The already tight Buffalo Niagara job market is on the verge of getting even tighter.
While hiring has been sluggish through the first half of this year, the pace is likely to accelerate through the end of the year as companies such as Panasonic and Strategic Financial Solutions look to bring on upwards of 300 full-time workers.
There will be plenty of opportunities for part-time work, too, with Whole Foods, shopping delivery service firm Instacart and online retail giant Amazon all looking to add hundreds more part-time positions as they set up shop in the Buffalo Niagara region.
In all, those five firms are planning to hire more than 1,400 people within the next two years, with more than 600 of those positions slated to be filled this year.
In a region where the unemployment rate is down around 5 percent, the wave of hiring will put added pressure on the job market, putting upward pressure on wages and putting added strains on a pool of unemployed workers that employers already say is stretched too thin, making it hard to find qualified and dependable workers.
"The question is, without much slack in the labor pool, where are the people going to come from?" asked Gary Keith, the regional economist for M&T Bank in Buffalo.
The answer, economists said, likely will come from two places. Higher wages and better opportunities will lead to a bigger labor pool by drawing in more workers who currently aren't looking for a job. Or the influx of new jobs will help attract new people to the Buffalo Niagara region, where a long decline in population has only recently stabilized.
"I think we're in the middle of an experiment in how to go forward with our workforce," Keith said.
That experiment still is unfolding. For the moment, there still are more than enough workers interested in filling the available jobs. More than 800 people showed up for a Panasonic job fair last week seeking candidates for 300 positions the Japanese electronics giant plans to fill by the end of March at its portion of the Tesla solar panel factory in South Buffalo. More than 1,200 people have applied for the 177 positions that Whole Foods is looking to fill at the store it is opening later this year in Amherst. Applicants were lined up out the door at an Amazon hiring event last week.
"We've got a lot of interest," said John Slenker, the state Labor Department's regional economist in Buffalo.
We've also got a lot of competition, even if most of the jobs at Instacart, Amazon and Whole Foods will be part time.
"If you notice, they're not paying minimum wage," Slenker said. "They're all up around $12 an hour or better."
Indeed, Amazon is offering $12.25 an hour for the part-time warehouse jobs it's looking to fill in Lancaster. Whole Foods says it will pay up to $12.50 an hour.
Among the full-time jobs, Panasonic is offering $14 an hour for its entry-level production workers. Machine operators start at $18 an hour. Workers with experience could earn even more, Panasonic officials said.
"We need well-trained employees, experienced in manufacturing," said Mark Shami, the president of the Panasonic business unit that will make solar cells and modules at the Tesla solar panel plant that, if it develops as planned, could employ nearly 1,500 people within two years, plus hundreds more at local suppliers and service providers.
While those wages still rank in the bottom half of the Buffalo Niagara region's overall pay scale, they are competitive in their specific segments of the job market, Slenker said. And that likely will put upward pressure on wages in those sectors.
Take Whole Foods, for instance. By offering up to $12.50 an hour to its part-timers, it puts pressure on other local supermarkets, such as Tops and Wegmans, to keep up or else risk losing workers from their supermarkets near Whole Foods' Amherst store. The wages at Panasonic help set the scale for entry-level manufacturing work, and every other factory in the region has to be mindful of keeping up with that.
"It's either that or you're not going to get the same caliber of worker," Slenker said, pointing to the big responses that Panasonic, Whole Foods and Amazon have received. "The reason they're getting that number of applicants is because they raised the wages."
It also doesn't hurt that the spurt of hiring is targeting some of the weaker portions of the Buffalo Niagara job market. Online shopping and a weak Canadian dollar have led to a wave of store closings across the region. The region has lost nearly 5 percent of its warehouse jobs because of some major shutdowns over the past two years, including the former Ahold USA facility that Amazon will be moving into.
In the long run, though, the region will need more workers.
Some of them could come by enticing graduates from local colleges to stick around. The hiring at Strategic Financial Solutions, which initially will be in groups of eight to 12 at a time, is targeting applicants with either two-year or four-year college degrees.
"A lot of these call center, back-office jobs tend to target recent college graduates," Keith said.
Some of the needed new workers could come from luring people who have stopped looking for jobs back into the labor pool. For instance, mothers who are staying home with their children because a minimum wage job doesn't pay enough to merit the day care expenses might be tempted by a job that paid a few dollars an hour more. Retirees who may not think it's worth cutting into their leisure time for a job that pays $10 an hour might think differently if they could find something part-time that pays $12, Slenker said.
Some workers could come from the Buffalo Niagara region's outlying counties. Better pay makes a longer commute more palatable.
Still more could come from workers who take the initiative to upgrade their skills through the various job training programs to become more employable – a solution that also will require a significant investment in worker training to provide unskilled laborers with the computer skills and other abilities that most employers require today.
"You need to have some computer skills for pretty much anything today," Keith said. "Job skills change pretty quickly, and you can get discouraged quickly if you haven't kept up."
But the biggest potential still is from creating enough attractive job opportunities to lure new people to the area.
"There's a point at which wages will draw in people from outside your area," Slenker said.
We're not there yet. After decades of decline, the Buffalo Niagara population only recently has shown signs of stabilizing, which puts a cap on how fast the local job market can grow. Without population growth, the rule of thumb among economists is that a region's job growth can't go much above 1 percent annually, Keith said.
"There is a wage point that brings people out, and right now, that's around $12 an hour. If you go much below that, you're not going to get much action," Slenker said.
But workers also have to earn their pay and be productive. If they don't, it could encourage companies to invest in new technology that replaces people with machines.
"This is a good scenario for workers, but they have to be able to merit that pay," Slenker said.