...Swenson said a worker shortage is part of the problem. It’s hard to get people to move to Iowa or keep skilled workers from heading to states with higher wage opportunities. The shortage of workers makes attracting new businesses tougher, too.
Swenson said one would expect employers to start bidding up pay to compete more aggressively. He said average earnings are about 80 percent of the national average, and many rural Iowans work more than one job.
But Wells Fargo economist Michael Swanson said there are risks to recruiting with higher pay.
“If I start raising rates to attract new employees, I have to raise wages for everyone in my organization,” he said.First, I should say this is one of those things that we who criticize employers for low wages don't often take into account - it's not just the latest worker's pay, it's also everyone else's pay that needs to be calibrated to the new higher amount. That said, I don't think anyone has to worry that managers are losing sleep over how to make their new higher payroll:
Kemin Industries, an agricultural and biotech company based in Des Moines, isn’t raising wages much to deal with its worker shortage. Instead, Amanda Formaro, an HR director, said the company has stepped up recruiting and is looking at ways to help low-skilled workers get training.Well, it's a good thing they've found a solution. Heaven forfend they'd have to raise rates significantly.
*Truly, that is a remarkably low rate for U3 unemployment. Hard to say what the broader U6 measurement might be.