Looming labor shortage could slow Montana’s economic growth

By Martin Kidston/MISSOULA CURRENT

Speaking before a large Missoula audience last week, Pam Bucy envisioned a future in which Montana’s economic growth could slow to a crawl. The stumble won’t result from a lack of innovation, but rather, an impending shortage of workers.

Before the presentation, Bucy – commissioner of the Department of Labor and Industry – stepped aside to consider the state’s changing demographics. An estimated 130,000 workers are nearing retirement age, she said, but fewer than 123,000 young workers are primed to take their place.

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Pam Bucy, commissioner of Montana Department of Labor and Industry

“We’re going to have to start spending some money on training in Montana,” Bucy said. “We’ve got to make that happen in the next three years. Our economy will slow down if we don’t meet those numbers.”

The state is expected to add roughly 7,800 jobs over the next year. But as the economy adds new employment and older workers retire, unemployment could fall to a scant 1 percent, effectively gobbling up the available labor force.

While unemployment is often lauded as a good thing, Bucy said, it could come with consequences. As a recent state report puts it, “Montana’s continued economic growth is threatened by a shortage of workers.”

Put another way, labor-force participation must increase considerably.

“This worker shortage will impact every single industry sector throughout Montana,” said Bucy. “Jobs in construction and extraction, health care and production will see the greater impacts, because they require greater skills.”

Bucy is reluctant to label the challenges as part of the state’s shift to a new economy. She prefers to call it a more diversified economy, one that relies on new technologies that demand higher skills – and more workers.

Lacking the workforce trained to compete in new fields has already cost Montana cities their chance to land new employers. Recently, a California business looking to expand its operation chose Boise over Missoula because, the firm discovered, Montana lacked the training program needed to feed the workforce.

“Missoula was a on top for a few days until they dug into that issue and found that it would be a good year before we got the program running,” said Jenn Ewan with Missoula Economic Partnership. “Until the Montana Board of Regents approves the program, we can’t really market it. It’s a slow-moving train.”

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Jenn Ewan, director of entrepreneurship and special projects at Missoula Economic Partnership

For the past two years, members of MEP have warned that a trained workforce, not innovation, would be Missoula’s biggest challenge moving toward a high-tech future. To alleviate that, MEP, along with the Department of Labor and Industry, has worked to bridge the divide between higher education and the private sector.

The efforts have proven successful in some areas, helping launch new collaborations in cyber security, big data and other high-tech fields. One local company needed employees skilled in front-end design, and the University of Montana’s School of Business adjusted its programming to meet the need.

Efforts to create a master’s degree in computer science at UM are also moving forward.

“I really do think the private-sector voice is becoming louder and starting to have a louder voice in economic and workforce development,” said Ewan. “I’m getting contacted more and more to be that bridge between the private sector and education. I’ve seen the university bend over backwards to address the needs.”

Bucy believes Montana’s colleges and universities must apply state data to stay abreast of private-sector needs. Aided by federal grants, recent efforts have shown success, filling jobs in energy and industry safety, with a new effort now aimed at health care.

Montana businesses are also addressing the impending shortage by improving communication with local colleges, and by providing on-the-job training when possible. The approach is well-suited to certain industries, such as manufacturing, which grew by 2.9 percent in 2015 and aided in the state’s economic growth.

“We’re seeing tremendous growth in manufacturing, which is new and great,” Bucy said. “It’s really value added – shipping things out of Montana. But what’s harder is how to address the needs of small manufacturing. They still need Machining 101, but they need you to learn their machines. The way to do that is through apprenticeships and on-the-job training.”