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Indiana city frets over long-term effects of having the lowest U.S. unemployment rate

AILSA CHANG, HOST:

While unemployment rates are hitting record lows all across the country, nowhere is it lower right now than in Elkhart, Ind. The city bills itself as the RV capital of the world, and at a rate of under 1%, some local leaders are wondering what if unemployment is actually too low? Indiana Public Broadcasting's Justin Hicks reports.

JUSTIN HICKS, BYLINE: You'd think a local unemployment rate of just 0.9% sounds great, right? But for Lucas Vicentini, plant manager at Marson International in Elkhart, it means he's having one heck of a time finding enough workers.

(SOUNDBITE OF MACHINERY BUZZING)

HICKS: Here they cut giant steel tubes and bend them into precise shapes. Those tubes go into everything, from trucks to RVs to motorboats.

LUCAS VICENTINI: So this is where it all starts.

HICKS: With RVs and boats seeing record-breaking sales, demand for his tubes is strong. Vicentini is also trying to market his company to some bigger clients that will require thousands of tubes. But that worries him because there's just not a lot of workers left here to help him meet any increased demand.

VICENTINI: This is a very hard trade to find in this town, and we have had a very hard time recruiting people for this position here.

HICKS: So for the first time, Vicentini is turning to automation. He's getting a big robot arm to do some of the more repetitive bending jobs. He says it's simply the only way he can keep up.

VICENTINI: It's one thing maybe if you're a stagnant company, but with our growth strategy, we want to continue expanding, and that's where the robots come in. We don't have too many people moving in here, so, I mean, it is going to be the only solution.

HICKS: The tight labor market is hitting employers everywhere, with workers having ever more leverage, even though here roughly half of all workers are in manufacturing and most have just a high school degree or less. So low unemployment means employers have to get creative. Leighton Johnson works at the South Bend Elkhart Regional Partnership, a local economic think tank.

(SOUNDBITE OF BELL RINGING)

HICKS: At a local lunch spot, he said many employers find it increasingly hard to hire for jobs that require more education or specialized training, so a lot of them have just given up.

LEIGHTON JOHNSON: They're telling us they can't find the workers, so many employers aren't even posting these jobs because - and some say it's a waste of time because you're not going to find workers with some of these skills.

HICKS: His group is urging companies that if they can't find the right worker, they can train one instead. But the timing for this is difficult. The wages are really good for even entry level production jobs right now, so it can be a hard sell to get a prospective employee to embrace more job training. Maurice Richmond is a carpenter by trade who's looking to get into manufacturing. He says it's very much a workers' market.

MAURICE RICHMOND: A lot of them jobs, you know, last, like, maybe three or four years, you know, starting out with $12 an hour, $13 an hour. And now here it is you're getting a sign-on bonus without any skills or training and get $20 an hour. You can't lose with this.

HICKS: Nada Sanders is a researcher at Northeastern University in Boston. She worries that too many workers are now thinking about the short-term benefits of a tight labor market. But she warns, that's not going to last. While they have this unusual leverage, she says workers should be demanding training from their employers.

NADA SANDERS: To me, it's a red alarm. Do it. Ring the bell now. And if you don't ask right now to get reskilled, that's not going to happen. And you won't have that chance again.

HICKS: Sanders says it's inevitable that in a low-unemployment economy, more companies like Morrison are going to have to get creative to stay productive while workers are scarce, and that will inevitably lead to more automation. She says community leaders need to recognize that while low unemployment sounds good, it can also be an inflection point for significant change. For NPR News, I'm Justin Hicks.

(SOUNDBITE OF THE ALBUM LEAF'S "IN BETWEEN LINES") Transcript provided by NPR, Copyright NPR.

Justin Hicks
Justin Hicks has joined the reporting team for Indiana Public Broadcasting News (IPB News) through funding made available by (IPBS) Indiana Public Broadcasting Stations. Justin will be based out of WVPE in his new role as a Workforce Development Reporter for IPB News. Justin comes to Indiana by way of New York. He has a Master's Degree from the Arthur L. Carter Journalism Institute at New York University. He previously earned a Bachelor of Music Degree from Appalachian State University where he played trumpet. He first learned about Elkhart, Indiana, because of the stamp on his brass instrument indicating where it was produced.