By most accounts, Taco Del Sol is one of the most popular restaurants downtown, with a noontime line often stretching up the steps and onto the Walking Mall, as customers await their fish tacos and mission burritos.

Yet owner Shalon Hastings said that more than once this fall, she's come close to not opening the restaurant for lunch.

The reason? Not enough staff to run the business.

Hastings enjoys "working the line," making tacos and burritos, but she'd rather not do it as frequently as she's forced to these days. Eighty percent of her time, she said, is devoted to workforce issues -- time she feels could be better spent improving her own business or opening a second location.

"If I could cut my time on the line by 50 percent, I'd be feeling good about the business and could concentrate on what's next," she said.

On the north side of town at home improvement store Power Townsend, longtime owner Mike Wall said the labor market is "way tighter" than it was as recently as five years ago.

He compensates by turning his hiring attention to older workers, who he says are experienced, have good attitudes and aren't as likely to leave quickly for another job.

"It used to be much easier to find people, but unemployment is low all over Montana," said Wall, who employs around 85. "Here, the state is expanding, the federal government is expanding at the fort and the airport, and then there's all this new retail."

Hastings starts Taco Del Sol workers at $6 an hour, with small increases in short order if a person proves reliable. She hopes a flexible schedule, fun workplace and free lunch can make up for a shortfall in wages compared to competitors. Wall won't say what he pays entry-level help, but notes that it's been more than minimum wage for a decade.

All across Helena, retailers who already find it difficult to find and keep employees are bracing for next month's opening of warehouse club Costco and home improvement giant Lowe's six weeks later; those two employers combined will bring another 250 jobs to the city's retail workforce.

The Helena labor crunch isn't limited to retail.

Newspaper classified employment advertising grew 16 percent in the last year, as employers across the local economy beat the bushes for workers.

"That is a trend we've seen the last couple of years, and given the growing economy of the region, we expect to see similar growth this year," said IR advertising manager Jim Rickman.

Sheldon Bartel, director of the Montana Business Assistance Connection (MBAC, formerly Gateway Economic Development Corp.), expects the local economy to add between 1,000 and 1,500 jobs in the next two to three years.

"The labor market is very, very tight, and it's not limited to just one sector," Bartel said. "We're seeing growth in retail, but also in professional, scientific and technical fields, in professional services and in healthcare."

By the numbers

The unemployment rate in Lewis and Clark County has hovered around 3.7 percent for the past several years, according to figures compiled by the state Department of Labor and Industry. That's been consistently a little bit below the state figures, and at least one full percentage point beneath the national numbers over that time.

To an economist like Brad Eldredge of Labor and Industry's Research & Analysis Bureau, an unemployment rate between 4 and 5 percent represents "full employment." At this level, all jobs are full, everyone who wants a job has one, and the only unemployed people are those just entering the workforce or those between jobs.

In other words, the only unemployment is "frictional," meaning people entering and leaving the workforce and between jobs, and not "structural," which indicates an underlying imbalance in the economy between the supply and demand of labor.

Since the local unemployment figure has been consistently beneath what's considered full employment, that means there are fewer qualified workers than there are jobs available.

"It's a seller's market for labor," Eldredge said. "(Workers) are going to be able to have more bargaining power than they would otherwise, and what you would expect over time is for wages to be driven up."

Because there's no excess of workers, businesses end up competing with each other to attract and retain employees.

But have wages gone up locally? Not as fast as they have around the state the last few years, though Eldredge is quick to note that the State of Montana wage freeze a few years ago affected thousands of Helena workers and was likely responsible for holding wage growth down despite the tight labor market.

Getting beyond full employment may be good for workers, but it isn't necessarily good for the economy as a whole, though most experts would say it's better than rampant unemployment. Businesses forced to pay higher wages to attract workers will doubtless pass those costs onto their customers in the form of higher prices for goods and services, meaning inflation can become a threat.

MBAC's Bartel said a tight labor market also hurts customer service. For one, employees are quick to jump to other jobs where they might make more money, meaning they don't stay in one place long enough to master the job. Also, employees know the labor situation is tight, meaning they don't feel they need to perform at as high a level to keep the job as they might otherwise.

Now hiring

So, if workers are so hard to find, why are there so many people showing up looking for jobs at the new box stores?

Costco, which has a reputation for excellent compensation for the type of retail jobs it offers -- a recent Fortune magazine story called the company's wages and benefits "the envy of big-box employees nationwide" -- reportedly drew more than 1,000 applicants for a little over 100 positions at its local store, opening at the end of November.

An assistant manager said this week that the store has not completed the hiring process, but declined to comment on how many people the store is hiring or how many Helenans had applied.

Across Interstate 15 at the new Lowe's, manager Kim Miller said this week the store got strong response from its first advertisement for workers, which ran in the IR a week ago. She admitted the timing of the opening, a little more than a month after Costco, was a concern.

"I was worried at first, but I've had very few people get here and say they're waiting to hear from Costco first," she said. "It doesn't seem to have affected us. People applying here either love Lowe's or love the kind of work we offer."

The store will employ around 130 people, she said, all but around 10 of whom will be local hires. She hopes to have most of the staff hired by early December, in time to stock the shelves for the store's Jan. 9 opening.

She said Lowe's pays an entry level wage of $7 an hour, more to experienced people.

Wanted: professionals

In some industries, the labor crunch is a problem that stretches beyond state lines.

Mike Cummings, human resources chief for the engineering firm Morrison-Maierle Inc., said there's a shortage of engineers across the country, with competition for talent getting stiffer every year.

"There isn't an engineering firm in the country that isn't concerned with its ability to recruit staff with relation to the amount of work available," he said. "It's a great time to be an engineer or a scientist or a surveyor."

Despite the shortage of professionals, the Morrison-Maierle local office has grown from around 82 employees three years ago to 113 today.

Cummings said the firm relies more heavily on college internships than in the past to identify potential new recruits, and is forced to make job offers much earlier than it did several years ago.

"We have to be in a position to make an offer six to 12 months" before they graduate from college, he said.

The firm also concentrates on retaining its older workers, which serves two purposes: it keeps positions filled, and it gives young professionals the mentors that many say are important as they start their careers.

Keeping baby boomers on the payroll in coming years could become key to filling jobs. State demographic trends seem to indicate that labor shortages will be a lingering issue in the state in coming years.

According to Larry Swanson of the University of Montana's Center for the Intermountain West in Missoula, while Montana's total population is expected to grow, the population between ages 18 and 64, generally considered the labor force, will plateau in 2011 and then start to drop.

"If the population at prime ages of work force participation is not growing, then the labor force itself cannot grow," a Swanson presentation says. "And if labor force expansion is constrained, so will be employment and labor earnings growth."

In other words, there may well be fewer Montanans of working age available to fill the jobs created to fill the needs created by a growing overall population.

John Harrington can be reached at 447-4080 or john.harrington@helenair.com.