Lincoln * Institute

Lowman S. Henry

Lowman S. Henry

Chairman & CEO
Lincoln Institute
of Public Opinion Research

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Town Hall Commentary

Help Wanted

Surging economy creates need for more qualified workers


by Lowman S. Henry
 

Drive through any major commercial district and the signs are everywhere: car dealers looking for mechanics, restaurants looking for servers, big box stores seeking cashiers. Job openings are not limited to retail - tens of thousands of high paying manufacturing jobs remain unfilled due to the lack of skilled labor.

The Trump economy is booming: unemployment is at its lowest level since the 1960s, the equity markets continue soaring to record highs, inflation remains under control. The Fall 2018 Keystone Business Climate Survey finds Pennsylvania businesses are sharing in the good times as 71% say the economy is on the right track and 40% say the state's economy has gotten better just over the past six months.

The challenge, however, is finding qualified workers to fill the new jobs created by the improving economy. Forty-nine percent of the businesses surveyed indicated they currently have open positions and of those 73% say they are having difficulty finding qualified employees - 28% say they are experiencing significant difficulty.

This is happening despites state policies which threaten to dampen job growth in the commonwealth. Governor Tom Wolf is proposing to increase the threshold at which overtime pay kicks in for salaried workers from $23,600 annually or $455 per week to $31,720 annually or $610.00 per week. The threshold would then increase further in 2021 and 2022.

Two-thirds of the business owners/Chief Executive Officers responding to the survey said they have not heard of that proposal. Thirty-five percent said that policy change would have a negative impact on their business - 19% said the impact would be significant. Likewise, persistent proposals to increase the state's minimum wage would take its toll on job creation. Twenty-one percent said they have already taken steps to reduce their reliance on minimum wage employees. It should be noted that 56% already pay above minimum wage.

Passage of the federal Tax Cuts and Jobs Act of 2017 has generated tax savings for just over half (51%) of the businesses participating in the 2018 Keystone Business Climate Survey. As a result, 40% say they have increased employee compensation, 23% have expanded their business and a like number have hired new employees. Another ten percent have expanded employee hours.

Regulatory relief is also playing a major role in the current economic expansion. Sixty-five percent of the business leaders say they have experienced some relief from their federal regulatory burden. Still, over-regulation remains the second most frequently mentioned problem confronting state businesses. Seventeen percent said over-regulation is their most serious problem coming in second only to the 34% who cited the inability to find qualified workers. High taxes came in third at 12%.

Legislative steps have been taken to ease the re-entry into the job market of those who have committed relatively minor crimes, served their time and now seek to find employment. Despite the tight labor market businesses are not more willing to hire such individuals. Equal numbers - 8% - they are more willing or less willing to hire those with a criminal record, 72% said their views have not changed. Likewise opinion is split on whether such individuals should have relatively minor offenses removed from their criminal record. Forty-three percent said such offenses should be removed, 46% said they should not be removed.

Business Conditions

The 2018 Keystone Business Climate Survey found optimism over the direction of the state's business climate continues to surge. Looking back to the Fall 2016 survey - taken just prior to the election of Donald Trump to the presidency - just 5% said business conditions in Pennsylvania were better than they were in the preceding six months - 50% said business conditions had gotten worse.

Fast forward to the current poll and 40% now say business conditions have improved in the last six months, 7% said they are getting worse and 51% said they remained about the same. Those numbers are an improvement from the Spring 2018 Keystone Business Climate Survey in which 27% said business conditions had improved, 19% said they had gotten worse. Looking ahead six months: 30% expect business conditions to continue improving, 16% expect them to get worse, 50% expect conditions to remain about the same.

As reported above, Pennsylvania employers continue adding to their workforce. Twenty-eight percent said they employ more workers than they did six months ago; 11% said fewer; 57% said they employ about the same number of workers. Looking ahead: 37% project adding to their workforce, 6% forecast a reduction.

Over the past six months sales are up at 50% of the companies participating in the survey, they decreased at 16% and stayed about the same at 32%. Looking ahead six months, 47% project increasing sales while 13% expect their sales to decline.

Job Approval Ratings

President Donald J. Trump continues to receive strong positive job approval numbers from respondents to the Keystone Business Climate Survey. Seventy percent gave him a thumbs up, with 23% offering a negative assessment. The numbers flip for Governor Tom Wolf: 70% hold a negative view of his job performance while 20% offered a positive assessment.

Pennsylvania's two United States Senators also receive vastly different job approval ratings: 59% give positive reviews to Senator Pat Toomey; 62% hold a negative view of Senator Robert P. Casey, Jr.

Statewide constitutional or "row" officers all enjoy net positive job performance ratings - although as it typical most respondents offer "no opinion" on the relatively low profile positions. Attorney General Josh Shapiro holds a 36% positive/19% negative rating; Auditor General Eugene Depasquale a 26% positive/12% negative review; and state Treasurer Joe Torsella has a 16% positive/10% negative ranking.

Among legislative bodies, the job being done by the United States Senate is viewed in a negative light by 74% of the respondents; 76% hold a negative view of the job being done by the United States House of Representatives. Both the Pennsylvania Senate and the Pennsylvania House of Representatives hold a 20% positive/57% negative rating.

[b[Mid-Term Election

When asked "If the General Election for Governor of Pennsylvania were held today for who would you vote?" 61% of the owners/CEOs indicated they would cast their ballot for Republican nominee Scott Wagner; 16% would vote for incumbent Governor Tom Wolf; 17% are undecided.

In the race for a U.S. Senate seat from Pennsylvania, Republican challenger Lou Barletta is the choice of 63% of the respondents while 18% would vote to re-elect Robert P. Casey, Jr. Fourteen percent are undecided.

Methodology

The Fall 2018 Keystone Business Climate Survey was conducted September 15, 2018 to October 15, 2018 with 118 businesses participating. Of that number 81% are the owner of a business; 12% are the CEO/COO/CFO and the balance a state or local manager. Thirty-eight percent of the responding businesses are located in southeastern Pennsylvania; 16% in southwestern Pennsylvania; 14% in southcentral Pennsylvania; 10% in northeastern Pennsylvania; 9% in northwestern Pennsylvania; 6% in the Lehigh valley; 5% in northcentral Pennsylvania and 3% in the Johnstown/Altoona area. Complete numeric results are available at www.lincolninstitute.org.

Permission to reprint is granted provided author and affiliation are cited.