Some Iron Range companies worry about tight labor market
VIRGINIA (AP) — Unemployment rates on Minnesota’s Iron Range reached their lowest point since the turn of the century, but the tight labor market is making it challenging for local businesses.
Iron Range unemployment reached 4 percent in September, its lowest rate since 2000, on the heels of area mines gaining strength and solid performances in seasonal construction and tourism jobs, according to figures provided by the Minnesota Department of Employment and Economic Development.
Erik White, one of the agency’s labor market analysts based in Duluth, said September and October are generally the best months for job numbers. He told the Mesabi Daily News that the unemployment rate will tick upward in the winter when tourism and construction jobs are put on hold.
The tight labor market phenomenon, White said, has become increasingly prevalent in the state and regional job reports. On the Range, many of those jobs are often low paying and primarily part time or seasonal, according to a recently completed job vacancy survey performed twice a year.
The lack of job applicants can make it difficult for companies to attract and retain new workers, said Ray Smith, who heads a workforce development effort by the Department of Iron Range Resources and Rehabilitation and Minnesota State Colleges and Universities. It also doesn’t account for skilled workers that have left the workforce altogether or people who are unable to work, Smith said.
“In this region, when you get down to 4 percent or 5 percent,” he said, “what do you consider full employment?”
What frustrates Smith is the conversation at the federal level focuses on a skills gap in filling middle class jobs. That’s not the case on the Iron Range, where skilled workers are prevalent, but are often lured away to more lucrative mining jobs from local mid-sized manufacturers.
Low-skilled workers are often not enticed to fill open positions in retail, service and tourism industries, largely because of pay.
“Wages are sort of driving the day,” Smith said. “The skills gap isn’t here . it’s a wage gap.”