Labor Shortages Cause Towns to Pay Residents to Move There

U.S.

In a sign of the times, several towns across the nation are offering new incentives to people who move there to live and work, the result of a trend going on for years that saw young professionals leaving small towns and suburbs for big cities. Now those towns and suburbs are facing a problem: open jobs but no one available to fill them.

The Great Recession of 2007 spurred the movement of younger Americans from rural areas to big cities. Since that time the population of 25 to 54-year-olds (workers in their prime years) has increased by 6% in large metropolitan areas. It stayed the same in small cities and fell in towns and rural areas, however.

In years after the recession the lower population levels didn’t pose a problem; jobs were scarce anyway. But with the economy now running at near-full steam, the problem is unignorable. The National Federation of Independent Business finds that small businesses rank labor shortages as their biggest concern for the first time in nearly twenty years.

Now towns and rural areas are introducing incentives, mainly financial, to lure young workers back.

Hamilton, Ohio is offering new residents $5,000 to help pay your student loans. Grant County, Indiana, will give people who move there $5,000 toward the purchase of a new home. North Platte, a city of about 24,000 in central Nebraska, is offering up to $10,000 to new workers who relocate there.

It’s all recognition that if these towns don’t address these problems the damage may become permanent.

Since 2010 employers in Hamilton had added more than 1,300 jobs. But Hamilton’s working-age population has fallen by 2,800. “If every company works on culture and trying to make it an attractive place to work, and the city is an attractive place to live, I think that things will happen,” said Dave Lippert, owner of Hamilton Caster & Mfg. Co, a firm that makes metal wheels and casters. “If we don’t, we’re not going to be around.”

Hamilton Caster was started by Lippert’s great-grandfather in 1907. He worries about what lies ahead though. Less than 25% of Lippert’s employees are younger than 37. He’s finding it so hard to find workers that he’s had to train several current workers to do multiple jobs.

Storefronts in the downtown area are now almost fully occupied. A decade ago, the vacancy rate was 98%. City leaders have converted older buildings into residential lofts in the hopes of adding more residents. Enlivening the downtown area, especially at night, will attract more young people to fill jobs they say.

The U.S. unemployment rate is currently 4.1%, the lowest it’s been since 2000. Economists predict an unemployment rate of 3.6% by next year, which would make it the lowest in fifty years. A trend that is likely to exacerbate employment-shortage problems like the kind Hamilton, Grant County and North Platte are facing.

“Low unemployment rates, everyone thinks of that as a good thing and it is, but there’s a downside,” said Mike Allgrunn, an economist at the University of South Dakota. “Eventually you run out of people to do the work.”

Photo by Hamilton, OH, Chamber of Commerce

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