Attracting and retaining talent remains a challenge

As the Federal Open Market Committee continues to raise rates, the labor market across the United States remains tight.

Unemployment sat at 3.4 percent in January, and was even lower across much of the Midwest. Those states peppered the top of the list with low unemployment in December 2022, the most recent available data at the time of publication, according to the U.S. Bureau of Labor Statistics. The Dakotas took first and second billing at 2.1 and 2.2 percent for North and South respectively. Also appearing in the top 10 were Montana (tied for fourth with Alabama at 2.6), Missouri and Nebraska sharing sixth place with Florida at 2.7 percent, and Colorado at ninth with 2.8 percent.

Minnesota and Kansas barely missed, sharing 11th place with 2.9 percent, while Iowa and Wisconsin were at 3.0 (14th) and Indiana wasn’t far behind at 3.1 percent, good for 18th place. Wyoming came in mid-table at 3.9 percent while Michigan (4.3 percent) and Illinois (4.6 percent) were the only states in the bottom 10.

The situation in rural areas is particularly difficult. The index for new hiring fell to 48.1 in February from 53.9 in January, according to Creighton University’s Rural Mainstreet Index report. “Labor shortages continue to be a significant issue constraining growth for Rural Mainstreet businesses,” said Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University. Goss oversees the index, which covers 200 rural communities in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

Nearly half of firms raised entry-level wages to match the inflation rate to cope with worker shortages and persistently high inflation, according to the February Mid-America Business Conditions Index, also from Creighton University. Another 20 percent raised entry-level wages above the inflation rate to recruit new employees.