County board warned of continued labor shortages

Worker shortages in Marathon County are only going to get worse over the next decade, unless policymakers at every level of government tackle challenges such as the lack of affordable childcare and housing.

That was the message delivered to the county board on February 16 by Dave Eckmann, CEO of the Greater Wausau Chamber of Commerce, and Dale Knapp of Forward Analytics, the research arm of the Wisconsin Counties Association.

Armed with a bevy of demographic statistics, Eckmann and Knapp made the case that the county faces a chronic deficit in the number of workers available to fill job openings in every sector of the local economy.

Knapp said the county is most likely to see continued stagnation, or even a decline, in the workforce as Baby Boomers continue to retire over the next decade.

“We don’t have enough young people coming up behind that group to fully replace them,” he said. “We don’t know exactly where we’re going to be, but we know it’s not going to be good.”

Since the end of the 1990s, when the economy boomed and migration into the state was strong, Knapp said the growth of the workforce dropped significantly and eventually flatlined. He said the Wisconsin Taxpayers Alliance, where he used to work, accurately predicted this trend in a 2004 article, which projected a decrease of 85,000 workers statewide between 2015 and 2030.

“We’re not going to get it exactly right, but we’re going to be pretty close in terms of what Marathon County and the state looks like, unless we make major policy changes,” he said.

A key age group – those 25 to 64 – declined by half a percent in Marathon County between 2010 and 2020, and over the current decade, that cohort is expected to drop by another 1 to 2 percent. Statewide, Knapp said the number of people in that working age category will decrease by an unprecedented 130,000.

Knapp said two major factors – declining birth rates and less migration from other states – is hurting Wisconsin and Marathon County. The state’s birth rate has declined every year since 2007, he said, and the county has seen a 9 percent drop in births since the 2000s decade.

“Economists say it takes about 18 to 20 years to create a worker, so when you’re looking at declining births, you’re looking at a smaller pool of young people entering the workforce in 18 to 20 years, so that’s a long-term challenge,” he said.

When it comes to migration patterns, Marathon County does better than average with the number of young children, but that drops off when older teens move elsewhere for college. Still, he said the county remains attractive to people in their 30s and 40s, referred to as “family formation years.”

“That’s one of your strengths. That’s something you can build on,” he said. “There’s something here that is attractive to families.”

Another major issue is a decrease in the labor participation rate, especially among younger men and women, Knapp said. Surveys show that a lack of affordable childcare is the driving force behind why more people are deciding not to work, he said. Working from home during COVID-19 convinced many people to exit the workforce permanently, he noted.

“They’ve realized that their family life is better off if someone is home with the kids, versus using daycare,” he said.

At the same time, the number of daycare slots in Marathon County dropped by roughly 700 to 800 over a 10-year period, and that problem will only get worse as daycare workers quit and seek better-paying jobs or demand more money, which drives up the cost of childcare, he said.

“Daycare, if you think it’s bad now, that challenge is going to get much, much worse,” he said.

Lack of housing is also a concern, Knapp said, as many retired Baby Boomers stay in their homes while younger families look for places to live. Building homes that are affordable for those families is especially challenging due to rising construction costs and interest rates, he noted.

“If you don’t have enough housing, people aren’t going to be able to move here,” he said.

Piggybacking off of Knapp’s presentation, Eckmann provided a local perspective from businesses who are struggling to find workers. He said the county doesn’t have the luxury of being near a major metropolitan area, but it does have strong manufacturing, agricultural, health care and financial sectors.

However, he said many businesses are at risk due to increasing rates of retirements and a shortage of younger, skilled workers “We are hearing – from the smallest companies to the largest companies – that they are looking at alternative locations,” he said.

Eckmann said it’s going to require a “strong public-private partnership,” with help from non-profits, to address these workforce issues. As an example, he said local governments could amend housing ordinances to allow for smaller lots and setbacks, and more multi-family options.

The county could also look at selling some of the land it owns to a developer and providing incentives to build affordable housing, he said. He said the county has a lot of selling points, like outdoor recreation and great public schools, but it still needs to compete with areas like the Twin Cities and Madison and Milwaukee.

Supervisor John Robinson, Wausau, asked Knapp and Eckmann what the county could do to increase access to affordable child care.

Knapp said some companies are experimenting with offering childcare services to their employees, but most of those projects are still in the early stages.

“We are seeing some examples, at least in the planning stages, of government getting involved with that,” he said, noting that “innovative” partnerships need to be considered.

Supervisor Jason Wilhelm, Athens, said he works in manufacturing and “it’s getting pretty bleak” when it comes to finding people qualified to do technical work.

“Companies seem to be poaching employees from other companies, and we’re not really seeking any new influx of people coming out of the tech schools,” he said.

Eckmann said the technical schools and colleges are “pipelining” students from K-12 schools to jobs in local industries, but it’s still difficult to find people with such a low unemployment rate.

“The sooner we get them plugged into the community…the greater likelihood they’re not going to leave,” he said. “We just need more people.”

Supervisor Chris Dickinson, Stratford, asked about the workforce differences between the urban and rural parts of Marathon County.

Based on projections, Eckmann said the outlook for rural zip codes is “not good,” primarily because the younger generation is moving to higher-population metropolitan areas.

“We are under significant threat demographically, especially in our rural communities,” he said.

Supervisor Thomas Rosenberg, Weston, said he remembers hearing the same concerns 30 years ago and wondered when action will actually be taken.

“Somebody’s got to light a fire somewhere,” he said. Knapp placed at least some of the blame on state lawmakers.

“Unfortunately, often there’s just not a lot of long-term thinking, and that’s a real problem,” he said. “I don’t know how you light a fire under them. We’ve been trying for 20 years.”