Valley’s Jobless Rate Is Low, While Population Rises
The job market in the Chippewa Valley – and the nation – is strong, thanks in part to a historically long economic expansion. While this has translated into near record-low unemployment, it hasn’t necessarily led to big growth in wages, a local labor market economist says.
The United States is currently in its longest economic expansion on record: As of June, the economy had grown for 120 consecutive months. Meanwhile, the nationwide unemployment rate was 3.6% in May – the lowest in 50 years.
At 2.6%, the May jobless rate was even lower in the Eau Claire metro area, which consists of Eau Claire and Chippewa counties. While that was slightly higher than it was in May 2018 – when it was 2.4% – historically speaking it is still extremely low.
“There’s got to be a natural floor to that somewhere, but as of just yet we haven’t found it,” Scott Hodek, an Eau Claire-based labor market economist with the state Department of Workforce Development, said of the jobless rate. “We’re seeing some of the lowest unemployment rates we have ever seen” – levels last achieved 20 year ago during the dot-com boom of the late 1990s.
Likewise, the labor force participation rate – the share of all people age 16 and older who are working – is also high. “We don’t have a lot of unattached folks just kind of sitting out there,” Hodek said. “Because even if you have a barrier to employment these days of some kind, it’s never been a better job market.” For example, more employers are willing to look past applicants’ criminal records, while others are doing away with drug tests and lowering entry requirements.
Overall, however, wage growth has been relatively slow regionally as well as nationally. According to a study released late last year by the Pew Research Center, paycheck growth over the past 40 years has barely kept pace with inflation.
“That’s been one of the head-scratchers of the whole recovery,” Hodek said. “We know that everyone’s desperate for labor, yet we’re not necessarily seeing (wage growth).” Some of this is due to lower-cost international competition, Hodek said, but some is just because of constraints on how much employers can pay: If employers paid engineer-level wages for unskilled laborers, for example, they would soon go out of business.
As the economy chugs along, so does job growth in west-central Wisconsin. In the nine-country region – which includes the Chippewa and St. Croix river valleys – an estimated 26,400 jobs will need to be filled annually in the decade between 2016 and 2026, according to Department of Workforce Development estimates. Hodek said job growth continues in the Chippewa Valley’s biggest employment clusters, such as health care, education, and manufacturing, as well as information technology because of firms such as Jamf Software.
But open jobs aren’t necessarily “new” jobs: more often then not, they are jobs that have been vacated when people switch careers or retire. “A lot of what we’re seeing right now is from those exit,” Hodek said.
The retirement of baby boomers continues to impact the labor market. In some smaller communities and rural counties, this means a shrinking labor force. However, Hodek expects that the labor force will remain steady, if not grow, in urban areas such as Eau Claire.
In fact, according to the most recent state estimates, three of the nine fastest-growing counties in the state are in the west-central region. St. Croix County’s population grew an estimated 5% between the 2010 census and 2018, while Eau Claire County grew 4.1% and Chippewa County grew 3.4%.
Such demographics changes are critical to the region’s continued economic growth. “These days, if you’re talking to site selectors or whoever, it’s about talent,” Hodek said. “The first thing is, do you have workforce? And if we have population growth.” In addition, the Chippewa Valley’s workforce is still relatively young because of the region’s colleges and universities. While not all of these college students will stay in the region after graduating, some of them will.
“This region’s got kind of that demographic gold mine of these sort of workforce entrants that we can either market to and keep or bring back,” Hodek said, “and that involves asking them what they would like in a place to live.”