Local Business

McHenry County labor force faces new challenges in improving economy

Declines in countywide labor participation tied to retirements, aging workforce

A leading industry in McHenry County, the manufacturing sector continued to see total employment numbers decline in 2015, as overall countywide labor force participation dropped by more than 2 percent from last year.

The McHenry County Workforce Network and Board detailed the labor force findings and many others in its newly released 2015 Labor Report designed to provide the county with an annual snapshot of area employment trends.

Although overall labor force participation dropped slightly from 2014, the report reflects a local economy slowly climbing out of the Great Recession challenged by workforce dynamics happening elsewhere across the country, said Jeffrey Poynter and Julie Courtney, two directors at the workforce agency who helped compile the report.

More employers across various sectors are looking to hire, but retirements, especially in manufacturing, outpace the number of younger workers entering the labor force, they said. Continued technological advancements also have limited employment in certain sectors, as businesses move toward more automated processes.

“Positive movement is starting for both job seekers and employers. There’s more of a need from employers to hire people,” Courtney said. “The pendulum is starting to swing back the other way.”

The challenge, they said, facing the network and other workforce groups in the county is to figure out ways to service, engage and find gainful employment opportunities for younger workers who may have been discouraged by the economic downturn in the late 2000s.

Overall, the report pegged the county’s labor force this year at 171,334 total workers, a 2.3 percent decline from the 175,380 workers who participated in the labor force last year. Unemployment, though, dropped and went from a seasonally-adjusted rate of 6.3 percent last summer to 5.4 percent this summer.

Median household income in the county, meanwhile, stayed relatively flat from 2014. The report put median household income at $76,145 in 2015, a slight decline from the level of $76,419 in 2014.

Those trends reflect what’s happening across Illinois and the country, Poynter and Courtney said. Even as the economy improves, household wages barely are rising with inflation, Poynter said.

Workers in McHenry County generally earn less than others in neighboring areas – a “double-edged” sword for companies who come to the county for cheaper costs but then can’t find qualified workers to hire, Poynter said.

The cost of living in McHenry County also can influence local labor force participation. The labor report found the cost-of-living for goods and services in the county is about 2.8 percent higher than the national average.

Average annual private sector wages in the county ($42,431) remain far below average wages in the Chicago area ($57,561) and Illinois ($55,407), the report found.

“There are some bright spots in this area, but it certainly adds to why people are leaving McHenry County,” Poynter said.

Typically, labor force totals should rise with drops in unemployment.

But in Illinois, the amount of new jobs added in metro areas throughout the state each month generally has not kept pace with unemployment declines.

Countywide labor force declines are a “big concern” for the workforce network, which would like to see the total grow, Courtney said. The large number of Baby Boomers retiring each day has compounded the issue, along with the sluggish job growth across Illinois, she said.

“We are still looking at the number of people who are leaving the labor force,” Courtney said. “That to me is a big concern. How do we reach the 18 to 24 year olds to let them know what types of skills are needed, what types of jobs are available here in their own county.”

The reports still shows manufacturing as the leading employer in McHenry County, making up 15.5 percent of the workforce.

The industry employed 14,803 workers in 2015, but it continued to contract for another year. County manufacturers in 2014 employed 15,968 people and in 2013, the sector employed 16,767 people, based on past labor reports.

Health care and social assistance – ranked as the third largest county sector in 2015 – is projected to add 2,126 jobs annually over the next 10 years, making it one of the fastest growing industries in the county.

Hit hard by the economic recession, the local construction industry also is expected to grow by 2.1 percent annually – the highest year-over-year percentage for any industry, according to the 2015 report.

Even though manufacturing continues to decline, the reasons this year for the job loss are different than past years, Poynter said.

The county did see some major layoffs in the sector throughout the year. Quad/Graphics laid off more than 550 workers when it closed the Brown Printing plant in Woodstock. Modine Manufacturing also let go around 130 workers when it closed its Ringwood facility in early 2015.

But for the most part, local manufacturers want to hire but can’t find enough new hires to replace the ones retiring, Poynter said.

Workforce mobility has also increased. For the first time in years, workers in the manufacturing industry are applying to companies offering higher wages, he said.

“The only saving grace to manufacturing is there are more people aging out of the system than actual job consolidation or losses,” Poynter said.

Loading more

Digital Access

Digital Access
Access nwherald.com and all Shaw Media Illinois content from all your digital devices and receive breaking news and updates from around the area.

Home Delivery

Home Delivery
Local news, prep sports, Chicago sports, local and regional entertainment, business, home and lifestyle, food, classified and more! News you use every day! Daily, weekend and Sunday packages.

Text Alerts

Text Alerts
Stay connected to us wherever you are! Get breaking news updates along with other area information sent to you as a text message to your wireless device.

Email Newsletters

Email Newsletters
We'll deliver news & updates to your inbox. Plan your weekend and catch up on the news with our newsletters.