“The job market is rip-roaring,” says Mark Zandi, Moody’s Analytics’ chief economist. The economic report released by ADP and Moody’s Analytics on April 4, 2018, beat analyst expectations for manufacturing job growth for the month of March. Private sector payrolls were anticipated to increase by 205,000, but rose a whopping 241,000, the largest single month increase in 3 years. In addition, the February number was revised up to 246,000 from 235,000.
President Trump ran a campaign that was adamant about bringing manufacturing jobs back to America. The recent growth was spurred on in large part by midsized private companies. Across the board job increases were seen in construction, professional business services and trade, transportation and utilities. With a job growth averaging over 200,000 per month for the last 5 months, a tight labor market is getting even tighter.
Source: ADP Institute
According to PNC economist Gus Faucher, “The U.S. labor market is in excellent shape in early 2018. With the economic expansion set to become the second-longest in US history, approaching nine years, the job market has fully recovered from the Great Recession.”
A double edge sword is found in Midwest states like Iowa, where there are too many manufacturing jobs, and too few applicants. Legislation has provided funds for funding training programs, however high school classes are shrinking in size, thus not providing enough new hires for the increasing demand. Other Midwest states, like Indiana and Wisconsin, are facing similar situations.
Looking at the Labor Department data in the chart above, it is staggering to think that if every unemployed person in the Midwest was placed into an open job, there would still be more than 180,000 unfilled positions. The 12-state region is the only area of the country where job openings outnumber out-of-work job seekers. According to Dave Zrostlik, president of commercial truck manufacturer Stellar Industries Inc., based in Garner, a rural city of about 3,000 people near Mason City, “The crux of the problem is that we don’t have the people here.”
Unless demographic projections change, this labor shortage will not end soon for the Midwest. From the migration to Florida and the Carolinas beginning in the 1970’s, population has shifted to the coasts, where approximately half of the nation’s citizens will live in 2020. The Midwest has seen an outflow of people. A net 1.3 million people living in the Midwest in 2010 had left by the middle of last year, according to U.S. census data. David Swenson, a regional economist at Iowa State University hits it on the head. “More job training programs are a “solution to a problem that doesn’t exist,” he said. “Thinking that it’s going to solve rural labor issues is misguided.” It has come to the point where Iowa is attempting to attract the disabled and ex-convicts to grow the job pool in particularly rural areas.
Maybe it all boils down to lifestyle preference; sun or snow! The mantra of manufacturing in the Midwest is not jobs, jobs, jobs, but people, people, people.