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State labor market tightens up

Posted: May 21, 2014 - 10:38am

If you’re out for dinner in a restaurant this summer, you may find the wait-time for your meal is a little longer.

Seasonal employers say they are experiencing difficulties in hiring certain types of workers — kitchen staff for example — as the tourist season begins.

Bruce Bustamante, vice president for Princess Tours, says his company is having no problem with the “front-end” needs such as customer service, baggage handlers and front-desk staff, mainly because Princess conducts an aggressive pre-season recruiting in the state. However, there are difficulties recruiting for the back-end kitchen staff, Bustamante said.

Operators of larger seasonal hotels in outlying areas are feeling the pinch more, but it’s being felt in urban restaurants as well.

Even Anchorage’s iconic Moose’s Tooth Pizzeria, where business seems to be roaring summer and winter, has had challenges this spring, but solved the problem by raising wages in the kitchen, said Dan Fiacco, the company’s general manager.

There is still a problem retaining skilled kitchen staff, however, because workers in that field tend to be highly mobile, he said.

Bill Popp, president of the Anchorage Economic Development Corp., agrees the labor market is tight in Anchorage and hiring problems are being found for many restaurants and retailers in Anchorage.

This is being aggravated by the opening of several new restaurants and retail outlets like Hard Rock Café and Cabela’s. The rebound in the tourist industry will keep things tight.

“Retail has exploded,” Popp said. “We’re up 400 jobs so far this year, and ‘leisure and hospitality’ (restaurants and bars) are up 350,” compared with the same period of 2013.

Popp also said wage inflation, at least in Anchorage, tends to aggravate things. The state’s oil and gas industry is booming and the ripple effects of that spreads all through the economy, the effect being that workers in fields with more modest pay scales are drawn to higher-paying jobs.

Other factors in the Anchorage economy are also at work, such as the shortage of affordable housing.

“Anchorage is the 20th most expensive housing market in the nation. It takes an income of $40,000 a year to afford a one-bedroom apartment,” he said.

That takes most retail and food and beverage workers out of the rental market, unless there are two incomes in a family, because the average wage for a retail worker was $29,400 a year in 2013. For a leisure and hospitality worker, it was $21,250 a year in 2013, according to state labor data.

“Finding good workers in these fields is very challenging, unless you’re willing to pay more,” Popp said.

Fried acknowledged the problem but downplayed its broad significance, and said spot labor shortages have happened before.

“It is a tight labor market and our unemployment is very low, but this is not a new thing,” he said.

What is a surprise, however, is that Alaska is not seeing the level of in-migration that the state has experienced before, which plays into the labor market. Last year, in fact, there was net out-migration.

There are always people moving to and leaving Alaska but in 2013 about 2,800 more people left the state than came to Alaska, Fried said. In 2011 there was net in-migration of 1,215 and in 2012 there were 1,118 more people coming to the state than leaving.

“The U.S. job market is still not that great, and we’re surprised that there are not more people coming here from the Lower 48,” Fried said.

In previous periods of U.S. recession, in the 1970s and again in the 1980s, there was substantial in-migration of people looking for work, but not this year, he said.

“One factor is that our wage is not a premium anymore,” at least compared with many states, Fried said, particularly the west coast states Alaska tends to draw from. 

For large seasonal employers like Princess Tours, finding, hiring and in many cases training about 3,000 seasonal workers very spring is difficult. Princess is doing fine this year in staffing for its needs in the major cities, where there are many repeat workers from year to year, but finding people for lodges in outlying areas like Denali Park is always a big challenge, even though the company provides housing.

Bustamante said Princess aggressively recruits in Alaska at job fairs and works with the King Career Center in training young people for workers in the visitor industry. These efforts generally result in about a third of Princess Tours’ seasonal workers being Alaskan.

The percentage of job applications from Alaska is about 29 percent, Bustamante said, but the company typically hires about half the Alaskans who apply, he said.

Julie Saupe, president of Visit Anchorage, said, “Every year it’s tough. We hear anecdotes of problems, but everyone seems to be getting the people they need,” at least in Anchorage.

What is on peoples’ minds in the visitor industry, however, is the prospect of major industrial projects drawing away workers. Although it is several years away, Saupe said many local hotel and restaurant owners are looking at the possible construction of a major gas project with dread, fearing the loss of employees like happened during the TAPS oil pipeline boom of the 1970s.

Even though construction of a major gas project might not begin until after 2019 if it appears to be proceeding many developers of smaller projects will push their schedules forward to get in front of the big project, which will dominate the economy.

 

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

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