Help Wanted

 Made some purchases at a local business today and got to chatting with the gentleman who assisted me. He is an SIUC student who leaves for the summer tomorrow so we got to talking about filling positions in Carbondale and all the "Help Wanted" signs around. Before he landed the job he was leaving, he said he and his friends had a dickens of a time getting those businesses with help wanted signs to respond. three places he applied for never got back to him after he left a message indicating his interest in the positions but the signs remained out. The fourth place did talk with him but said they currently were not hiring and just "had the sign out".

Chamber of Commerce Interview

WSIU interviewed Chamber of Commerce President Jennifer Olsen this morning on the effect of the stay at home order on local businesses. I don't thing unemployment benefits will have as much an effect on employees as she comments. Although there are instances of people making more filing for unemployment than they did working, the increased unemployment benefits are only temporary.

250,000 Fewer

No, not students at SIUC but that is the number of fewer students starting college this year, compared to last year. According to a story I caught on NPR and WSIU this morning, this is a trend that has continued since 2008:  fewer students enrolling in college nationwide for over a decade. 2 major reasons for the trend:

1. ever increasing price of college
2. continually shrinking unemployment rate. As the unemployment rate drops, typically more high school graduates enter the labor marker or an apprenticeship program in order to start earning rather than attending college, thus putting off earning wages for 4 to 6 years.

Southern Illinois Unemployment Down

According to today's Southern Illinois Business Journal, unemployment for the Southern Illinois region as a whole is under 10%. A number of counties tip out at 9.9% but this is the first time in years I have seen all of them in single digits.

Wal-mart Employee Shortages

I don't shop at Wal-mart much, maybe twice a year, so have not noticed any problems with either stock outages or lack of help on the sales floor.  According to this article from Bloomberg, Wal-mart nationally has added 455 stores between 2008 and Jan 31 of this year.  During the same period, the company cut about 120,000 employees from company payroll.  The article doesn't say if this was due to employee attrition or termination.  However, this means that the company increased in size about 10% while cutting staff for the stores approximately 10%,  trying to cover more stores with fewer people.  there is only so much efficiency you can wring out of people before gaps in your operation start to appear.

The reason why Wal-mart, or any company, cuts payroll first is simple.  Payroll is the largest variable cost any employer has and the largest cost a business has direct control over.  If a company wants to reduce costs, the first place it typically looks is employees, as terminating one employee, leaving the others to pick up the slack, adds a whole year of wages to the company's bottom line.  Other costs, such as rent or mortgage, utilities, insurance, taxes, etc. are fixed and/or have to be paid for the business to keep operating.  Employee payrolls present a very large and tempting target for cost cutters, since the effect of removing an employee on profit is immediate while management can spread the increased workload over the remaining staff.  The problem occurs when you spread out so much additional workload that the remaining staff cannot handle it, which appears Wal-marts' problem

Unemployment Rates

As D. Gorton pointed out in a email earlier this week, surprisingly Jackson County has among the lowest unemployment rates of all counties in the state. We rank 99 out of 102. Our unemployment rate is 7.3%, while Brown County at 4.5%, is the lowest. Williamson County, our neighbor to the east (and home to the Hub of the Universe) ranks 59 with 9.6%, while Perry and Randolph Counties have rates of 11.9 and 9.4%, respectively. And Franklin County? #3 in the state, with an unemployment rate of 14.6%. At least they're no longer #1 like they were a year ago.

Yeah, sales tax collections are down and SIUC is having problems, but our economic underpinnings, at least measured by this metric, look good, especially compared to the rest of the state.