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The economy in Bend, Oregon, is booming. Population has increased by 20 percent since 2010, driven by an influx of technology and service workers, and retirees, according to economist Damon Runberg at the Oregon Employment Department. This small city in the foothills east of the Cascades Mountains is also a prime tourist destination for skiers, kayakers, mountain bikers and microbrew enthusiasts.

All that growth is creating demand for workers in construction, retail, hospitality, professional services and manufacturing. Unemployment in the Bend metro area was at 3.9 percent in June, and a wide range of employers at all levels of the job market report they’re having trouble attracting and hiring qualified workers, Runberg said.

“The common misconception is that the tightness in the labor market now is in entry-level positions, where there are a lot of vacancies,” Runberg said. “But we’re also seeing it in more professional, higher-level occupations as well.”

Todd Taylor runs a family-owned civil construction firm, Taylor NW, with about 150 employees, and he said “there’s a labor shortage” in the region." He said that’s a big change from 2008, when the company opened its doors in the aftermath of the housing crash and in the midst of the Great Recession.

“Looking back, although it was challenging, there were plenty of good people that were in transition of jobs,” Taylor said. “And we were buying equipment at 25 to 50 cents on the dollar.”
 
He said during the downturn, a lot of skilled construction workers, commercial truck drivers, welders and pipe fitters left the area.

“They moved to North Dakota and the oil fields,” he said. “And in the last three or four years, a good portion of those people have come back."

Not enough, though, to meet employers' needs. 

Greg Lambert runs Mid Oregon Personnel, a staffing firm that serves sectors including manufacturing, professional services and hospitality. He said decades ago, Bend’s economy was depressed with resource industries in decline, timber mills shutting down and many working-class families in distress. But that has changed. 

“Now we spend thousands of dollars in recruitment costs per month, and we can’t find enough people to fill our interview sheets,” Lambert said.

He is trying to fill open positions that require little or no experience and pay $12 per hour to $13 per hour, well above the local minimum wage of $10.25 an hour, he said.

“We have people routinely tell us: ‘If you can’t pay me $15 an hour plus benefits to start, I can’t afford to get off my subsidies and go to work.'”

By “subsidies,” Lambert said he means government benefits, such as unemployment insurance, disability and food stamps.
 
But Runberg offered another explanation for some employers not being able to hire the workers they need.

“Businesses haven’t caught up to how tight the labor market is, and maybe they aren’t offering what they should be in today’s market,” he said.
 
 Lambert countered that many employers can’t raise prices significantly on their customers to pay for higher wages.

“There’s only a certain amount companies can raise their costs before they can’t hire people anymore,” he said.
 
Economist Jesse Rothstein, director of the Institute for Research on Labor and Employment at the University of California, Berkeley, said that with national unemployment below 4.5 percent and likely to go even lower in coming months, most employers will have to raise pay before long to remain fully staffed.
 
“Employers got used to paying low wages because they had so many years of excess labor,” Rothstein said. “And right now what they’re seeing is that they can’t find workers for those low wages.”

Heather Ficht, who directs the East Cascades Workforce Investment Board in Bend, is focusing on longer-term solutions to the current labor shortage by tapping into demographic groups that historically have been left out of the labor market.
 
“We’re working with individuals with disabilities, with criminal history, who are receiving food stamps,” she said, “people who aren’t necessarily the first line that employers go through” to look for job candidates. “How can we invest more to raise their skills to meet the bar? And we’re also working with businesses to understand that there are minor accommodations they can make to activate that population." She said that might include providing on-the-job training and assistance with transportation or child care.
 
For job seekers with marketable skills and a consistent work history, it is now a seller’s market.

Ron Marinello is construction worker who left Central Oregon after the recession to work in the North Dakota energy boom and has recently come home to Bend.

“I was a supervisor in the oil fields,” he said, “and I could have a job tomorrow. There’s so much out there, it’s almost overwhelming — anything from construction work to administrative. There’s a lot of technical stuff going on.”

Marinello is happy to be home “not having to tolerate the oil fields ... the weather and the environment.” He thinks he’ll make at least $25 an hour when he starts working again. But even earning that much, he said, he’ll be strapped for cash, because Bend’s housing and other living costs have soared in the continuing economic boom.

Follow Mitchell Hartman at @entrepreneurguy