Low unemployment burdens county labor supply
Unemployment in the greater Mitchell area is too low.
According to Jacki Miskimins, regional workforce coordinator for the Mitchell Area Development Corp., higher unemployment could help Mitchell businesses overcome the state's workforce shortage.
"Everybody has a different view of what unemployment should be, but 4 percent is pretty healthy," Miskimins said. "At 4 percent unemployment, employees have options and they are enough in demand that they can find a good fit for them."
In the most recent unemployment report from the South Dakota Labor Market Information Center, Davison County's unemployment dropped to 2.6 percent in August and hasn't hit 4 percent since March 2012. The 2.6 percent unemployment rate leaves Mitchell businesses with 295 locals to draw from.
With such low unemployment numbers, the Mitchell region is struggling to find suitable candidates for hundreds of open jobs. Miskimins said approximately 500 jobs are available in Mitchell and about 600 are available in the greater Mitchell area.
Of the jobs available in the region, many listed by the Department of Labor and Regulation offer wages greatly exceeding minimum wage. Some of the available positions listed on the Department of Labor's employment listing includes jobs for welders, commercial truck drivers, architects and registered nurses.
The challenge in Mitchell, and throughout the state of South Dakota, where unemployment lies at 3.2 percent, is finding people with the right skills for the positions.
"It's hard for me to name a job we don't have open," said Miskimins.
Miskimins said unemployment well below 4 percent, as is the case in Davison County, makes it difficult for employers to fill both highly skilled and entry-level positions that are readily available in the region.
Miskimins said there is always a portion of the workforce that is not a good fit for various reasons, including work ethic concerns and the inability to pass a background or drug test. When you start to drop below into the 2 to 3 percent range of unemployment, it increases the percentage of labor pool that isn't a good fit for employers, Miskimins said, calling this scenario a "dysfunctional economy."
Dipping into that portion of the labor pool in an attempt to fill positions can also have a direct impact on consumers. The struggle to find employees or the need to hire workers who may not be a good fit can alter the service customers receive.
Aside from an effect on customer service, Miskimins said low unemployment limits the potential for growth in the region.
"A robust job market, where employees can find good positions and employers can find good employees, is a signal to other businesses that Mitchell is a good bet," Miskimins said. "Too-low unemployment jeopardizes that."
One of the underlying causes of the workforce shortage in Mitchell is regional population. Even in comparison to South Dakota, which also faces a labor shortage, Davison County's population increased by 2 percent, while the state averaged 4.8 percent growth from 2010 to 2014 according to the United States Census Bureau.
Part of the Mitchell region's nearly stagnant population rise could be attributed to one key figure from the Forward Sioux Falls Workforce Sustainability Analysis. According to a recent report, Davison County is the second-largest outside source for the labor supply in the state's largest city, at 560 people. Miskimins said keeping those people in the Mitchell area would limit the effect of the workforce shortage in the region.
"Nobody wants to say, 'Gee, we want more unemployment,' but we definitely want more people," Miskimins said.
The population retention effort has been spearheaded by the recent collaborative community marketing for the city of Mitchell, which states that the city is "outside expectations."
While the marketing campaign for the Mitchell region gets underway, the MADC is working on other ways to address the workforce shortage. The organization will be redesigning its outreach materials for people interested in making Mitchell their new home. Miskimins will also be reaching out to local businesses to get a more detailed picture of the regional labor needs, to get a stronger sense of direction for workforce development.