Strengthening Labor Market Means Tougher Hiring Competition for La Crosse Businesses
Amanda Michau and Simon Mongey, economists at the Minneapolis Federal Reserve, said during a webinar on "Labor Market Trends and AI Impact" on October 1 that the regional and national labor market is strengthening, but a fundamental shift in hiring patterns is intensifying competition for workers in the kinds of industries that form part of La Crosse County's economy.
The economists presented analysis suggesting a significant turning point in labor market dynamics. Michau highlighted that "quits are continuing to rise" while layoffs remain stable, evidence of what she described as "momentum towards the upside of an improving labor market."
She explained that workers who leave jobs without another position lined up are making a calculated bet on finding work, indicating confidence about future job availability.
More notably, the composition of hiring has shifted in ways that directly affect La Crosse-area businesses. Mongey detailed how hiring has moved sharply toward "retail trade, construction, and manufacturing" — a reversal from pandemic-era patterns when most job growth was concentrated in health and education sectors. For businesses in those cyclically sensitive sectors operating in the La Crosse-Onalaska metro area, the shift has profound implications.
As these sectors experience stronger hiring demand, businesses face intensifying competition to attract and retain workers. That dynamic is complicated by what economists call the "low hire, low fire" phenomenon — a pattern in which businesses are reluctant to lay off workers even as hiring remains cautious. Mongey noted strong productivity growth of 2.4% to 2.5% since 2022, suggesting employers are extracting more output from existing workforces while maintaining protective staffing levels.
Why is there caution despite an improving market? Michau attributed the reluctance to let workers go to optimism about future labor needs. "It's a sign of optimism, I think, that they expect that they're going to need those workers in the future, and they expect that when the future comes, they're going to be facing these constraints, these shortages of labor," she said. Mongey reinforced that labor hoarding reflects structural economic realities: an aging U.S. workforce, declining growth in the working-age population, and recent immigration trends that have reduced the available pool of workers.
For La Crosse businesses in retail, construction, and manufacturing — sectors experiencing the hiring surge the economists identified — the message is clear: the tighter labor market will persist. Rather than a temporary cyclical tightening, the economists suggested demographic forces are creating long-term pressure on labor availability.
The presentation was part of LADCO's ongoing effort to help regional business leaders understand macroeconomic trends affecting hiring decisions and workforce planning.
