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Growth the answer to Bozeman’s low wages, consultant says

By Eric Dietrich Chronicle Staff Writer Nov 16, 2016

If Bozeman wants to boost wages for its workforce, its best hope is encouraging economic growth so local industries have to compete for skilled employees, an economic development consultant told city commissioners this week.

At Bozeman’s current size, skilled workers tend to not have many employment options at different companies within their industry — meaning they’re in a poor position to negotiate for raises, said Alisa Pyszka of Portland, Oregon-based Leland Consulting Group.

“That’s why wages are low,” she said. “You don’t have a lot of competition right now.”

The conversation came as commissioners discussed a new economic development plan for the city, prepared by the consulting group as an update to the city’s previous guiding document, which dated to 2009.

With a critical mass of companies in particular sectors such as software development or outdoor gear manufacturing, employers often offer higher wages to keep employees from jumping ship to another job in their field.

Having more robust industry clusters would also make relocating to Bozeman an easier sell to highly skilled workers, Pyszka said, because they would have other local options if their initial job doesn’t work out.

She also said the city should think about its economy in terms of “local sector” companies whose primary customers are locals and who circulate money within the regional economy, and “traded sector” companies with products that generate revenue from other places.

In terms of economic development, she said, it makes sense for the city to focus on boosting clusters of traded sector firms, as they can pull money into the local economy and provide high-paying jobs. In turn, the employees of those firms can spend their wages locally, boosting local sector businesses such as restaurants and construction operations.
Source: Growth the answer to Bozeman’s low wages, consultant says | City | bozemandailychronicle.com