The “tightening” has been taking place for some time in the Miami Valley, a local job placement business owner said, and has meant employers can’t be as selective in filling jobs because of the competitive market.
"It remains impossible to tell how much lower district counties' unemployment rates might fall, but it's clear that many counties are seeing tighter labor market conditions than they've experienced in the last decade," according to the report, which was released this week.
The Fed’s fourth district is made up of Ohio, western Pennsylvania, the panhandle of West Virginia and eastern Kentucky.
Last week, the state said the February jobless rate — which is not seasonally adjusted — in every county in this region dropped and a majority remain below last year’s rate in the same month.
The new Fed report shows that most of Western Ohio — including Montgomery, Warren, Greene, Clark and Butler counties — have returned to pre-recession unemployment rates or better.
Tom Maher, president of Manpower of Dayton Inc., said tight labor markets have been a reality for the employers he works with.
“What they’re reporting is probably not news to any employer in our market,” said Maher, whose firm helps employers find qualified employees while steering the unemployed toward work. “We’ve been going through that for several years now.”
Maher said that wages have been going up in the Dayton area, at least since last summer and beyond, for entry-level job positions and jobs just beyond entry-level.
“We are seeing positive movement on wages,” he said. “They are going up.”
A local economist agreed.
“This labor market tightening has already occurred for some occupations and pay has begun rising at more than 2 percent per year in some of those markets,” Wright State University economics professor Thomas Traynor said. “The key piece of evidence indicating that labor market tightening is definitely occurring is accelerating pay increases.”
Schweitzer said a tight labor market isn’t unhealthy.
But it doesn’t necessarily translate into higher wages in every part of the state, according to his report, co-written by Christopher Vecchio, a senior research analyst at the bank.
“As of last December, only about 18 percent of our contacts who were hiring were raising wages and/or salaries for most job categories,” the report said.
“Almost 50 percent of our contacts who were hiring reported making adjustments to only selected job categories, while roughly 30 percent reported no change in wages or salaries,” it added.
Joe Nichols, a economics analyst with the Buckeye Institute in Columbus, said people should look beyond unemployment rates, which he agreed have improved considerably. The labor force participation rate also jumped “hugely” in the past few months, he said.
The labor-force participation rate — the share of Ohioans older than 16 who are either working or looking for a job — jumped in February. A total of 34,000 Ohioans entered the labor force that month. Of those, 28,000 got jobs, while 6,000 are still looking and thus are still counted as unemployed.
Nichols thinks wage increases may come with time.
“I think it’s highly possible we’ll start to see wages pick up a little bit,” he said. “There will be upward pressure on wages. In the medium- to short-term, I don’t think it’s a huge concern.”
“I’d rather focus on people getting work and worry about wages later,” he added.
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