With unemployment at historic lows, there is a sense of urgency to fill a manufacturing workforce before companies are forced to move from the area.
WARSAW, Ind. — Each day at Zimmer Biomet headquarters, machinists on one robot-assisted factory floor churn out about 3,000 metallic knee parts. They are facing pressure to crank up the pace as the population ages and demand soars.
But the artificial-bone giant is grappling with a steep downside of the nation’s low unemployment rate: It is struggling to find enough workers, despite offering some of the region’s best pay and benefits. Forty positions sit open.
Other manufacturers in Kosciusko County, home to roughly one-third of global orthopedic device production, are running into the same problem.
The lack of laborers not only threatens to stunt the growth of these companies, experts warn, but it could also force them to decamp their home town in search of workers.
With the U. S. unemployment rate at a 16-year low of 4.3 percent, employers across the country are dealing with a dearth of potential hires. Economists say that talent shortages are growing constraints on the country’s economic expansion, especially as millions of baby boomers enter retirement.
But the shortage is particularly problematic in places such as Kosciusko County, where the unemployment rate rests at 2 percent. Of the county’s 41,136 adults who can work, 40,311 are employed, according to government statistics.
This region — a land of clear lakes, duck farms and medical device makers — escaped the industrial decline that rocked other communities throughout the Rust Belt.
It prospered, thanks to a local industry that proved largely immune to competition from China and Mexico.
But without more people to grow Warsaw’s business, the chances of companies relocating is “extraordinarily high, ” said Michael Hicks, a labor economist at Indiana’s Ball State University.
“That would devastate the area, ” he said. “We need to figure out how to bridge this rural place to the future.”
Kosciusko is only one of 73 counties in the United States with unemployment rates of 2 percent or lower, according to the most recent data from the Bureau of Labor Statistics. Many are in energy-rich counties in the Midwest and Colorado, where the fracking and natural gas booms have vacuumed up the workforce.
They also include communities that defy the heartland stereotype of industrial decay — like Warsaw, in northern Indiana, and Columbus, about three hours south.
Cummins, a global engine builder based in Columbus, recently opted to open its new distribution center an hour north in Indianapolis, where the labor market is much larger. (Columbus is the seat of Bartholomew County, which also has a 2 percent unemployment rate.)
Companies in Warsaw probably would not move manufacturing jobs abroad, said Hicks, who follows the region. Firms are more likely to transition to Indianapolis or Chicago, he said, since quality control is crucial for medical implants, and businesses want to protect their designs from foreign competitors.
Warsaw’s orthopedic device industry, a $17 billion cluster, started here in 1895, sprouting from a fiber splint company. Zimmer followed in 1927, bringing aluminum splints to the market (and merging with Biomet, another skeletal-part manufacturer, in 2015) . Other firms flourished, peddling hip implants, artificial femurs and bone plates for children.
Over the past 18 months, Zimmer Biomet has updated its plant technology to further boost efficiency. The neatly manicured campus has one-legged robots that swoop up and down like yellow flamingos, an employee gym, a cadaver lab and a coffee bar serving Starbucks.
