Low unemployment in Washtenaw County sounds like good news, but it also brings a set of unique challenges for both job-seekers and employers.
"I don't think the low unemployment rate is a good measure," says Rich Chang, CEO of Ann Arbor-based NewFoundry and the organizer of a Washtenaw County workforce pipeline summit. "The measure I'd like to see more economists and others using to gauge how we're doing is who is above the cost of living."
The county's unemployment rate in December was 2.2%, the lowest it's been since 2000. However, Chang cites statistics compiled by the United Way of Washtenaw County that show that nearly a third of county households meet the definition of "Asset Limited, Income Constrained, Employed," often abbreviated as ALICE.
A variety of other factors facing the county's employers and their workforce during this period of low unemployment include an aging demographic, the need to retrain workers to fill jobs that didn't exist 20 years ago, and the challenge of retaining good employees who have other options.
"An interesting dilemma"
Changing demographics are part of the issue, says Bill Sleight, director of Michigan Works! Southeast. Trends indicate that Southeast Michigan's population is stagnating.
"Fairly soon, in the next couple of years, deaths will exceed the number of births every year, and that's not a great situation to be in if you want to grow the economy," Sleight says. Both attracting new talent and retraining Michigan workers will be part of the solution.
"When unemployment was at 15%, all we wanted was jobs. At 2.5%, now we want people," Sleight says. "It's an interesting dilemma we're in."
Sleight says the "skill sets employers need are changing rapidly, but by and large, workers are not prepared for those changes, and that's a problem for all of us as we try to grow our economy."
Upgrading skills can be tricky for employers and employees alike, Sleight says. When unemployment is low, the people looking for work don't necessarily have the skill sets employers are looking for, so organizations like Michigan Works! are attempting to "work with companies to find creative ways to train people."
"You're probably not going to take two years to go back (to school) and get the credential you need if you have to feed a family," Sleight says. "But on-the-job or shorter-term training might be a better option."
One program along these lines was the Going PRO Talent Fund, a state program that provided up to $1,500 for an employer to assist in training and developing their employees. The program's future is currently uncertain due to state budget negotiations, which Sleight says he's "disappointed" by.
"What we liked about it, and what companies liked about it, was that it gave us and them an opportunity to improve the skills of the existing workforce… and do it while the employees were on the job," he says. "That increased workforce potential across all sectors at a relatively low cost per person."
Beyond upgrading skill sets
The so-called "skill gap" is only one part of the equation.
Angela Barbash, owner of Ypsilanti-based values investing firm Revalue and the MC for a recent panel discussion about barriers to employee retention, says that when unemployment is low, employee retention can become a challenge.
"The marketplace is so competitive that employees will go to another company to get a quarter per hour increase in pay," she says. "A quarter is not much in the grand scheme of things, but it's a lot to lower-wage workers."
Chang notes that companies often come into a community asking for, and receiving, huge tax breaks, but then go on to pay their employees minimum wage. Those minimum-wage employees typically have to bear additional burdens of commuting into work, and the expenses of insurance and gas.
"The companies are reaping the tax benefits but aren't giving back to the community," he says. "I'd love to see a 30% or 40% tax break over 10 years where a percentage of that goes to the community," including issues like improving transportation, child care, and affordable housing options.
Angela Peat, an Ann Arbor-based freelance agile technology specialist, says "skills gap" is "absolutely the wrong word, the wrong mental model for what the reality of the future looks like."
"A skills gap implies that you're done after you close it. But that's something that's never going to be closed," she says, emphasizing that employers and employees must focus on life-long learning.
"It's about putting in systems and supporting employees and the larger ecosystem in a totally new way," Peat says. "What we need is good-quality community-level and state-level resources and programs that help support retraining and learning in a far deeper way than we ever have before."
Peat recently listened to a podcast that estimated that only 30% or 40% of the jobs a current high school student may have in the future exist right now, because technology and the workforce are changing so rapidly.
"That's mind-blowing," she says. "You're in high school and people ask, 'What do you want to do when you grow up?' but only 70% of (their) choices exist."
Another area where systems are not yet in place to fit the new workforce reality is around the new "gig economy" and workers generating multiple income streams, Peat says.
"People like the flexibility, but they're not going to get a lot of coverage (that large corporations provide), like worker's comp or health care, and that's problematic for individuals moving forward," she says. "And often people don't know how to manage multiple income streams."
Barbash says she prefers to refer to the skills gap as "growth opportunities," and that it's companies' responsibility to expose employees to those opportunities. She says business owners also need to realize that people change and need new challenges over time, and that younger generations especially want their work to align with their values.
"In the new workforce, with millennials and Generation Z, they're bringing a greater focus on the importance of mission and values and culture," Barbash says. "These generations want to know that the company they're working for is having a positive impact on the world around them and the company is engaging the workforce in that mission and impact."
Sarah Rigg is a freelance writer and editor in Ypsilanti Township and the project manager of On the Ground Ypsilanti. She joined Concentrate as a news writer in early 2017 and is an occasional contributor to other Issue Media Group publications. You may reach her at firstname.lastname@example.org.
All photos by Doug Coombe.