Is Juneau's labor pool drying up?

With city's low unemployment, retailers may struggle to find workers

Posted: Sunday, August 26, 2007

Juneau workers, name your price.

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Juneau employers, get ready to pay - if you can.

The introduction of Alaska's first Wal-Mart supercenter into a tight labor market, along with a newly opened Home Depot and a greatly expanded Fred Meyer, has left the city with an unemployment rate of 3.8 percent - one of the lowest in the state and the city's lowest in recent memory.

The big companies are mostly not talking, but local employers and others who follow the Juneau labor markets say they're feeling the fallout.

Wal-Mart is planning to open its Juneau store Sept. 12 in head-to-head competition with Fred Meyer and other entry-level employers for workers.

"Juneau has always been a tough market," said Melinda Merrill, Fred Meyer spokeswoman.

Juneau's largest retailer, Fred Meyer completed a major expansion and remodeling earlier this year and is still hiring new people. Merrill said that's not unusual, given the time of year.

Alaska Industrial Hardware's Dennis Watson said he expects the opening of Wal-Mart to present even more pressure on Juneau wages.

"We're always evaluating the wages we pay, and we try to stay competitive with the businesses we compete with," he said.

He said his company's stable work force likely will not be directly affected by Wal-Mart's entry into the Juneau market.

"Starting wages may creep up a bit," he said.

Even after Wal-Mart opens, it is likely to continue looking for workers regularly. The company acknowledges publicly that it has "significant" annual turnover in employees, despite offering profit-sharing, a 401(k) plan, store discount cards, bonuses based on company performances, discounted stock purchase program, life insurance and health care benefits to some employees, the company says.

To fill 300 or more jobs, Wal-Mart has been camped out at the Juneau Job Center for six to eight weeks, said local center Manager Mike Hutcherson.

The company is now training workers at its Lemon Creek store in anticipation of its Sept. 12 grand opening.

Juneau Economic Development Council Executive Director Lance Miller said he's never seen the local market so tight, and Wal-Mart's demand comes close on the heels of its competitors.

"I don't know where they're going to get people," he said. "Even Home Depot had trouble finding people."

The size of the Fred Meyer staff varies between 270 to 300 and is at the top of that range with the recent expansion and summertime seasonal hiring, Merrill said.

"They've been hiring, it seems like, nonstop for months," state labor economist Dan Robinson said. "They've been having a hard time finding bodies right now."

Not everyone is concerned about Wal-Mart competing for employees.

Workers with the specialized knowledge of books that Hearthside Books needs probably aren't applying at Wal-Mart or Fred Meyer anyway, said Susan Hickey, co-owner of the two-store company.

"I don't think it will impact our search for staff," she said.

Watson said Alaska Industrial Hardware has been trying unsuccessfully to hire an outside salesperson for three months, but that person needs to have such specialized knowledge that they're not likely to be looking at Wal-Mart anyway, he said.

Robinson said the competition for employees is showing up in the numbers he studies.

"It's a much tighter job market that it used to be," he said.

July's unemployment rate of 3.8 percent is among Juneau's lowest in years, Robinson said. That's driven in part by the strong local demand, helped out by economic growth in Oregon and Washington that has attracted local workers as well. In Alaska, Bristol Bay Borough had the lowest unemployment rate at 1.5 percent.

The owner of downtown's Foxfire clothing store said she's seen the tight market already this summer. Owner Pam Brewer ran an ad in the spring for summer employees and got far fewer responses than usual.

"Normally, we'd have a dozen to 15, and in the spring we only had three, so something happened there," she said.

"In talking with some of the other people, they've felt it too," Brewer said.

Fortunately, from those three she got the two summer helpers she needed, she said.

"I pay above average, so that helps," she said.

A state survey of wages found an odd fact about retail wages in Alaska. Retail was one of the very few occupations that paid less in Alaska than elsewhere.

An Alaska Department of Labor study recently found 2006 hourly wage rates for retail sales people in Alaska were $10.98 and hour, compared to $11.19 in Washington.

Fred Meyer stores in Washington are unionized, but those in Alaska aren't. But labor economist Dan Robinson said he thought the reason for lower wages in Alaska was more likely the amount of temporary tourist industry jobs, rather than lower pay at the big chains.

"I really doubt that Fred Meyer and Costco pay less per hour here than they would down south," he said.

• Contact Pat Forgey at 523-2250 or patrick.forgey@juneauempire.com.



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