Business leaders in Texas keep saying they're struggling to hire qualified workers

Business leaders in Texas once again said they are struggling to hire qualified workers in the latest Texas Manufacturing Outlook Survey released monthly by the Dallas Federal Reserve.

The report includes anonymous comments from survey respondents working in various manufacturing industries regarding how their businesses are doing.

Most respondents detailed various setbacks due to Hurricane Harvey in September. But some also said they continue to have a hard time finding qualified candidates.

Here are some choice quotes from the report:

  • “The storm caused the need for repairs in the refinery. This backlog of field and shop work repairs will last 30 to 60 days. We cannot hire enough qualified people to fill the need for this time period,” one respondent from the fabricated metal product manufacturing industry said.
  • “There is a labour shortage in Central Texas. We are unable to find qualified candidates. This is a factor among most American manufacturers I speak with,” a respondent in the miscellaneous manufacturing industry said.
  • “We are having issues with our North American production due to a shortage of labour and are transferring more production to China,” said another in the food manufacturing industry.

Respondents have long pointed to a shortage of quality labour. (A respondent in the July 2016 survey once said, “Entry-level candidates cannot read or follow instructions. Most cannot do simple maths problems. What is wrong with the educational system?”)

Theoretically, the idea of labour quality becoming a pressing issue for employers suggests the job market is moving from a period of weak demand after the Great Recession to one of tight supply. And that, theoretically, points to higher wages for workers. The basic thinking is that when employers have a hard time finding quality workers, they end up having to shell out more money to attract them.

That last part, however, doesn’t seem to be happening. The Dallas Fed manufacturing survey data suggests that September saw faster employment growth and longer work weeks, but “wage pressures” held flat.

The employment index came in at 16.3 in September, which was its highest level since April 2014. The hours worked index rose by 4 points to 18.4. And 28% of firms noted net hiring, while 11% noted net layoffs, according to the report.

The wages and benefits index, however, was “essentially unchanged” at 26.4.

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