The Southwest Michigan Labor Force is shrinking—again!
After consistent post-pandemic growth in the number of people actively working or seeking jobs, MIWorks observed more workers ‘dropping out of the race’ in October. In a ‘big picture view’, the job service and training agency said four percent fewer workers are in the Labor Force now than three years ago, prior to the pandemic. That means that 5,400 fewer workers are available to fill job vacancies in Berrien, Cass and Van Buren Counties than in October, 2019, prior to the pandemic.
Almost 1,700 headed for the sidelines in just a month (September to October, 2022), a 1.3 % decline in the three-county workforce. Only a fraction of those people were in the hospitality sector, which normally slows down in the fall. And they were not balanced out by the expected increase in retail employment usually driven by the coming holiday period.
What happened to those workers over the past three years? Where have they gone?
MIWorks says an unusually high number chose to retire, probably at an earlier age than they might have otherwise. The rapidly changing conditions and the challenges of the pandemic caused many to simply say, “I’m done!”
The second factor, and a very significant one, according to MIWorks, is ‘Women Leaving the Workforce’, largely driven by a lack of affordable childcare in the region. The agency describes Berrien, Cass and Van Buren counties as a “childcare desert”, focused on the urban areas of Benton Harbor and Niles. The result is that employable female workers choose to stay home with their children, rather than join the workforce utilizing weak or undependable childcare options.
A related reality further driving the workforce decline is that many workers were forced by the pandemic to make ends meet on one income in a household. While they didn’t like it, they found they could do it. And, so, facing the possibility of a lesser job, due to a lack of skills or training, or of substandard childcare due to a lack of availability, they’ve chosen to continue to ‘tighten the belt’ and exist on one income vs. two.
MIWorks spends a lot of its time working with employers looking for workers. And those employers remain frustrated. There were almost 43 % more job postings in October than three years ago, pre-pandemic. Employers are finding they must increase wages and benefits to compete for talent—and they are doing exactly that. However, in October, there were still considerably more vacancies than job seekers in Souithwest Michigan (6,146 to 5,320).
Caleb Colp, who analyzes the numbers for MIWorks, also observed that workers are no longer ‘getting ahead’ financially, as they were for a time during the pandemic, when they spent less and built up personal savings. Colp said the personal savings rate has declined and consumer credit is going up, suggesting it’s only a matter of time until consumers must cut back spending in order to pay off those credit cards. Of course, that economic cool-down is part of the Federal Reserve plan to control inflation while avoiding a deeper recession.
A bright spot in today’s update from MIWorks was that job training programs are having some success in helping people find jobs that can turn into careers. Agency CEO Todd Gustafson had special praise for Eagle Technologies of St. Joseph, which runs a successful apprentice program (highlighted several times in recent months on MoodyOnTheMarket.com). Gustafson said that when employers consistently offer workers training, competitive wages and benefits and a career path, they’ll be rewarded with quality job seekers eager to be developed.
Gustafson added that today’s quality job seekers also are attracted by the ‘higher mission’ of the firm they choose to work for. “Are you out to change the World, or do you just make widgets?”, as Gustafson put it. Job flexibility is also high on the priority list of many potential workers. They’ve gotten a taste of ‘working remotely’ and ‘flexible work weeks or schedules’ and they will continue to seek those options in their future work positions.
Gustafson said MiWorks has actively worked with over 1,000 employers over the past year in efforts to place workers and train them.
