As new businesses crop up along the Wasatch Front, consumers may be glad to try new restaurants or browse shops. Other residents may consider it an encouraging manifestation of Utah's strong economy.
But Dianne Strickland is thinking one thing: There go more of my employees.Strickland, a supervisor of six fast-food restaurants extending along the Wasatch Front, is among the small-business administrators who face fierce competition for workers in service-sector operations. The array of "help wanted" signs that share shop windows with house advertisements are evidence of the employee shortage for traditionally minimum wage jobs.
Utah's 3 percent unemployment rate coupled with a boom in new establishments is to blame for the difficulty. More than 1,251 new service-sector operations were established in 1997 - hundreds more than construction, manufacturing, finance, government or trade industries.
Tami Ivy, a marketing director for Crossroads Mall who works among these struggling establishments daily, had her own difficulties in hiring for a customer service position.
"It hasn't always been this hard," Ivy said. "There are a lot of opportunities for people, making it more and more difficult."
Mark Knold, a labor economist with the Utah Department of Workforce Services, said he classifies this problem as a wage shortage rather than a labor shortage, where small employers are unwilling or unable to pay workers enough to keep them there.
The bottom line is that the labor force is not expanding at a fast enough rate to provide enough workers, Knold said.
Two measures by Congress, one in October of 1996 and the other in September of 1997, bumped the federal minimum wage to $5.15 an hour. If the Fair Minimum Wage Act of 1998 - a federal measure endorsed by Democrats - is passed, by January of 2000 the minimum wage will be raised to $6.15 an hour.
But not many workers in Utah's metro area still work for $5.15 an hour, said Ken Jensen, chief economist for the department of Workforce Services.
"They passed $5.15 up long ago," Jensen said. "Employers have had to go considerably higher."
The real minimum wage is at least $7.50 an hour in Salt Lake City, Knold said.
Strickland said she realizes if workers will get stolen by other businesses if they aren't paid enough. In her establishments, the only workers who start out at minimum wage are 16-year-olds with no experience. Adult workers typically make at least $6 or $7 an hour, she said.
In addition to higher wages, employers are implementing incentive programs to attract workers. Employees may be given small bonuses at the end of the night when they meet sales goals. Stores under the same ownership may compete for movie passes, trips, gift certificates or tickets to sporting events.
"We try to keep them motivated," Strickland said. "And we are having to do it more and more."
But this motivation has a price.
As businesses find themselves paying more to keep their employees, profit margins decrease, Jensen said. Wage competition is stiff, but businesses are not necessarily able to raise prices.
"Something has got to give," Jensen said. "Employers have to increase productivity of workers."
In every situation, businesses are finding themselves advertising for help in a number of ways, from using permanent placement agencies and job services to offering their employees perks for bringing in friends. Some employers are finding it useful to tap into the older population for reliable workers.
Up until 1997, Utah experienced in-migration from California and re-entry into the work force, so there were plenty of workers to fill all sorts of jobs.
But this year, California's economy - along with all others in the union - is booming. Out-of-staters see few incentives in moving to Utah to work, since the United States has few regions in economic slump.
The result is that small businesses here have the last choice in terms of workers. They are left with the "bottom tier" - those with marginal abilities, attendance problems and a lack of training or transportation, Jensen said.
"The employees we used to hire are now working in banks," Strick-land said.
Honesty has also become a problem for employers. Strickland said her stores have seen more theft in the past six months than in the 10 years she has worked as supervisor.
Though the "bottom feeders" can be hurt by this shortage, Knold said he doesn't see "too many of them shutting down."
Unfortunately for service-sector employers, there's no light at the end of the tunnel. Labor economists classify this shortage of workers as a long-term problem.
Knold said similar work force situations have been short in duration in the past, but there's no relief in sight for this particular problem, and he doesn't see a reversal in the next few years.