Labor shortages driving up area wages in some industries, Fed says
A shortage of qualified workers had led some employers in the region to raise wages, the Federal Reserve Bank of Cleveland says in a quarterly report released Wednesday.
The “Beige Book” provides a summary of national and regional economic trends with the regional trends based on the Federal Reserve's districts. The Cleveland bank heads up the Fourth District, which covers 19 counties in Western Pennsylvania as well as Ohio, eastern Kentucky and northern West Virginia.
Overall, Fourth District labor markets tightened in the first months of 2018, particularly in manufacturing and construction, the report says.
“Overall, the market for talent remains challenging,” the report says. “Turnover and an aging workforce were commonly cited as key challenges. Retirements are limiting the potential pool of workers.”
A construction contractor said he expects to face significant labor shortages while a steel producer said “that every time his firm gets close to having a full staff, someone quits,” the report says.
The recently passed tax cuts are helping support short- and medium-term pay increases.
“However, few contacts expect the tax cuts to lead to more robust hiring,” the report says. “Rather, firms expect to maintain their recent hiring pace over the short term.”