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Boom or Bust?

Boom or Bust?

Economic support experts point to skills gap, saying job training is best way to pull poor above poverty.

*Part III of a 4-part series studying the proposed minimum wage hike in Portage County. Part IV can be seen in the September 21th issue of the Stevens Point City-Times.

By Patrick Lynn and Brandi Makuski

Residents throughout Portage County have just under two months to decide whether they want to vote in favor of an advisory referendum calling for an increase in the state’s minimum wage to $10.10 per hour. The referendum will be one of two advisory questions included on the November ballot, with the second question involving a request to expand BadgerCare. The Portage County Board voted on August 19 to move both questions forward for voters to answer on Election Day.

The movement was spearheaded by local Assemblywoman Katrina Shankland, who hand-delivered a petition with more than 600 signatures to the county’s finance com- mittee asking for the referendum. With a referendum for an increase in minimum wage on the horizon, some employees are likely looking forward to the bump in pay. Some employers may be dreading it. In either case, wages in general are expected to go up whether the referendum passes or not due to a lack of qualified workers.

Bruce Trimble from the North Central Wisconsin Workforce Development Board says the issue has brought a lot of debate around his Post Road office.

“It’s a political hot topic- minimum wage has not increased with inflation, and that makes for a pretty solid argument that there should be some increase, and to what level you drive it up,” Trimble said. “Economically it’s going to impact employers some, but I will say this: the current labor market is going to drive wages up regardless of what minimum wage is, for skilled positions.”

Trimble said entry level positions, including those in the food service and retail industries, are likely to be affected but it’s dependent on how much of an increase wage earners see.

“One of the arguments we’ve heard is if you increase the minimum wage, the cost of a loaf of bread is going to go up, but I don’t think it’s going to have that kind of impact,” he said. “I think it will impact some service sector jobs, some retail, some that have traditionally paid fairly low wages.”

But Trimble pointed out many service job have been advertising starting wages as high as $9.50 and are still unable to fill spots.

“It’s a short labor market- it’s a combination of factors and a great cop out,” he said. “There’s a whole raft of things- some of it is skills gap, some of it is worker’s wishes. I personally don’t want to be a farmer, so I may be out of work and the only jobs in my area might be farming, so I don’t want to take it.”

Trimble said employers want what job seekers currently lack; and job seekers generally seem to want what employers don’t offer new hires.

“In some respects, the employers are looking for a purple squirrel: they want someone with 20 years’ experience, and workers want a golden toilet: the want the job that pays 20 years’ experience,” he said.

Trimble said the economy will eventually sort itself out but right now, many displaced workers or entry-level earners may be without reliable transportation, or the job in their skill area is too great a commute.

“I think things are getting ready to shift and it’s very serious to our local manufacturing economy specifically because they can’t find skilled, or even marginally skilled, employees to the point where some in our area are starting their own training programs as a tactical response to the situation,” he said, adding area technical colleges are also expanding capacity to meet demand.

Trimble also said there’s a younger generation of workers who haven’t experienced an economic downturn in the Great Recession of 2008 and were likely caught off guard managing expenses, adding to the problem.

Ray Przybylski, director for Portage County Health & Human Services, said a raise in the minimum wage could do good things for the county, including alleviating the level of services his department provides to those who’ve hit hard times in the Stevens Point Area- but only if costs don’t rise with it.

“I’m not in a position to see its effect on business, but as people have greater disposable income there could be a reduction in the reliance on some of the programs we have, emergency services and those type of things,” Przybylski said. “If minimum wage is raised, they may change their eligibility for access to some of our services. My guess is they’d probably raise the amount that people could make for eligibility.”

Przybylski said the potential increase, which is being proposed at $10.10 per hour, could simply move the poverty line instead of raising people over it.

“We talk often about the poverty line; if minimum wage and expenses go up, that poverty line is just going to move. If it costs more for groceries for food and gasoline and whatever, just because you’re making more money doesn’t mean you’re going to have more money to survive on; it’s just going to different places,” he said.

To truly change the face of local poverty and unemployment issues, Przybylski said the key is job training and job matching.

“From our perspective, we do see people successfully raise them- selves out of poverty when they have access to employment, employment training and technology training,” he said. “It’s a real benefit for some people. If I had my way, I would probably put more money into job training, but if you could raise the minimum wage and hold expenses near where they are now, that would be a benefit to everyone.”

But capitalism being what it is, according to Mayor Andrew Halverson, prices are not likely to stay fixed- something he worries some workers under 40 don’t seem to grasp.

“Something happened with my generation and slightly younger where there is a real element of exception and immediacy to what they want and what they think they should get,” Halverson said. “And I don’t know if that’s because the baby boomers who raised us had a lot of success, generally speaking, for the lifestyle and wages they were able to create. They don’t remember the hyperinflation of the 80’s, they were 4 or 5 years old. So they never got to understand the difficulty of those economic times and what it meant to work hard to get somewhere.”

Halverson added many of the city’s municipal employees are over 40 and within another decade or two, will retire and need to be replaced. He said a major change in mindset is needed locally to better equip younger workers with not only the mentality for hard work, but also with the skills employers are looking for.

“There is a workforce disconnect there; those who think they’re going to walk into a $40,000-$50,000 a year job immediately once they graduate from college, that’s just not going to happen. We need to get our K-12 students trained and follow a more European style of training with apprenticeships,” he said, pointing to area businesses such as Martin Machining, Point Precision, The Worth Company, all of whom have created their own training programs for newly hired employees.

“But they’re also getting into the schools and they’re reaching out to students,” Halverson said. “We’ve got to bring back Tech Ed and we’ve got to bring it back in a very tech and I.T.-focused way. I think we can create skillsets in high school that can fast track over a two- year period directly into a lot of these jobs that are available. That’s how we’re going to change the workforce.”

Trimble agreed.

“Employers are getting more innovative to hire people and train them,” he said. “People out there are having to make some concessions about whether they want to move and what kind of work they’re willing to take on. Whether minimum wage goes up or not, wages are going to go up because wages have been kind of flat.”

Trimble said when he finished college, a degree practically guaranteed a good job, and despite changes in the workplace people still hold on to that belief.

“Now when you come out of post-secondary school and you don’t have a skill to go with that piece of paper, it’s going to be tough sledding. But, when I came out of school, XYZ Company would train me to do whatever they needed to me do. Now, employers went through a long period of time where people who came to their door with that skill.”