High flyin' retail

[kayjayuu.livejournal.com]

In case the video above doesn't embed (thanksalot, LJ, I myself can't see it), Menard's hiring local workers [Eau Claire, WI] to commute weekly to North Dakota store:

...in Minot, that is part of the problem. There are too many jobs and not enough people to fill them.

"You hit that labor pool and you start running out, and we have this need, and we think this is the best way to fill it," said John Leonausks, the Marketing Director for Menards.

The oil boom is a mini gold rush in a way, driving people out west for work. Leonausks says it is a way to bring some of that prosperity back to Eau Claire.

"From our perspective, we have planes, let's find people in Eau Claire and get people hired in Eau Claire and fly them out there to take care of those jobs," he added.

The starting wage is $13 per hour. On top of that, a weekend bonus, extra for working in the yard, overtime and meal stipends, too.

From the Leader-Telegram:

In Eau Claire, a community in which residents often cringe at the idea of commutes exceeding 15 minutes, Menards officials concocted the idea of the air commute of more than 500 miles one-way in response to being unable to find enough staff for their 16-year-old store in Minot, where the latest unemployment rate is 2.2 percent, as many workers flock to higher-paying jobs in the Bakken oil fields.

MacMartin said he is aware of oil companies that arrange charter flights to bring work crews to the area every two weeks and recalls that Olive Garden brought in workers from other locations temporarily to staff a new restaurant in Minot, but he hasn't heard of other retailers going to such lengths to find employees.

"In Menards' case, they are reacting and trying to do whatever they have to do to make their business model work," MacMartin said.

...

MacMartin, who insisted the good far outweighs the bad when it comes to North Dakota's booming economy, said he sees no end in sight for the state's rapid growth.

And Menards is committed to continue fueling its planes if that's what it takes to do its part to keep fueling the boom.

"This is going to be a permanent solution for as far as we can see," Leonauskas said.

North Dakota has an unemployment rate of 3.1% (Oct); Ward County, where Minot is located, 2.4% (Sept). The oil patch in the western part of the state has it the worst/best -- some counties have registered rates below 1%. Those who aren't working are either unable or unwilling, neither of which is necessarily "a bad thing," aside from those who are unable and would like to work, which a bad thing from a personal perspective.

(In before "But it's North Dakota!" -- not every state has the weather and amenities of Southern California, so why in the world would anyone go anywhere else for a job? Just sayin'.)

In the spirit of TP, I'll take the opportunity to point out the evils of capitalism: a company with private jets, money to send 50 employees 600 miles away, and pay for their room and board... so why don't they pay their employees in Eau Claire better? Or any one of the other states in which they are located? Answers in the comments below, I'm assuming. ;)

I'd posit that like most chain stores, this kind of variance in pay is directly related to the profitability of the store: if, for example, Eau Claire's Menard's brought in the kind of revenue that Minot's store is doing, they would need more employees; if the employees were hard to find, they'd raise the pay to attract applicants. If the potential workforce can get more money elsewhere, either through other employers or other means, then why bother working at Menard's? As for Minot's case -- it's either this or they can't serve the community and may as well close down in the face of stunning demand for their products and services.

John Menard started building post frames to put himself through college in 1959. So he didn't start out with a silver spoon in his mouth. Whether or not he's a bad man now (see environmental and labor complaints at the wiki page, he was one of the 99% who were struggling to make a life for themselves fifty years ago. Most of us start out that way, I assume, and I doubt we intend to become an evil capitalist along the way.

But in the meantime, let's break down what's being offered here, from the comments at the page linked (Tyler Polzin, ten year employee who moved out to Minot before the fly-in option was offered):

Perspective from a 10 year veteran on what the fly-ins would be making, best case scenario: If they worked in the Receiving/Outside Yard areas, they'd be making $14.50/hour, +$2.50 more on weekends, +20 hours of overtime, +$15/day for food, plus a free hotel stay WITH continental breakfast/pool/hot-tub, plus they get to be home in Eau Claire two or three days a week depending on their schedule. I'm grossing anywhere from $1,300-$1,500 a week and am on track to bring in $75,000 next year. Somebody in management could catapult that into 6 figures.

That they're still looking for applicants in this economy boggles my mind.

(ETA: sorry, I meant to put an LJ cut in the initial post. Mea culpa!)

Comments

[mutive.livejournal.com]

Well, as to why they're looking for applicants, I think there are a few reasons:

1. Not everyone who is out of work knows that there are these jobs out there.

2. Even people who do need a job may not want this particular job. This is true for a great many jobs, including some that pay a lot of money and chronically have a hard time finding workers.


As for the flight vs. pay more, I suspect a lot of it has to do with how freaking hard it is to get people to relocate. This is not entirely irrational. Relocating sucks. You have to typically sign a year lease or buy a new home (which isn't cheap, and is pretty risky if you're not sure the job will be around for a full year, or at least long enough to make relocating worthwhile). You have to move away from your family and friends, which may not be a big deal if your recreational activities were playing video games for a few hours after work, but may be brutal if you have a working spouse + small children who you kind of want to see from time to time. In this case, it might be easier to convince people that making $14 with an air commute every few days >>> earning, say, $20/hr but having to relocate. (Esp. as I'd guess that there aren't a whole lot of commercial flights that go out to Minot as is, so arranging a similar situation for yourself would be quite difficult/expensive.) I'd guess that Menards' has tried both scenarios, for what it's worth, and has probably found that it's flat out cheaper to fly people in for a week at a time than it is to try and hire in Minot's for more money.

[telemann.livejournal.com]

Yeah, I HATE flying. I'd prolly just opt to stay at the hotel for the duration, and bank OT ;)

[mutive.livejournal.com]

I did something similar when I had a job that had me "commuting" about 2,000 miles. (Although to be fair, if I didn't fly home every other weekend, I got an extra $400. So that wasn't such a bad incentive, either.)

[telemann.livejournal.com]

I'd imagine customers in that part of the country would mean working in a retail job would be pretty cool, and not a nightmare.

[hcastaigne.livejournal.com]

It's really not that hard to figure out why. From this article local to the area: (http://www.minotdailynews.com/page/content.detail/id/563998/Report--rent-out-of-reach-for-many.html)

"Data from 'Out of Reach' supports what we know about North Dakota. Low-income families are still struggling to find decent and affordable housing in communities across the state," said Tom Alexander, board chairman of the housing alliance and project director at North Dakota Center for People with Disabilities in Minot. The report was misleading in counties in oil country, where average renter wages exceeded the Fair Market Rent because of the number of high-paying oil-field jobs. Average renter wage was as high as $33.55 in Slope County in southwestern North Dakota. The wage needed to afford a two-bedroom apartment in McKenzie County was $11.23, while the average renter wage there was $21.68. In Williams County, the average renter wage of $19.68 adequately covers the $11.63 an hour needed to rent a $605 two-bedroom apartment in the unlikely scenario that such housing can be found. Vacancy rates in Williston and Minot hover around zero, Carbone said. Meanwhile, rents skyrocket.

Due to the boom out there in Minot, rent prices have gone up almost 2000% and making $14.50/hour won't cut it, even with all of those benefits thrown in. As one local has questioned (http://www.city-data.com/forum/north-dakota/540969-minot-housing-prices.html):

What is going on with the housing prices in Minot and the surrounding areas? Since I moved away 3 years ago housing prices have gone up at least $50,000 if not more. Why are folks getting so greedy and trying to sell houses for so much money. For an average newer home your looking at around 225,000 -250,000. Wages in Minot can't support those kind of prices. I'm looking at moving back there but prices are more expensive than they are here in Florida, and you make less money in N.D. to boot. That's crazy.

Good luck finding a non-pricey place to live in a boom town. If you have a boom, you're going to pay out the nose for many things.

[gunslnger.livejournal.com]

Yep, when there's high demand for a product that is in short supply, prices go up, like they're supposed to.

[rowsdowerisms.livejournal.com]

Oh wow!

[houndofloki.livejournal.com]

No one's saying that isn't true. But it's the reason why a business like a Menard's paying fairly low wages can't find workers in Minot - nobody can afford to live there on that kind of salary. One of the unintended consequences of a sudden, huge boom like what's happened in ND.

[kayjayuu.livejournal.com]

Which is also a product of the supply/demand chain.

But people can afford to live there on that kind of salary. They can't probably afford to move to a new or newly open property at the moment on that kind of salary. There are plenty of middle- and upper-middle class residents who were there from the beginning and continue to be comfortable. There are also plenty of working class and lower income people who were there from the beginning and continue to live like they always have. It's the mobility of those latter two categories that are in question, really. And even that will settle out eventually, it's just difficult right now.

In fact, right now, if you have all the money in the world you can't necessarily find a place to live. There's not a good inventory of housing available, period.

Menard's can't find workers because everyone is able to find higher paying jobs. Hell, my town can't find workers because they are able to find higher paying jobs out in the western part of the state (and there is very little housing here either). This very lucrative Schwan's route here in town is unfilled because our route man found a business to work into owning out there. *cries*

[hcastaigne.livejournal.com]

here are also plenty of working class and lower income people who were there from the beginning and continue to live like they always have.

Assuming they own their own property and don't rent. If you rent, I'd say you are screwed.

[kayjayuu.livejournal.com]

Which is why my next two sentences were " It's the mobility of those latter two categories that are in question, really. And even that will settle out eventually, it's just difficult right now."

[gunslnger.livejournal.com]

Not really a problem though, as long as gov't doesn't intervene to "fix" the nonexistent problem. It'll sort itself out in time.

[houndofloki.livejournal.com]

Actually, it may well not sort itself out in Minot. There's no way of knowing how long the oil boom in that region is going to last, and people are reluctant to risk a ton of cash putting in infrastructure and housing that will be worth a fraction of what they spent if/when the boom ends.

BUT - I agree with you that there's no call for the government to get involved. This is one of the consequences of a boom-town economy, and places like Menard's are probably just going to be stuck with the obnoxious choice of either flying in retail employees or paying them something absurd like $40 an hour. Hopefully they're making up for the payroll loss in increased sales.

[gunslnger.livejournal.com]

Oh, it will sort itself out, there's just no way to know how long that will take. People call for gov't intervention in these things because it takes "too long" for them to want to deal with and they want a quick "fix" for it.

[hcastaigne.livejournal.com]

Why yes - it's called "Close the store and send catalogs, because the cost of flying people in and out giving them this luxury treatment is inefficient and will negatively impact my managerial bonus."

[kayjayuu.livejournal.com]

Er. No?

This is not just a fancy home decor store. Menard's is the only lumber yard/supplier in the area, period. They will not close the store, because it's the #1 Menard's in the country. They will do whatever it takes to supply their customers because the need is nearly insatiable.

This is not a luxury, this is a necessity.

[anfalicious.livejournal.com]

Some of our mining towns have rent of $1000 a week for a room and the local burger joint is still paying $14 an hour. If you don't have family there who owned a house before the boom you'll never afford to live there. It's gotten to the point that people are living in tents on peoples' lawns. There are no real moves to force the mining companies to do any community development and create infrastructure that would support more housing; things like roads, schools, power lines and the like are still expected to be coming out of the government budget.

[mutive.livejournal.com]

It doesn't help, either, that a lot of the time, you don't even know how long the boom is going to be going on for.

So it's pretty risky to put in a lot of infrastructure. You don't want to spend millions or billions just to abandon it a few years later.

There are a lot of companies that sell large tents and mobile homes that can be used to house workers. (And a percentage of miners live out of campers pretty much permanently while working.) It's pretty crazy, but does make a certain amount of economic sense.

[anfalicious.livejournal.com]

The economic development in the Pilbara is going to continue for at least another generation, and it's foreseeable that other industry will continue after the boom is over. Broome is becoming the new Gold Coast.

And I'm not talking so much about the miners here; they live in tough conditions but are compensated for it.* It's all the other people who live around there that service that industry (and therefore make having that industry possible) that aren't being paid by miners who are suffering.


*Side note, I was teaching in Arnhem Land the same time as a friend was mining in the Pilbara; our living conditions were fairly the same, our hours worked fairly the same, the physicality of our work wasn't too much different and our qualifications took similar amounts of time and were about as difficult (he's a sparky). The main difference was that I got one week home every three months compared to his one week a month and his wage was 3 times what mine was.

[kayjayuu.livejournal.com]

The oil boom out here is conservatively estimated to be a good 20-25 years. Without more discoveries, which are being looked at.

[mutive.livejournal.com]

Oh, totally agree. The miners know what they're getting into and are compensated accordingly. And the original land owners are rubbing their hands together with glee. It's the original residents who didn't own land/small businesses/whatever who are screwed.

I'd assume that the development will keep going, too. But it's taking a pretty big risk to relocate for even a $20/hr. job. (Even if you're pretty sure you'll still have the job 10 year's time. Also a huge bet.) So I can see how the plane trips make economic sense for workers. Take a $20/hr job away from home and hope you're with it long enough to compensate for relocating or...take $14/hr and live where you are. For an awful lot, the second option is more attractive.

(Yeah, it is kind of weird how miners are far better compensated than teachers. I do get that a lot of people can't stand to be in mines, but I keep wondering WTF I was thinking when I went for a harder engineering degree than mining engineer. But...oh well.)

[luvdovz.livejournal.com]

What's the reason for North Dakota's unstoppable rapid growth? Is it oil alone?
(Foreigner asking here).

[gunslnger.livejournal.com]

Pretty much, yep. There's no other reason to go there, except for the military base.

[luvdovz.livejournal.com]

So, a one-trick-pony economy that rests upon a single sector, and that would instantly collapse as soon as something bad happens to said sector. Oh well then.

[kayjayuu.livejournal.com]

Yeah, no, the growth would stop at this point, yes. Our economy was pretty stable before oil, though. Our agricultural sector is second to none, and we didn't have a housing bubble. We also have natural gas, coal and wind energy, so while oil is the big boy, we weren't going anywhere before this happened.

[luvdovz.livejournal.com]

Sounds like the Norway of North America, yay!

[kayjayuu.livejournal.com]

Er. Not really, lol. There's plenty here and plenty of reasons to come here, but it takes a certain kind of person looking for a certain kind of life.

[gunslnger.livejournal.com]

I've been through there when my brother was stationed up there. I didn't see any reasons to be there. :)

[kayjayuu.livejournal.com]

Yeah, pretty much. We've been at a stable low population (or decreasing) for decades until this.