Local governments and economic-development groups traditionally have spent money and time trying to grow their economies by poaching businesses from somewhere else. Then came the Covid-19 pandemic and, with it, the widespread growth of remote work. Suddenly, local groups began zeroing in on remote workers, offering them bonuses and tax breaks to relocate. The pandemic’s upending of the job market isn’t done yet, though. With workers now in short supply and companies scrambling to hire, business groups, governments, and development agencies are focused on finding in-person workers. They’re looking to big cities that have fared badly during the pandemic, offering experienced workers promises of lower taxes, better lifestyle, higher pay, and even, in some cases, cash offers.
Driving the new trend is a decline in the labor-force participation rate—that is, the number of adults either working or actively searching for jobs. The rate, which has been declining in the United States for years, dropped sharply at the outset of the pandemic as industries shut down and governments offered unprecedented levels of unemployment pay. Even with the tapering of those benefits and the reopening of local economies, America’s labor-force participation rate remains today a full percentage point below where it was pre-Covid. At the same time, the pandemic has sparked what some describe as the Great Resignation—a willingness by workers to leave their current jobs in search of better pay, often in new areas of the country. A recent poll found that 44 percent of those working right now are “job seekers.” Not surprisingly, half said they sought higher salaries, but a significant minority said that they would leave without a boost in salary, suggesting that other intangibles like lifestyle are also important in the post-Covid era. The result: a nationwide scramble for workers.
The predicament of manufacturers illustrates the problem. Industrial firms have added back only about one-quarter of the jobs the sector lost during the past two years, and many firms say they simply can’t find new workers. In Racine County, Wisconsin, home to some 350 industrial firms, two local economic-development groups have combined efforts to roll out a promotion dubbed the Digital Manufacturing Campaign. Its aim is to draw skilled manufacturing workers from the nearby greater Chicago area. Workers in the Windy City are a tempting target because Illinois manufacturing employment, after a steep decline in 2020, remained flat last year. By contrast, Wisconsin industrial firms added 8,000 jobs in 2021 and are growing even faster in the first months of this year. Much of the campaign emphasizes not only job opportunities but also a superior quality of life and lower costs in the Racine area. Though the effort is new, the idea is not. Five years ago, the head of a Wisconsin manufacturing group—citing a poll showing that nearly half of Illinois residents were considering leaving the state—suggested that Wisconsin firms could take advantage of the growing discontent within the Prairie State. The pandemic has helped make the idea a reality.
Workers in big cities are a logical focus of such campaigns. Covid and the problems it has engendered, such as rising crime, have already sparked migration out of America’s largest urban areas. One rising metro area, Nashville, is intent on luring the most talented of these departing workers. Though technology jobs are increasingly associated with remote work, the Greater Nashville Technology Council has begun an outreach campaign to attract in-person tech workers from America’s biggest cities. Called TechIntoNashville, the six-city ad campaign was rolled out in the fall, directing its message to workers in Boston, Chicago, New York, Los Angeles, Silicon Valley, and Washington, D.C. The push touts the fact that Tennessee has no state income tax, Nashville’s shorter commute times than bigger cities, mild weather, and a famous music scene. The aim of the campaign is to double the number of tech workers in Nashville over five years to meet the needs of companies rushing to open there—including Amazon, Oracle, and NTT DATA Services.
High-profile work at tech firms or specialized manufacturing positions aren’t the only jobs going begging these days. Even hourly employees at retailers and in the hospitality industry are in short supply. South Dakota has one of the nation’s lowest unemployment rates at a mere 2.5 percent, and its stores can’t find enough workers to hire. A trade group, the South Dakota Retailers Association, has taken the unprecedented step of offering out-of-state residents $1,000 if they will move to the Mount Rushmore state and work in retail. The money, which new workers can collect after six months on the job, is in addition to any pay and bonuses retailers themselves might offer. With no state income tax and a low cost of living, the state generally hasn’t needed to offer incentives of this sort, but these are extraordinary times.
It also helps with recruitment if you’re a sovereign nation, free from state laws. The Oneida Indian Nation was able to reopen its Verona casino in upstate New York back in 2020, well before other operators of hotels and resorts got back in business, thanks to its special status. Then it got busy recruiting service workers, especially those laid off at other resorts around the country, including Disney parks. With help from county development officials, Oneida offered jobs with benefits and relocation assistance to about 30 Orlando-area residents, then turned its attention to luring unemployed hospitality workers from New York City. The hospitality industry has been among the nation’s hardest-hit, including casinos, which cut nearly half of their jobs during the pandemic. Still, operators are scrambling for workers. Earlier this year, the Oneida’s Turning Stone Resort Casino held a job fair, looking to hire hundreds of new workers. The offer included a $1,000 signing bonus.
The news is filled with stories these days about governments and development groups offering incentives to remote workers to relocate. Those moves represent a kind of icing on the cake—new sources of income that cities and states weren’t even chasing just a few years ago. But the in-person worker shortage is something else entirely: a crisis of recovery that won’t be easy to solve. Expect more outreach and more regional battles over on-site workers in the months, and years, ahead.
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