Apple, Amazon plan to hire as new report points to shortage of workers at all skill levels

By David Pendered

The huge plans Apple announced Wednesday for expanding its workforce in the United States could run into the brick wall of a talent shortage for low- and high-skilled workers, based on a Federal Reserve survey of the economy released Wednesday.

First Data, fintech

Atlanta-based First Data is a significant business in the financial technology sector, and reports 24,000 owner-associates and operations in 36 countries. Credit: firstdata.com

All 12 Federal Reserve districts reported tight labor markets, typically at the lower and higher ends of the skills section, according to the Beige Book released at 2 p.m.

Atlanta and the rest of the Southeast is in the thick of the labor shortage.

Even as Gov. Nathan Deal talks about pulling out all the stops to lure Amazon to open its second headquarters somewhere in metro Atlanta, business leaders who provide their insights to the Federal Reserve say they can’t hire enough quality workers.

Amazon has said it intends to create as many as 50,000 high-paying jobs to work at a campus that is to cost more than $5 billion to build and equip, according to a page on its website. Georgia has submitted an undisclosed package to Amazon, and it is among a total of 238 proposals the company has received from cities and regions in 54 states, provinces, districts and territories across North America, according to amazon.com.

On the heels of Amazon’s announcement, Apple on Wednesday revealed its own lofty expansion plans.

Apple said it would pay $38 billion in taxes on its overseas cash amount of $252 billion in cash or cash equivalents, according to a report in wsj.com. Apple said it would create more than 20,000 jobs in the U.S. to staff some $30 billion in new facilities.

The story did not indicate whether Apple has any notion of where it will find a domestic workforce to meet its needs. Likewise, Amazon has not indicated how it will find appropriate workers for its new facility with a trendy name – HQ2.

That said, here’s the how the new Beige Book characterizes the labor situation over the past several months in the Southeast, a Fed district that encompasses Alabama, Florida and Georgia, and portions of Louisiana, Mississippi and Tennessee.

Note that employers did not view higher wages as a solution to their hiring woes:

  • “[T]he top constraints to hiring were a desire to keep operating costs low and an inability to find workers with requisite skills. A number of contacts continued to describe challenges filling and retaining highly-skilled/ specialized and low-skilled/entry-level positions. To find and retain workers, firms continued to broaden their geographical search for candidates and develop or expand training programs.”

The Southeast isn’t alone in making such a report. Here are examples from other Fed districts:

  • Boston – “Contacts in many sectors cited tight labor markets, but only modest wage increases, if any. … Software and IT service contacts … noted shortages for technical roles such as engineers were getting worse.”
  • New York – “The labor market has been steady and tight. … Businesses across all industries have had increasing trouble finding qualified workers….”
  • Philadelphia – “In one of the District’s tighter labor markets, a staffing firm reported that wages had risen 4 percent over the year, while various firms from that same market noted that they were very busy, but the lack of qualified labor was constraining their growth.”
  • Cleveland – “The main labor-related challenge reported was attracting and retaining workers for low-skills and, to a lesser extent, middle-skills jobs.”
  • Richmond – “On balance, the demand for labor increased modestly in recent weeks, but several firms indicated that hiring was constrained by the tight labor market.”
  • Chicago – “Contacts continued to indicate that the labor market was tight, with difficulties filling positions at all skill levels. Hiring was focused on professional and technical, production, and sales workers.”
  • St. Louis – “Contacts continued to report difficulties finding experienced or qualified employees. Construction contacts in Louisville and Little Rock reported labor shortages, while manufacturing contacts reported difficulties hiring for both skilled and unskilled positions. Labor demand in Missouri was particularly high in healthcare services, leisure and hospitality, retail, and wholesale trade.”
  • Minneapolis – “Limited labor supply also continued to hamper hiring. ‘Every business we talk to, they can’t hire enough workers,’ said a western Wisconsin banker. A transportation company executive said it was failing to see growth because it can’t find drivers. A manufacturing firm in southeastern Minnesota said it consistently had 40 openings to fill, and was losing out on available work because there were “not [enough] people to take the jobs.” A central Minnesota finance company announced layoffs of 130 workers, said a local source, and other “companies were already discussing hiring the potential labor.”
  • Kansas City – “The majority of respondents in the services sector re- ported labor shortages, including shortages for commercial drivers, skilled technicians, and service workers.”
  • Dallas – “Labor market tightness continued in most industries and across a wide range of positions, with several contacts saying difficulty finding workers was constrain- ing growth to some extent. Numerous contacts cited rising labor costs, with some noting acceleration over the past couple of months.”

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

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