Reisch says low unemployment rate isn’t always good for the economy

Since January 2018, Missouri has added more than 28,000 jobs, with its unemployment rate staying steadily below the national average.

But more jobs can lead to other problems, state Rep. Cheri Toalson Reisch, R-Hallsville, said.

Amidst a low employment rate, Reisch claimed small-to-medium sized retail stores in Boone County have lost their employees to larger businesses new or expanding in the county.

"In Boone County, with a 1.7 percent unemployment rate, we can’t find enough people, we can’t fill all the job openings," she said during a House Special Committee hearing on criminal justice reform on Feb. 1.

Reisch is pushing a bill that would make it easier for stores selling liquor or lottery tickets to hire ex-felons who committed certain non-violent crimes.

We delved into several government-issued data and spoke with a couple of business leaders in Boone County to see whether she made accurate points in the statement.

She’s pretty close. Here’s why.

Unemployment rate

Reisch found the county’s 1.7% unemployment rate from homefacts.com. The website says as of September, Boone County’s unemployment rate is 1.7%. It doesn’t list a recent rate.

Becky Dunn, of the Missouri Department of Higher Education & Workforce Development, confirmed the unemployment number through September. In December,the rate rose to 2.4 %, according to a department report.

So, Reisch’s number was outdated. But the 2.4% rate is still notably low. The Federal Reserve calls a range of 3.5% to 4.5% to be a "natural rate." 

Law of the jungle

Casey’s General Stores and other small-to-medium sized retail stores have lost their employees to new or expanding larger businesses in Boone County, Reisch claimed.

"There are businesses losing their valuable employees because, say, Veterans United can pay more or have better benefits," she said.

An ongoing trend of employee shortfall among small-to-medium sized businesses is due to a rising wage competition with larger businesses, said Bernie Andrews, executive vice president at the Regional Economic Development Inc.

When incentivizing larger companies like Aurora Organic Dairy, the county government requires them to pay at least its average hourly wage of $18.83, or $39,196 an year, to most employees — and not many retail stores could afford paying that rate, Andrews said.

This employee’s migration to large companies and shorfall for small businesses isn’t a trend just for Boone County, he said. 

"There are more jobs open than there are people to fill them" locally and nationally, he said.

An average annual salary for a retail salesperson in mid-Missouri is $27,737, according to a January report by the Department of Higher Education & Workforce Development. Here are the area job openings that month that required short-term, on-the-job training and little to no work experience:

• 713: retail sales 

• 281: customer services

• 156: food services

• 142: laborers and movers

• 129: personal care aides

We also contacted both Aurora Organic Dairy and another large employer, Veterans United Home Loan.  

Sonja Tuitele, spokesperson for Aurora Organic Dairy, said her company hired 50 to 60 people for its new Columbia Milk Plant that opened in early 2019. When hiring them, she said the company gave preference to those with specific food manufacturing experience. 

Chris Cline of Veterans United Home Loans told us his company hired about 1,000 new employees in 2019 for its branch in Boone County. Those employees were hired for positions ranging from customer-facing production to information technology.

In the end, it’s a business law of the jungle — large businesses with better pay and benefits get employees they need whereas small businesses lose employees to the large. 

Our ruling

Reisch said, "In Boone County, with a 1.7 percent unemployment rate, we can’t find enough people, we can’t fill all the job openings."

She used an outdated number that has since grown, but it’s not that much different. 

The second part, verifying that Boone County retail businesses can’t find people to hire, is supported by open jobs numbers and a local expert. The big companies can pay more, leaving that quick store down the street scrambling for employees.