NY Times: March 26, 2000
Many Companies Are Forced to Dip Deeper Into Labor Pool
By LOUIS UCHITELLE
K ANSAS CITY, Mo. -- Unable to find enough workers in the booming
economy, American corporations are trying to expand the labor pool.
Until recently, employers had met their labor needs by hiring
people who were already employed or at least wanted to work. But as
this pool shrinks, they are increasingly recruiting from among the
36 million working-age people in the United States who had not
sought a job, or even thought about taking one.
The gender gap, the difference between a candidate's votes from men
and his votes from women, in presidential elections since 1980.
[jobs-labor.1.GIF]
The New York Times
Percentages may not add up to 100 because of other candidates.
Based on exit polls conducted by Voter News Service in 1996, Voter
Research and Surveys in 1992 and The New York Times and CBS News in
1980, 1984 and 1988.
_________________________________________________________________
Conrad Bell is one of these new workers. Mr. Bell, a college
junior, did not need a job. Living at home, he had enough pocket
money, and the first payments on his school loans were still in the
future. But when a notice went up on a school bulletin board that H
& R Block was hiring students skilled in computers to trouble-shoot
problems called in from Block offices around the country, Mr. Bell
applied and got one of the jobs. "Most of my friends now work," he
explained.
The company has gone out of its way to accommodate the 23-year-old
student, juggling schedules so that he can carry four courses at
the DeVry Institute of Technology and still work 25 hours a week.
Between semesters, he worked on Tuesdays, then switched to Mondays
to attend Tuesday classes. Nearly 200 other students hired for the
tax season get similar flexible treatment at Block's new technical
center here.
In addition to students like Mr. Bell, companies are stepping up
recruiting of the urban poor, retirees, housewives, men and women
mustering out of military service, the handicapped, women coming
off welfare and illegal immigrants not already counted in the labor
force. People with jobs are being recruited to moonlight in second
jobs, and part-timers are adding hours more easily than in the
past. To get workers, some companies even relocate to pockets of
relatively high unemployment.
The recruiting poster and the promise of flexible hours were what
landed Mr. Bell despite his mother's resistance. "She does not want
me to work while I'm in school," he said. Aside from flexible
hours, companies are offering subsidized transportation, child
care, store discounts, free meals, family outings, tuition
subsidies, and, in one case here, an $80,000 softball field --
everything, in sum, but significantly higher pay.
"We really are in uncharted territory," said Lawrence Katz, a
Harvard University labor economist. "The last time we had such
tight labor markets, in the 1960's, the baby boomers were beginning
to take jobs, and they fed the labor pool. We don't have them
today, and we really don't know how many people we can draw."
The economy may ride, or fall, on the the answer.
Alan Greenspan, chairman of the Federal Reserve, argues that the
pool of people still available to take jobs has dwindled to the
point that employers will have to pay more in wages to compete for
workers and then will push up prices to cover the higher labor
costs. Citing this inflationary danger as one reason for their
actions, the Fed's policy makers have moved interest rates up a
quarter percentage point five times since last June to slow the
economy, with the latest increase coming last Tuesday.
But Mr. Greenspan's estimate of the number of people still
available for jobs relies on the Labor Department's monthly
employment surveys, which do not count as available the people who
say they are not interested in working. Many of these people are
now being recruited, including Mr. Bell, who was busy being a
student until he saw the H & R Block poster and popped into the
labor force. In addition, the Fed chairman's concerns about
inflationary labor shortages do not reflect the extent to which
workers are settling for intangible benefits, rather than higher
wages.
Certainly inflationary wage increases are not evident in national
wage statistics or in the Kansas City metropolitan area, where the
unemployment rate of 3.2 percent is nearly a percentage point less
than the nation's 4.1 percent and employers are offering all the
new lures, short of big raises.
That is especially the case at Block's recently opened technology
center. A quarter of the 800 people working there in the tax season
are students like Mr. Bell, who is earning $11.54 an hour, barely
up from last year's rate. Another 200 are low-skilled customer
call-center operators, some of whom commute by municipal bus from
an impoverished neighborhood nearby. H & R Block has put the new
center, and its jobs, near enough for the operators to get to a
job, one that pays $8 to $9 an hour, good pay in their world.
"We have not been pressured to raise wages because of the labor
shortage," said Frank L. Salizzoni, the company's chief executive.
Even some officials in the Clinton administration, despite its
hands-off policy vis-à-vis the Federal Reserve, are challenging the
Fed's view that an inflationary labor shortage is developing.
Martin Bailey, chairman of the president's Council of Economic
Advisers, said, "We don't see wage pressure coming from the labor
market at this time." More bluntly, the labor secretary, Alexis M.
Herman, declared in a recent interview: "I tell everybody Alan
Greenspan is a wise man, and I don't comment on Fed policy. But
this is a balanced economy that can continue to perform at a very
solid and steady pace."
Part of the difference lies in how the experts tally the number of
available workers. Ms. Herman counts at least 13 million people
across the nation available for jobs, including 3 million part-time
workers who have told surveyors from the Bureau of Labor Statistics
that they would take more hours if they could get them.
Mr. Greenspan's more conservative estimate of 10 million people
available for jobs leaves out the part-timers. He focuses on the
nearly six million people who are listed as officially unemployed
because they are actively looking for work, as well as four million
others who tell the bureau's surveyors that they have not looked
for work lately but would like a job or might like one in the right
circumstances.
Mr. Greenspan's estimate of 10 million would-be workers has
declined from 13 million in January 1996. But both his estimate and
Ms. Herman's miss those who are not thinking about working but can
be lured into jobs.
The great majority of them are the 36.3 million civilians between
16 and 64 who are busy in other activities and see themselves as
not available for work, unless, like Mr. Bell, a company's lures
change their minds.
In Kansas City's poorest neighborhoods, the statistics miss
hundreds of families "who don't respond to surveyors or answer the
door or any of that stuff, but want jobs," said Clyde McQueen,
president of the Full Employment Council.
The council is a publicly subsidized organization that tries to get
people in poor neighborhoods into jobs, mainly by training them and
then paying for transportation, including bus fare to H & R Block's
new center and similar job sites. "The first thing people here want
to know," Mr. McQueen said, "is what is the shift time, does the
bus get there and what happens if I have an emergency at home."
Nowhere in Kansas City is the sweep for new workers more on display
than at Station Casinos, a gaudy, Las Vegas-style hotel and casino
complex that is the biggest of the four casinos along the Missouri
River.
The casinos opened in 1997, and almost overnight 5,000 new jobs
appeared in greater Kansas City, a considerable impact on a work
force that then numbered 916,000 and now numbers more than 965,000.
The casinos initially bid up wages, offering low-skilled workers
$7.50 to $9 an hour. That drained people from other employers,
including customer call- center operators at Sprint, then earning
less than $7 an hour.
"We lost a lot of folks to the casino boats," said Mary M. Hogan,
manager of Sprint's call center in suburban Lenexa, Kan., "but it
is not an issue now."
Sprint has raised its starting pay to $8.25 an hour. It has also
eased the wage pressure by employing more college students and
offering them nonwage benefits like flexible part-time schedules
and tuition subsidies of $5,250 a year if they stay at least that
long. Station Casinos, employing 2,120 people, has also
soft-pedaled wage increases.
"More and more we compete on the whole package," said John V.
Finamore, president of the casino.
Apart from health insurance, that package includes a child care
center, 10 percent discounts at local merchants, free meals once a
month served by executives, gifts at Christmas, a talent show for
employees and their families and, most recently, the softball
field.
"These are soft labor costs that are much more easily absorbed than
fixed wage increases and can be shed more easily," Mr. Finamore
said.
To find workers, Station Casinos uses specialized employment
agencies that recruit immigrants from Latin America, Africa,
Russia, Vietnam, Cambodia and elsewhere. Ninety employees came out
of retirement and 270 others work at the casino as a second job,
often as weekend blackjack dealers earning $15 an hour, most of it
in tips.
For a while, the casino's vans brought people from poor
neighborhoods to work in the hotel, but now a municipal bus --
known as the Casino Cruiser -- makes the run every half-hour.
"You cannot compete on wages," Mr. Finamore said. "All you do is
raise the bar across the city."
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