LOUISVILLE, Ky.—The pandemic-fueled online shopping boom has created a severe labor shortage in the Louisville, Ky. metro area, as delivery companies and other businesses compete for jobs. workers in one of the country’s major freight transport hubs.
The region’s unemployment rate fell sharply to 3.2% in October from its recent pandemic peak of 16.8% in April 2020. The rate for October, the latest month for which local data is available, was then more than one percentage point lower than the national rate. by 4.6%.
The region has recovered most of the 93,000 jobs lost after the pandemic hit the U.S. economy in March 2020. The region had about 634,000 jobs in October, down 16,000 from its February 2020 total and well above above its recent April 2020 low, according to data from the Labor Department.
United Parcel Service is a major contributor to the region’s labor market recovery. Inc.
Worldport, one of the largest air cargo facilities in the United States. The company says it employs more than 25,000 people in the region, about as it did at the end of 2019, but they are better paid and working longer hours than before the pandemic. The company also estimates that its operations support at least 35,000 additional jobs in the region, for example at grocers, car dealerships and other retailers.
The drive by UPS and other large companies to raise wages in a tight labor market has pressured other regional employers to raise wages to compete with workers who face many options, according to local business leaders.
“We’re fighting for these part-timers who say, ‘Hey, should I go work for Amazon?,
should i work at mcdonalds,
do I have to work at Green District, do I have to work at Kohl’s?” said Chris Furlow, co-founder of Louisville-based salad chain Green District.
When it comes to determining where to set salaries, “we can’t go low and we can’t go very high” because of the economics of a fast food restaurant, he said, as employees cleaned up after the lunch rush in the Highlands. neighborhood location.
Green District, which plans to expand to 30 restaurants across the country next year, has hired about 100 workers for its six locations, including four in the Louisville area.
Hourly employees earn about $19 per hour including tips, and general managers earn a starting salary of $45,000 to $65,000, with the opportunity to earn $5,500 in bonuses each quarter.
Louisville’s historic strength in transportation industries—it’s within a two-hour flight of 75% of the U.S. population and has attractive river, road, and rail connections—has attracted other large employers benefiting from the growth online shopping and the demand for fast delivery during the pandemic. Amazon.co.uk Inc.
grew rapidly in the region, with new warehouses in Louisville and just across the border from Indiana.
Employment in transportation and warehousing has grown steadily in Louisville over the past decade. The area had 64,700 such jobs in October 2021, up from 42,200 in October 2011, according to the Labor Department.
The proliferation of these jobs prompted the local Chamber of Commerce, supported by major local employers, to change its advertising campaigns to attract job seekers to Louisville. Instead of targeting college graduates, they are now focusing on people without those degrees who can fill positions with local shipping companies and manufacturers.
“You can have a good life here in our community without a degree,” said Sarah Davasher-Wisdom, chief executive of Greater Louisville Inc., the regional chamber of commerce.
““You can have a great life here in our community without a degree.””
UPS raised wages to attract and retain workers. The company announced in August that it would increase hourly pay at Worldport Louisville to $20 for its daytime sorting operation from $16.50 and $21 for its nighttime sorting operation from $18.50. $. Elsewhere in the country, the base hourly rate for UPS package handlers is $15.
Shifts are also longer: while the day shift used to start around 11:30 a.m. and end in the middle of the afternoon, it is now common to start shifts closer to 9:00 a.m. to deal with the more overnight and two-day air service packages. , said UPS spokesman Jim Mayer, while guiding a visitor through a buzzing Worldport in early December.
Metal containers filled with Barbie dolls, deep-frozen Chicago pizzas and stacks of Amazon Prime boxes took off from UPS cargo jets and onto 155 miles of conveyor belts, where workers sorted packages by size and shape, checking for leaks before directing packages to their next destination.
“It’s working really well,” Tony Georges, UPS Airlines vice president of human resources, said of the changes. “We saw improvements in both flow and retention” of workers after increasing wages and increasing hours.
A smaller workforce than before the pandemic is also contributing to the tight labor market in the Louisville area, with about 20,000 fewer people working or looking for work.
According to Department of Labor data, Kentucky has long had a lower labor force participation rate — the share of adults working or looking for work — than the rest of the country. Even before the pandemic, its rate in February 2020 was 59.3%, compared to a national rate of 63.3%. The state’s rate in October was 56.6%, ranking 49th in the nation.
““It’s always been the hardest to staff, but we didn’t see the holes we’re seeing now.””
Local business leaders attribute the shortfall to childcare shortages, higher levels of savings during the pandemic and people excluded from the labor market due to drug and alcohol problems. and criminal records.
Employers who must staff shifts with irregular or undesirable schedules have a particularly difficult time finding workers. At HJI Supply Chain Solutions, a family owned warehousing company whose main customer in the region is Ford Motor Co.
struggled to staff its night and weekend shifts.
“It’s always been the hardest part of staffing, but we didn’t see the holes we’re seeing now,” CEO Lynn Moore said.
Some who previously worked in warehouses do not want to return. Daniel Lotz, a 35-year-old Kentucky native who recently returned to Louisville after a brief stint as a warehouse manager in Chicago, said he hoped to find another job.
“I see the job postings and I know how it works – I’m not really interested in that,” he said, noting that in his three years in warehousing he worked shifts. night, which did not allow for a healthy professional life. balance.
Although he has yet to find a job since returning to Louisville in September, he intends to hold on to something he wants to do, with a salary similar to what he earned at Chicago, which he described as “above average Louisville”. In the meantime, he lives off his savings and works with a guidance counsellor.
“I want to find the right job to work hard for someone,” he said.
Write to Gabriel T. Rubin at [email protected]
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