Entry-Level Workers’ Newfound Clout

By Beacon Staff

The tables are turned. There has, perhaps, never been a time in which entry-level workers have been so sought after and possess so much control over their employers. The much-publicized, much-studied and much-agonized labor shortage in the Flathead – where the unemployment rate hovers at 2.4 percent – continues with no end in sight.

The shortage has been worse. Last year a bidding war ensued between the owners of Flathead fast food franchises over the young workers who perform the most basic tasks including mopping, burger-flipping and taking orders. Wages for such positions rose, and workers bounced from one restaurant to another, courted by a higher paycheck and rarely notifying their boss that they were leaving.

The competition for entry-level workers has leveled off a bit, according to Scott Hadwin, who owns five McDonald’s restaurants in Northwest Montana, with a sixth to open soon in north Kalispell’s commercial development. He starts his employees at $7.25 an hour, and hasn’t had to raise that wage for some time.

But in order to showcase the perks of a McDonald’s job, he has worked out a detailed breakdown of the fringe benefits he provides: including basic health insurance, discounts at area retailers, paid vacation, rewards for good grades, and a “McResource” hotline to council young parents.

By Hadwin’s calculations, a McDonald’s employee working 32 hours a week at $8 an hour would make $13,312 annually. With all the above benefits included, however, he estimates the value of that employee’s total compensation at $17,540 a year. “For somebody right off the street,” he said, “we think that’s pretty darn competitive.”

Hadwin’s restaurant on U.S. Highway 2 West in Kalispell is immaculate, with flower arrangements and professional photos of kids playing in the snow with boxes of McDonald’s fries. Diners are also greeted by two large signs inviting job applications and diagramming the career path someone can take from crew member to franchise owner. To make work more fun, Hadwin has “Hawaiian Shirt Day” and “Crazy Hat Day” for employees. He also throws a party at a nearby water park, paying admission for employees and their families and, of course, free food.

At his Kalispell restaurant, Hadwin employs about 40; ideally he would like to have 70 workers there. He is nervous about adequately staffing his new location at the Spring Prairie shopping center when it opens.

Hadwin, like many Flathead business owners, predicts the demand for entry-level workers is only going to increase as commercial development in north Kalispell expands, with more stores demanding more retail workers. And with that increased demand, the competition for entry-level workers will intensify.

“I haven’t had a day off since the first of June,” said Gib Bissell, owner of the Aero Inn, interviewed last week. “I’m so desperate, I’m going to hire the first person that walks through the door.”

Bissell needs housekeepers for his 62-room hotel. And when he hires one, he tries to keep them by offering summer and holiday bonuses, and a week’s paid vacation at $7 an hour. But he still has a hard time retaining workers for the difficult, physical job: “If they don’t like it, they’re going to walk across the street and get hired.”

Experts disagree on where this trend is heading, with some predicting an influx of foreign workers and others saying employers must become better at accommodating the different work habits of a younger generation.

“Within five years, you’re going to see a lot of primarily first generation immigrants moving in here to fill these jobs, probably from south of the border,” said Stephen Horowitz, previously a marketing and business consultant for three years in the Golden Triangle region of north central Montana. Horowitz has lived in other resort towns like Ketchum, Idaho, and Aspen, Colo., where similar economic circumstances have led to an influx of foreign workers.

Some Flathead businesses, particularly seasonal ones, employ foreign workers already. Mark Twichel, Kalispell General Manager for Mergenthaler Transfer and Storage hires Romanian workers on temporary visas, and said he is delighted with their productivity and professionalism. Whitefish Mountain Resort and Glacier Park Inc., which staffs the hotels and lodges at the park, regularly employ workers from South America and Eastern Europe for peak seasons.

Many employers interviewed complained about what they see as a low work ethic and lack of loyalty on the part of many young employees unwilling to work hard at menial, entry-level jobs – further contributing to the labor shortage. Mora McCarthy, a business advocate at the Flathead Job Service Workforce Center, said the perceived laziness of young workers represents the failure of employers to appreciate a different view toward work held by teenagers and 20-somethings.

“What I see is a lack of understanding of another person’s point of view and it just happens in larger numbers so we’re calling it a generational difference,” she said. McCarthy also believes employers are going to increasingly turn toward “alternative” workers – those with disabilities or prison records.

Paul Polzin, director of the University of Montana’s Bureau of Business and Economic Research, said he is skeptical that an increase in foreign workers in the Flathead is imminent. He believes the labor shortage – taking place across the rest of Montana and the United States – will force employers to use such strategies as finding workers who can do two jobs, and an increase in machines that can perform the necessary work.

Wages will continue to go up for entry-level jobs as the demand increases, Polzin said, but he doesn’t buy the theory that today’s young workers are any less dedicated than other generations.

“Ah hell, I heard that 40 years ago,” he said. “That’s what they said about me.”