FAST-FOOD WORKERS RECEIVE signing bonuses, paid vacations and 401(k) accounts. Salesclerks are in such demand that managers at the mall are poaching one another's employees. And the unemployment line--well, there really isn't one. Virtually everyone here who wants a job has one. Is this a worker's paradise? No. Just Fargo, N.D. In October, greater Fargo-Moorhead--as statisticians call this area of 160,000 people in the Red River Valley on the North Dakota-Minnesota border--became the nation's first metro area to record an unemployment rate below 1 percent since the federal Bureau of Labor Statistics began its current system of record-keeping in 1990. With unemployment at .9 percent, the bureau says, just 957 people here were jobless. ""We're humming,'' says C. Warner Litten, retired manager of the Fargo Clinic and a local civic booster.
As Fargo goes, so goes the nation? If you want to know what a zero-unemployment economy could be like, this is the place to look. Full employment here actually means full employment, not the 95 percent that most economists have long thought was the best society could do. Creating workers is more urgent than creating jobs. If you can write software code, manage a bank or design electronic components, Fargo could really use you. Companies are so desperate that they're using alumni lists from area colleges to make come-on-home pitches to North Dakotans who left the state after graduation. A number of employers used these lists to invite former North Dakotans visiting home for the recent holidays to a job fair, disguised as a ""holiday social.'' It's gotten so cutthroat at the West Acres Shopping Mall that retailers are offering signing bonuses to lure away salespeople from the store down the hall. Kohl's department store hopes that if you like to shop there, you might also like to work there. It's using a mailing list to offer employment to its best customers.
How has Fargo come to practically snuff out joblessness? Certainly it's riding a national wave. December government figures peg U.S. unemployment at 4.3 percent, the lowest it's been since February 1970. Fargo has managed to do even better, thanks partly to a clutch of colleges and hospitals, the sort of operations that are relatively immune to economic downturns. It's also a retail magnet for the entire Upper Plains: its per capita retail spending is usually among the nation's highest because so many people from the region go to Fargo to do their shopping. Fargo's steady economic growth stands in stark contrast to the boom and bust of farming and oil in the region, both of which are deep into bust right now. That means much of Fargo's success has come at the expense of the dying small towns of the plains. ""We get accused of killing 'em off,'' says Mayor Bruce Furness. ""But it's inevitable. There are no opportunities there.''
But Fargo hasn't just sucked the life out of its neighbors. Its economy has become increasingly diversified and high tech. Software companies like Great Plains, a homegrown operation employing 700 here, and Navigation Technologies, which makes mapping software, have brought a touch of Silicon Valley to the area. At least six banks built new branches or broke ground for new headquarters in 1998. Even manufacturing got a boost, helping to set a record for construction in Fargo last year: Cardinal Glass built a 140,000-square-foot plant, and Solid Comfort, which makes hotel furniture, completed a $2.5 million plant expansion.
The infinitesimal jobless rate has turned many bosses into supplicants for workers' favor. Dalton Ross, a partner in six Taco John's restaurants and three Godfather's pizzerias, has converted an assistant manager into an ""employee-retainment specialist'' who develops loyalty-building programs like family nights, when employees can bring the spouse and kids in for discounted food. Ross now lets his managers hire job candidates on the spot, immediately after an interview, instead of calling them later with a decision. He gives bonuses of a couple of hundred dollars to any employee who stays more than 90 days. ""We've tried just about everything,'' Ross says. And he now pays, on average, $7.50 an hour, compared with $4.50 five years ago. ""The only logical way to attract more folks is to raise wages or fringe benefits,'' says Deane Foote, vice president of Paragon Decision Resources, an Illinois business-relocation firm that has studied Fargo's labor market.
That logic is also starting to make some employers leery of Fargo. Three years ago Cargill, the Minneapolis agricultural trading company, was looking for a place to consolidate its financial operations. It dropped Fargo from contention because of the low unemployment rate. Fargo officials, arguing that there were plenty of workers who would trade up to Cargill's jobs, ran a test ad in the local paper. In one week 2,500 people replied. Cargill came to Fargo and now employs 225 people.
To help expand the labor pool, Fargo officials and local employers are building a Skills and Technology Training Center to train workers as welders, phone technicians and computer programmers. Fargo has also become a resettling point for Bosnians, Somalis, Sudanese and others--389 of the state's 537 refugees this year settled in Fargo. Sixty-three percent don't speak English, but within six months, 90 percent of able-bodied refugees are working.
Fargo hasn't been immune to layoffs. Case Corp., which makes agricultural equipment, laid off 25 production workers permanently and shut down its Fargo plant for December when Russia slashed an order for combines from 500 to 100. And the week before Christmas--happy holidays!--Federal Beef Processors announced that it was closing its West Fargo plant, which employs 283 people. Economic-development officials' reaction: good riddance. The plant was plagued with environmental problems. And anyway, with-in days of the plant's closing announcement, a local turkey-processing plant was running newspaper ads offering jobs to Federal Beef employees. You can't even stay fired in Fargo these days.
IF YOU HAVEN'T BEEN to chef Daniel Boulud's fabulous new Restaurant Daniel on East 65th Street yet--and of course you haven't; it doesn't even open to the public until Jan. 21--too bad, you're already too late. For one thing, you probably won't even get in the door, now or ever. The restaurant takes reservations for just one month in advance, and is already fully booked from opening night onward; each morning last week it opened the phones at 9 to accept reservations for a day exactly one month in the future, and each morning by 9:15 all the tables were gone. Besides, the cool people you'd like to impress by dropping the name of the hottest new restaurant in New York have probably been there already. Just last week the most influential person in New York City, the restaurant-guide publisher Tim Zagat, led a party of nine to a choice table, where they had Boulud's fabulous squab with foie gras (grilled salmon on spinach for Zagat, who's on a diet). He seemed mildly surprised to learn afterward that the restaurant isn't even officially open yet. ""It looked pretty busy to me,'' he mused. ""Come to think of it, I knew most of the people there.''
Restaurants are booming all over the country. Last week, in fact, Commerce Secretary William M. Daley designated 1999 the Year of the Restaurant, honoring both the industry's contributions to the American economy and his own hobby of eating out--but New York is an exceptional case. Restaurant Daniel, according to published reports, cost more than $10 million to open, making it possibly the most expensive new restaurant in the history of the city. Thus it represents a significant vote of confidence in one of the mainstays of the city's economy, the recycling of money made on Wall Street into luxury and status. Its prices (Zagat estimates an average check of $71 for a meal with one drink) will do nothing to detract from New York's position as the most expensive city in the nation to eat out, although still a bargain compared with Paris or London. Alan Stillman is CEO of the New York Restaurant Group, which owns six restaurants, including Smith & Wollensky--the highest-grossing steakhouse in the country last year, although it may soon be challenged by rival Sparks, which recently expanded from 275 to 800 seats. ""I've been in the restaurant business for 30 years,'' Stillman says. ""Last year was the best ever.''
""I can't keep up with it,'' says Ruth Reichl, the chief restaurant critic for The New York Times (the job is too big for any one human metabolism, so there are several others). ""I was out of town for two weeks over the holidays, and now I've got a list of 25 new places I haven't been to yet.'' Adhering to a strict code of anonymity, she takes her chances with the rest of humanity when it comes to reservations, and as a result ends up eating dinner at absurd hours, like 5 or 10:30, because those are the only times available--that is, if she can even get through on the phone in the first place. ""Did you ever try calling Nobu?'' she inquires, of the superfashionable Asian fusion place downtown where you can sometimes poke at your little nubbins of exquisite raw tuna in the presence of part-owner Robert De Niro. ""You can't get them on the phone.'' She might consider doing what some people do who want to eat at Babbo, the hot new Greenwich Village trattoria whose chef is Food Network stalwart Mario Batali. Rather than take their chances on the phone, customers sometimes show up in person at the stroke of 10 a.m., when the reservation book is opened for the day, in hopes of snaring a table a month down the road.
Last week, though, Reichl might have had some luck at Union Pacific, a ""new American'' place whose young chef, Rocco DiSpirito, she considers a ""genius.'' A few tables were actually available, at the pathetically unfashionable time of 6:30, on a day's notice. This occasionally happens in winter, when snowstorms strand celebrities by the thousands in Aspen. Union Pacific offers what is possibly the most expensive meal to be had in New York, a $350 ""Menu Luxe Louis XIII,'' including three kinds of caviar, Japanese Kobe beef and woodcock with black truffles (the price includes a $125 glass of Remy Martin cognac)--as well as a contender for the most expensive single dish, a white-truffle risotto with gulf shrimp fondue, a $49 supplement to the standard $59 prix-fixe dinner. In most cities the first week in January is a slow time for restaurants, since people don't have any money left to go out after the holidays. But in New York, that's just when the year-end Wall Street bonuses start getting spent. And if the bonuses weren't that spectacular this time, after a somewhat shaky third quarter for the stock market--well, on the evening of the day the Dow Jones went up 233 points . . . there were, it seemed, plenty of people out spending next year's bonus.
IT ALL BEGAN SO SIMPLY. AN ATLANTA lawyer and his wife wanted to add an all-weather porch to the back of their two-story home to better enjoy the serenity of their Japanese gardens. In the fall of 1996, they hired an architect who suggested adding a breakfast room and renovated kitchen to make the concept integrate ideally with the back of the house. Estimated tab: $100,000 for work to take 90 days. Now they needed a contractor. The one they found, after three others said they were too jammed, started two months after he said he would. Then his crew quit to launch its own company. Then he began taking time off (""an anniversary trip, a mother-in-law in the hospital, all the classics,'' says the lawyer). Then he confessed the IRS was auditing him. Then he declared bankruptcy. Then his shoddy work had to be ripped out by a new remodeler. Final tab: $170,000 for work ending last Nov. 16--772 days from the day the idea of a blessedly peaceful porch was born.
This couple isn't the only one to see its nest-feathering plans go awry. Thanks to rising incomes and plummeting mortgage rates, new-home sales scored another monthly high last week, setting the stage for a third straight record year. And remodeling has become a $130 billion business nationwide, eclipsing new-home building in dollar volume. It's all great news for the economy--but not such great news if you want to take some of your Wall Street winnings off the table to hire a contractor and build something. Everybody's already tied up.
Pam Sessions, the owner of Atlanta developer Hedgewood Properties, knows all about that. Hedgewood built 300 homes in 1998, priced from $190,000 to $710,000. Sessions is shooting for 400 this year. But the time it takes her to build a house in the labor-squeezed market has grown from four and a half months in 1994 to six months now. All her sub- contractors--framers, electricians, bricklayers--are struggling to keep quality workers. Her cabinetmaker got so sick of the strain last year that she says he chose to go out of business. That brought a four-week halt to all Sessions's projects. She had hoped to finish 14 houses in 1998 at Edmund Park, a new subdivision near Emory University in central Atlanta, but ended the year with just six complete and six more underway. More than half of the workers at the subdivision are Mexicans or Mexican-Americans, industrious and often highly skilled migrants willing to work 10-hour days six days a week. How does Bob Courtney, Hedgewood's builder on site, communicate with his workers? With difficulty, says Courtney, who knows two Spanish words--""si and andale, which I believe means faster.''
Novelist Tom Wolfe, fresh from 11 years of waxing lyrical on Georgia, doesn't rule out the fantastic notion that Atlanta will eclipse New York and London some time in the late 21st century, as surely as London and New York eclipsed Rome. Whether you buy that or not, Roman roads weren't built in a day, and Atlanta's won't be either. At C.W. Matthews Contracting Co., a suburban road builder with 630 employees, backlogs are running at the highest levels in the company's 53-year history. ""We're all fighting for the same handful of people,'' says personnel manager Ray Rodriguez. To cope, the company added a 401(k) plan in 1997, raised the pay rate for beginning laborers from $6.70 to $7.75 in 1998, bought vans to provide free daily commutes from as far away as northern Alabama and guaranteed 35 hours of wages per week even if weather stops work. Even so, Rodriguez is short at least 75 experienced tradespeople--including truck drivers and heavy-equipment operators.
Which brings us back to the lawyer and his wife, as they ease at last into their porch furniture in balmy January. They leave you with this advice. Don't automatically take the lowest bid--and whatever you do, don't hire their original contractor. By the way, the view out the back looks great.