Life in a State Where Jobs Sprout Like Rows of Corn
With the lowest jobless rate in America, Nebraska offers a unique window on the economy
Arnell Hall is out of work.
But the bronzed construction worker isn't worried about making car payments or putting groceries on the table.
"The question isn't, 'Can you find a job in Omaha?' " says Mr. Hall, who recently quit his $20-an-hour job as a laborer with Hicks Construction Co. to look for something a little less arduous. "The question is, 'What kind of job do you want?' "
Welcome to employment nirvana on the Great Plains. While the national jobless rate has sunk to its lowest level in a quarter of a century, workers in Nebraska are reveling in an unemployment rate that's half as much: 2.3 percent, the lowest in the US.
As Federal Reserve policymakers meet this week to determine whether the country needs another interest rate hike, the Cornhusker State offers a window on how much verve the US economy has - in terms of wage-driven inflationary pressure - and on life where jobs are as abundant as maize.
Hall, who began his job search a
Where Workers Can Be Choosy
few weeks ago, says he has received several offers but is holding out for more money. "I don't expect to make [as much] in my next job, without a college degree. But I shouldn't have to take a big pay cut. Not here."
Not now. The Nebraskan economy is doing too well. In the cities and suburbs, the telemarketing and food- and data-processing companies here are prospering and expanding. There isn't a large manufacturing base, but farming is important. And those who till the soil for a living are poised to harvest the biggest corn crop since 1936, according to press reports here this week.
In the measured parlance of the Kansas City Federal Reserve Bank's regional economic survey in June: "The strong farm economy is benefiting many of the district's rural communities. Bankers reported strong farm equipment and auto sales in the first half of the year. Most other Main Street businesses are also benefiting from the stronger farm economy."
It's a situation that gives Nebraskans, like Hall, an opportunity to cherry pick their jobs.
Laura Chartrand, who moved here from Chicago, makes $8.50 an hour doing light housekeeping for a senior's home-care service. She also has rejected several job offers. "I don't have to take just any job," she says. "I know I can always get a job making what I'm making now. But I need more money, and I know I can get it."
After four years of the lowest unemployment rate in the nation, there is pressure to raise wages, particularly on entry-level jobs. Workers in the Omaha-area made an average of $12.67 an hour last year, nearly $1.50 more than the national median pay.
"What you've got here in Omaha is a classic supply-and-demand situation, with the workers on the demand side of the equation," says Terri Miller at the Greater Omaha Chamber of Commerce. A recent chamber study showed that 65 percent of local companies had trouble finding qualified workers.
Since the federal minimum wage was upped to $5.15 an hour last fall, Amy Ryan, part owner of the family-owned Pizza Shoppe here, says she has begun to hear demands for more money from workers who already are earning more than the minimum wage.
"They expect to get raises quicker because they are closer to the minimum-wage line," says Ms. Ryan. "If we don't pay them what they want, they can go somewhere else and make more money," she says. "And they're probably right."
But unskilled workers aren't the only ones benefiting. Workers with computer skills or even blue-collar talents, such as plumbing and carpentry, can command up to 25 percent more in salary here, Ms. Miller says.
"If you've got a few years experience in a computer-related field, you can start anywhere from $22,000 to $35,000 a year in Omaha," she says. "If you're already making that much in another city, you could probably move here and get a $10,000 raise. It happens all the time."
The scarcity of workers is not a new dynamic in a state that has about four times as many cattle as people. "Nebraska, like most states in this region, has always had a tough time attracting workers from other states to the region because of the perception that, right or wrong, it's cold here and that there's a lack of cultural diversity and entertainment," says Ernie Goss, an economist at Creighton University in Omaha.
Nebrasakan firms have worked hard to attract workers from elsewhere. Candidates can fill out a job application over the Internet or with a toll-free phone call. Companies roam job fairs around the country and offer extra vacation time, signing bonuses, and health-club memberships. One Omaha telemarketing firm offers employees a $100 bonus for every referral that's hired.
Since 1990, the state's population has grown nearly 4 percent. But it's becoming harder to draw new workers into Nebraska as unemployment rates drop in other states, says Professor Goss.
And low unemployment is starting to impede the creation of new jobs. Some Omaha-area employers are already looking outside the state to expand. Two major telemarketing companies here, have opened offices in other cities, saying they could not find an adequate supply of qualified employees locally.
"People think that because we have such low unemployment that everything's great," MIller says. "But having everyone working can scare away potential employers, and, in the long run, that's going to hurt."
With one of the nation's tightest labor markets and highest standards of living, Nebraska's economic success is drawing national attention.
* Unemployment is lowest in the nation at 2.3 percent.
* Exports have tripled since 1990.
* The rate of personal income growth is 7.4 percent (vs. a 4.5 national average).
* The largest employers are Iowa Beef Packing, First Data Resources (financial securities) and Union Pacific Railroad Co.
* Corn planted exceeds 9 million acres - largest crop since 1936
* More than half the population of 1.6 million is involved in nonfarm employment.