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Red-hot U.S. jobs market drives some to seek cooler options

Reuters  |  POCATELLO, Idaho 

By Ann Saphir

POCATELLO, (Reuters) - When joined Pocatello, Idaho-based Solar a few years ago, the plan was to move the to his home base of Salt Lake City so he could build it with easy access to Silicon Slopes' tech talent and

But when the new looked at the costs, he ditched that plan and decided instead to rely on drawn from local colleges and the nearby National Laboratory. By next year he plans to double the payroll to 50 employees as he moves the company's from back to eastern

Laungrath says he likes being the relatively bigger fish in a relatively smaller pool. "There's less competition for doing stuff like this in this neck of the woods."

But Luangrath's decision also reflects the reality of a U.S. market that is by some measures the hottest in decades.

The national unemployment rate held steady last month at 3.7 percent, a 50-year-low, figures released by the showed Friday. And though job gains fell short of expectations, at 155,000 in November they were still twice what some estimate is needed to keep up with population growth. [nUSN7NEEOA]

Wages are also up 3.1 percent nationally in the 12 months to November, Friday's report shows, though that masks much faster growth in bigger cities, especially those with tech-heavy labor pools.

Four of the top 10 counties with the biggest wage gains in the second quarter of 2018 were in the greater Bay Area, recent data from the shows.

And across the country many labor markets are so tight it is pinching companies' growth, according to anecdotal data released by the Federal Reserve last week. The Federal Reserve Bank of Minneapolis, for instance, reported that "labor availability was widely seen as the biggest obstacle to short-term growth."

Scarce labor pushes up wages, and "wage gains are likely to continue rising through 2019," said Andrew Chamberlain, chief economist at But, he said "it's a very diverse wage picture across the U.S."

And that has created openings for some companies willing to branch out.

A little over a year ago, executives at company realized they had a problem: the job market in was getting too hot, and the customer support staff they would need for their next bout of expansion were nowhere to be found.

So they headed for El Paso,

By October the firm had hired 65 employees in the border town, about a quarter of their total workforce.

Labor there is not only less expensive, explains Matthew Curl, but it is easier to hire and keep people. In San Francisco, it had recently taken him two months to hire just one customer support agent, who then left within a week for a slightly better paying job.

El Paso is "everything we'd hoped: a stable labor market with experienced people that know what they are doing," he said.

El Paso's average weekly wage grew 2.4 percent in the second quarter of 2018, to $733, figures show.

That compares to a 4.4 percent increase in Salt Lake, to an average weekly wage of $1,010, and a 9 percent rise in Silicon Valley's San Mateo, to an average weekly wage of $2,357.

With growth like that, more companies may try to solve their hot labor market woes with a move to a cooler spot like the

Indeed, the trend may already be happening: early this month Curacubby, a Berkeley, California-based startup that automates billing for schools, announced it will open an office in El Paso in January.

(Reporting by Ann Saphir; Editing by and Diane Craft)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, December 08 2018. 23:00 IST