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Help Wanted: Shortage Of Workers Hits South

By Elizabeth Levitan SpaidStaff writer of The Christian Science Monitor / March 27, 1995



ATLANTA

FINDING employees in Nashville these days is almost as difficult as cutting a country music album.

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*In some areas of the Tennessee city, restaurants have reduced their lunch business from five to three days a week because they can't find enough waiters.

*At many hotels, a staff shortage has forced managers to clean rooms and make beds, while food workers do double duty folding laundry.

*To help alleviate the labor shortage at the Opryland Hotel, Gaylord Entertainment Company last fall bought a Quality Inn and converted it into a dorm. The company has been filling it with new workers from the Southwest and Puerto Rico, but the company is still short 300 employees.

With unemployment at around 2.5 percent and expected to dip even lower, Nashville's labor pool will be the tightest of eight southeastern cities through 1996, according to a recent report by the Wake Forest University Center for Economic and Banking Studies in Winston-Salem, N.C.

Trailing not far behind are Raleigh-Durham, N.C.; Birmingham, Ala.; Charlotte, N.C.; and Greenville, S.C. -- cities where jobless rates will stay under 4 percent over the next two years, says Gary Shoesmith, director of the center. The national unemployment rate is about 5.6 percent.

The labor shortage is occurring mainly in lower-skilled industries, such as hospitality, retail, and the restaurant business. It's the direct result of strong job growth in a region whose booming economy has been the envy of much of the nation over the past several years.

''I have worked in markets from Miami to Sacramento, and I have never seen a situation where the unemployment situation is this bad or this good, depending on your perspective,'' says Dale Turner, president of the Nashville Hotel and Motel Association.

While economists and businesses agree that it is ironic to refer to low unemployment as a ''problem,'' the tight labor market is likely to have a number of implications for the region.

Slow growth over the next two years, also nudged by the rise in interest rates, will be one effect, Dr. Shoesmith says. Another is that companies will be unable to increase production if they don't have enough workers. In addition, he says, the region's ability to continue attracting companies may become more difficult, because ''as companies start manufacturing facilities here they will have to bring employees with them or pirate them from other companies.''

But Mark Vitner, vice president and economist at First Union National Bank in Charlotte, doesn't believe it will discourage companies from relocating to the Southeast. ''We continue to see a flood of companies relocating here both from overseas and from the West Coast,'' he says. Mr. Vitner says the labor crunch will cause wages to rise more rapidly and force companies to work their existing work forces longer.

Shoesmith says rising wages will level the playing field with other parts of the country. ''There will also be a reallocation of the labor force, so that many people who are underemployed -- at lower skills than they're capable and at lower pay -- will be able to move up the ladder.''

OR now, low unemployment is affecting cities in the Southeast differently.

In the Raleigh-Durham-Chapel Hill area, where the jobless rate is projected to remain under 3 percent through 1996, the service industry has barely felt the impact, says Alex Poe, vice president of economic development for the Greater Raleigh Chamber of Commerce. The area boasts 14 colleges and has an almost endless supply of students to fill these positions.

In Atlanta, where the unemployment rate is about 3.9 percent, mainly service industries in the suburban and exurban areas have a hard time finding qualified workers.

But in Nashville, city and business leaders are addressing the situation from short- and long-term perspectives. The Nashville Area Chamber of Commerce has conducted a business survey of 2,500 employers to find the shortages and solutions. In May, 100 of the city's top chief executives will meet with government and education leaders to discuss how to better prepare high school students for the job force.