly, for a housekeeper, no hotel is going to hire a housekeeper for less than $17 an hour in this climate, and that number will keep going up pretty quickly,” Walsh added.
Rates and benefits costs are climbing in construction too, said Peter Dyga, president and CEO of Associated Builders and Contractors, Florida East Coast chapter. He said employers are trying to sweeten the pot for job candidates.
“People are looking at how we can make our benefits packages more attractive,” he said.
“It’s a very difficult market for people in the construction industry.”
That includes “some combination of pay increases or more innovative fringe-benefit packages. There are companies that are doing some combination of all of these things. Because of the challenge [employers] face finding people.”
The apprentice option
Some companies are developing their own workers through apprenticeship programs offered by public agencies, unions and industry associations.
Kathleen Hagan, co-founder and chief operating officer at FHG Marine Engineering Inc. in Fort Lauderdale, said her firm turned to a Marine Industries Association of South Florida program to help develop talent.
“There is a shortage of tradesmen, especially skilled labor,” she said. The company needs people “who can work holistically,” turn wrenches, and produce professional work at a high level.
Hagan said there’s a widening industry age gap between veteran workers who have reached retirement and newcomers who have limited experience.
The association program, which is funded by federal money that passes through the county, lasts two years and results in apprentices receiving certifications and on-the-job training.
Caitlyn Cano, a welder from West Palm Beach, is wrapping up her two-year program at FHG as a field technician who works on diesel engines.
“I’m definitely learning a lot with this apprenticeship, a lot of things I couldn’t get from a standard education out of school that I would pay for,” she said. “I’m paid pretty well now. Things are pretty good.”
“I like being out on the water,” she added. “I like working on the engines.”
Apprenticeships also build loyalty.
When her program ends soon, Cano won’t be casting a net to find work at another company. She plans to stick with FHG.
“I think I’ll stay with them,” she said. “They’ve helped me a lot. I’m grateful and want to give back to the opportunity they gave to me.”
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