As local, state and national unemployment rates continue to fall, economists are wondering whether a labor shortage will be far behind.
And with the local unemployment rate falling lower than the rest, a local economist is wondering whether northeast Indiana could face an even more acute labor shortage than other regions.
Ellen Cutter, director of the Community Research Institute at IPFW, has studied the numbers, including for the Fort Wayne metropolitan statistical area. It had a relatively low August unemployment rate of 4.1 percent compared with 5.2 percent for the U.S.
"While we have market conditions that have resulted in a tight labor market, we are not yet at a notable competitive disadvantage with regard to national dynamics," Cutter wrote in her third-?quarter Allen County business dynamics review, which was released Tuesday. "However, we may be approaching that position soon."
Rock-bottom unemployment rates mean the jobless have an easier time finding work and workers can demand higher pay. But some employers can’t expand aggressively because they can’t find skilled workers.
The local job market would have to get significantly tighter to push local wages on par with national ones.
Average annual wages in Fort Wayne’s MSA were $40,722 last year, a 2.7 percent increase over the previous year, according to Cutter’s report. That total lagged significantly behind national data in raw numbers and in growth.
The U.S. average annual wages last year were $51,364, a 3.1 percent increase over 2013.
Fort Wayne’s MSA includes Allen, Wells and Whitley counties.
Cutter cautioned that the falling labor participation rates recorded since April 2000 don’t take into account that baby boomers have started retiring in droves. Even so, Fort Wayne MSA data show almost 30 percent of workers age 65 to 74 are still in the labor force. Almost 10 percent of those older than 75 are still working.
Looking at workers age 16 to 24, employment has increased from 2008 to 2014. Cutter noted that data for the age group have a high margin of error, but it’s significant that the numbers outpace what’s happening on the national level.
A local decline in the labor force participation rate for workers age 45 to 54 is sharper than national trends.