On March 23, the Bureau of Labor Statistics released its economic report updating unemployment rates. In what appears to be bright economic news, the rate of unemployment was lower in seven states and stable in 43 more. The national rate was 0.6 percent lower than a year ago.

According to the BLS, Hawaii had the lowest unemployment rate (2.1 percent) followed by New Hampshire (2.6), North Dakota (2.6) and then Maine (2.9). That is correct, Maine ranked in the top five.

For Maine, that percentage equates to 679,700 people that are employed inside of a labor force of 699,700 people.
Additional good news for job candidates is that companies from many fields are offering signing bonuses.

Take for example Portland police offering $10,000 sign-on bonuses, (note you qualify even if you have toked up a time or two); Maine State Prison is offering $5,000 sign-on bonuses for psychiatric nurses; and Lee Auto Malls is offering $2,500 for an auto body technician, to name but a few.

Current job searches on local websites reveal six pages of truck driving positions and literally hundreds of open wait staff positions. Forget the impact of the $10 minimum wage for now, most job advertisements left minimum wage in the rearview mirror.

Generally speaking, a drop in the rate of unemployment suggests that the economy is growing, which is good news for all Mainers. However, before we get too excited, it is also important to consider that low unemployment can have a very negative impact on local businesses and the community in general.

Clearly it is great news that more people have an opportunity to join the labor force, while others have the ability to find more compatible work environments. But a smaller labor pool and increasing wages also affect the hiring dynamic.

How businesses will deal with the shortage of capable workers and the rising costs associated with increasing wages will be on the forefront of what CPAs will be dealing with over the next few months. Some businesses will attempt to pass the increased costs onto consumers; big box stores may make you wait longer for customer service.

More tech savvy employers will find ways to automate tasks so that fewer human hands will be needed. Unfortunately, others will not be able to adapt and will go out of business.

What looks like a feast for employment seekers will certainly turn into headaches and much higher costs for you and me. It doesn’t take a Ph.D in economics to imagine that if businesses cannot find workers, we consumers ultimately pay the price.

So, this summer, while waiting for my waiter to take my dinner order, I will remember the doldrums of 2010-11, when double digit unemployment forced many of my favorite establishments to close. I won’t get angry that my bill will be higher, service slower, and if my bartender looks a little high himself, I will let him know that he could still qualify for that Portland PD bonus.

 

filed under: