NASHVILLE, Tenn. -- Here at the Opryland Hotel, that emporium built on the popularity of country music, business is good, but that has not stopped some executives there from singing the blues.
And several restaurants in the city are forced to close at lunch on some days because they do not have enough employees. Grocery stores, embarrassed by long waits at checkout lines, post apologetic signs to customers, and some fast-food outlets display "Now Hiring" signs as prominently as their logos.
Urban areas in the Southeast led the way as the region outpaced the national economic and employment growth rates in recent years, resulting in a shortage of low-paid workers.
The owners of the Opryland Hotel and theme park became so desperate for workers that in January they began advertising and recruiting about 2,000 miles away, in Puerto Rico, where the unemployment rate is about 13 percent. Then the Opryland owners, Gaylord Entertainment, bought a former motel so they could keep their promise that the new workers would get housing for up to 10 months at $50 a week.
"I was kind of surprised because the package offered by Opryland was so good, better than what they were offering at the Taj Mahal in Atlantic City," said Giorgio Zayas, 27, an experienced waiter who now works amid the Old South ambience of Rhett's Restaurant in the hotel and convention complex.
Mr. Zayas and about 300 other Puerto Rican workers live at the former 150-room motel. Each day an Opryland bus shuttles the workers the five miles to the 450-acre complex.
The hotel's extraordinary efforts to attract and hold workers is a sign of the best of times and the worst of times for Nashville. The economy has expanded so fast that scores of employers said that over the past six to eight months there were not enough workers within 100 miles to fill a host of jobs, mostly paying from the minimum wage of $4.25 an hour to $7 an hour.
"Summer will help some," said Rhett Smith, the chief executive of Southdown Corp., which employs 950 people at the 28 Burger King franchises it owns throughout middle Tennessee, as he anticipates a flood of students seeking jobs. "But the problem is deeper than that."
The problem, say a Federal Reserve Board economist, Thomas Cunningham, and others, is not only deeper, but broader, embracing urban areas across the Southeast like Atlanta, Charlotte, N.C., Birmingham, Ala., Jackson, Miss., and the Raleigh-Durham area in North Carolina, as well as many Florida cities.
Mr. Cunningham, who is in charge of the Federal Reserve's regional research group covering Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee, said the growth could be sustained as long as there were people migrating to the Southeast from the less prosperous regions of the country.
"But that out-migration from other areas into the South has stopped as those areas' economies have improved," said Mr. Cunningham. "The labor crunch is beginning at the foot of the Appalachians, and it looks as if it will eventually spread south to Atlanta and other cities."
In some areas where unemployment is running below 3 percent, Donald Ratajczak, an economist who is director of the Economic Forecasting Center at Georgia State University, said some employers of low-wage workers had raised hourly wages 20 percent to 25 percent in an effort to keep reliable workers. The rate of job growth is starting to slow because the region is "reaching the limits" of its labor market, he said.