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How Wisconsin is trying to head off a major worker shortage

In Wisconsin, “Help Wanted” is on virtually every restaurant window, store front and city bus. With an aging population and few immigrants, the state could have a shortage of 45,000 workers by 2024, which could pose a threat to business. Economics correspondent Paul Solman reports.

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  • Judy Woodruff:

    Now, why there are some extraordinary measures being taken in the state of Wisconsin to find enough workers to fill jobs, including a multimillion-dollar ad campaign to attract millennials and a job training program for prison inmates.

    Economics correspondent Paul Solman has our report.

    It's part of our weekly series Making Sense. And it's also the latest in our series Chasing the Dream on poverty and opportunity in America.

  • Paul Solman:

    The signs of the times in Wisconsin, "Help Wanted" on virtually every restaurant window, storefront and city bus. Even public TV has openings.

    An aging population and few immigrants has this state, with a record low jobless rate of 2.9 percent, projecting 45,000 more job openings by 2024 than workers to fill them.

  • Erik Anderson:

    The reality is, anywhere in Southeastern Wisconsin right now, if you need employees, you're struggling to find them.

  • Paul Solman:

    Erik Anderson, CEO of Basin Precision Machining, which makes parts for, among others, Milwaukee's Harley-Davidson.

    In spite of high-tech machinery that requires fewer operators these days, Anderson wants to expand and is desperate to hire.

    You still need how many people?

  • Erik Anderson:

    Twenty.

  • Paul Solman:

    Now, right now?

  • Erik Anderson:

    Right now. I got 20 jobs right now.

  • Paul Solman:

    The labor crunch, he says, has become the number one threat to his business.

  • Erik Anderson:

    I guess you would call it a full-on charm offensive, where, as the CEO usually, you're looking to grow the business. And for me, this situation is such a revenue limiter that I spend about half my time on H.R., promotion.

    That's why I was so glad when you folks wanted to come talk about this very topic.

  • Paul Solman:

    And you're doing a little recruiting while you're talking to me.

  • Erik Anderson:

    Pretty much every waking hour I'm doing a little recruiting.

    (LAUGHTER)

  • Paul Solman:

    Wisconsin's answer to the worker shortage? Trying to lower labor from out of state.

  • Narrator:

    An hour commute or an hour with friends. In Wisconsin, the average commute is less than 22 minutes.

  • Paul Solman:

    The million-dollar ad campaign was a blatant appeal to millennials in Chicago and anyone who didn't know the attractions of Wisconsin.

  • Tricia Braun:

    They thought of the traditional things, the beer, cheese, Packers football.

  • Paul Solman:

    Tricia Braun fisher runs the state's economic development agency.

  • Tricia Braun:

    They didn't say things like I.T. software development jobs or great health care jobs, engineering jobs. So we needed to make sure that those, along with messages about our quality of life, were getting out there to the potential talent that we could recruit.

  • Paul Solman:

    Braun says it's too early to know if the campaign is working.

    But even if it does work, another state initiative will make the shortage more acute. A 20-million-square-foot Foxconn plant being constructed in Southern Wisconsin is promising to create 13,000 more jobs.

    Foxconn, a Chinese electronics manufacturer, got a $4.3 billion tax credit to locate here.

  • Marc Levine:

    It's about $3 billion from the state itself. And then the rest is coming from local governments.

  • Paul Solman:

    In cash, says economists Marc Levine.

  • Marc Levine:

    Because Wisconsin manufacturers do not pay taxes, the tax credit will be converted into cash payments.

  • Paul Solman:

    Wisconsin will give Foxconn…

  • Marc Levine:

    Give them a check, right.

  • Paul Solman:

    Meanwhile, says Levine, for decades, there have been more than enough unemployed Wisconsinites. The money could have been used to retrain victims of the deindustrialization that's been going on since the 1980s.

  • Marc Levine:

    In Milwaukee, almost 50 percent of African-American males employed in the 19 — through the 1970s into the 1980s were employed in manufacturing, compared to about 32 percent of white males.

  • Paul Solman:

    When those jobs vanished, so did the pipeline for middle-class-inner city jobs.

  • Marc Levine:

    The African-American male prime age employment rate in Milwaukee today is a little over 63 percent.

  • Paul Solman:

    And many others are underemployed, working part-time at best.

    One reason, says Levine, living in inner cities, they simply can't get to jobs an hour or more away.

  • Marc Levine:

    All the net job growth in Milwaukee over the last 30 years has occurred in the suburbs, the suburbs that are not connected effectively to the central city with good transportation links.

  • Paul Solman:

    So where would you go for workers? Well, Wisconsin employers have turned to a totally unemployed and previously untapped labor pool, women at the Robert Ellsworth correctional facility an hour south of Milwaukee, learning factory skills like CNC, computer numerical control, at the nearby technical college on work release.

  • Randilyn:

    I have been incarcerated for a little over two years right now.

  • Paul Solman:

    For what?

  • Randilyn:

    Drunk driving. And I have a little over two years to go.

  • Paul Solman:

    A four-your sentence because it's her third such conviction.

    But Randilyn — no last names allowed — is not worried about getting a job.

  • Randilyn:

    I know there's jobs out there. I see them in the paper. I see them on the wants ads. I have gone to temp agencies, and they're always looking for CNC help.

  • Paul Solman:

    Bethany is doing time for forgery and drug use.

  • Bethany:

    Since I have been locked up, I have been offered a lot of opportunities to change my life and become a different person. And I have taken them.

  • Paul Solman:

    The instructor here, Neil Petersen, seemed genuinely surprised his cons are, well, such consummate pros.

  • Neil Petersen:

    I have done approximately 20 boot camps, and you get a scattering of — a couple of D's, some C's, B's. I have so far up from these ladies that I have been teaching, I have gotten 10 A's, one B, and one B-minus. I have never seen that before in my life.

  • Paul Solman:

    The fact is, though, that the national unemployment rate for those with a criminal record has been estimated as high as 80 percent.

    And yet, after graduating from the 22-week boot camp, these women figure to actually start work at nearby Wisconsin machine shops while still incarcerated.

    How many employers come here willing to hire women from prison?

  • Kate Walker:

    Right now, we have had 12 who have already gotten involved, and we're anticipating more.

  • Paul Solman:

    Gateway's Kate Walker has found more employers with job offers than there are trained inmates to take them.

  • Kate Walker:

    There's no hesitation about hiring them, even if it's for the short-term, even if they're not going to reside in the county that the employer is located. They know that they can help them in the interim.

  • Paul Solman:

    I was told some 70 percent of these prisoners are in for offenses related to substance abuse, where the recidivism rate may be as high as nine out of 10.

    CEO Anderson says, that won't deter him.

    We heard yesterday that there are employers around here now who don't do drug testing.

  • Erik Anderson:

    That's true.

  • Paul Solman:

    Because they don't want to automatically eliminate drug-using employees.

  • Erik Anderson:

    Yes, that's — that's true. That's true. And we're one of them.

  • Paul Solman:

    Now, in every story about a labor shortage, there's one obvious question, Why don't employers just offer to pay more?

    Well, because of globalization and automation in recent decades, most just haven't had to.

    Professor Levine adds the decline of unions.

  • Marc Levine:

    Keeping labor costs low is part generally of a corporate strategy to keep their overall costs low. Breaking unions has certainly been part of that. The vertiginous decline of unionization in the state since really the early 1970s has been extraordinary, where you had 35 percent of workers unionized, and today it's 10 percent.

  • Paul Solman:

    There's no sign that unions are coming back soon. But maybe, just maybe, a tight labor market is finally nudging up wages.

    At least Erik Anderson is raising them. Three years ago, new hires made $9 an hour here. This fall, he plans to raise their starting wage to $15, and, within a year, they will make in the upper teens.

    For the "PBS NewsHour," this is economics correspondent Paul Solman in Southern Wisconsin.

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