Business Should Be Booming — If Only There Were Enough Workers For The Job
Solstice Wood Fire Pizza in Hood River, Ore., made it through the depths of the pandemic. And now that Americans are eating out and doing all the things that had been off-limits, this should be a booming time for owner Aaron Baumhackl.
Instead, Baumhackl is facing an unexpected problem. He's struggling to find all the workers he needs to churn out his pizzas, and he's losing valuable business.
"The demand is like we've never seen before," says Baumhackl. "It would have been a record-breaking year."
But with just 60% of his usual workforce, Baumhackl says he can only open 4 1/2 days a week. He's also turning away more than 80% of his usual catering business.
"We say 'No, no, no' all the time," he notes.
It's a common complaint. Restaurants, beauty parlors and factories all have plenty of customers right now but not enough workers to meet the demand.
The Labor Department said Friday that U.S. employers added 850,000 jobs in June, including 194,000 in bars and restaurants. But overall payroll employment is still 6.8 million below its pre-pandemic level.
The unemployment rate inched up in June to 5.9%.
Not all employers are having trouble hiring. When the American Sign Museum in Cincinnati posted a "Help Wanted" sign for a facilities manager, it received more than a hundred applications.
"We've been overwhelmed by the response and thankful there are so many people who want to come and work at museums," says Cindy Kearns, the museum's director of operations.
But many other businesses are struggling to find labor.
Some are paying a premium to attract new people. The job search website Indeed found the number of employers offering bonuses to new hires has more than doubled in the last year.
"It does show there's plenty of employers who are ready to throw money at the problem to try to get the workers they need," says AnnElizabeth Konkel, an economist with the Indeed Hiring Lab.
Konkel notes that many employers prefer to offer a hiring bonus because it's a one-time expense, while increasing wages carries an ongoing cost. But many businesses say they're doing both.
Getting by with two cooks
The Wacky Knacky Diner in Osage Beach, Mo., near the Lake of the Ozarks, boosted wages to $20 an hour, then added health benefits and a retention bonus.
But owner Valerie McCann still had trouble recruiting line cooks.
"I typically have five cooks and I was down to two," McCann says. "So we were drastically limiting the amount of people we were seating."
McCann says applications finally picked up in the last three weeks, after Missouri halted the supplemental unemployment benefits that Congress authorized during the pandemic.
"In fact, I've hired four new people and I'm still planning to hire a few more," she says.
Missouri was among the first states to stop paying the extra $300 per week in jobless benefits. More than two dozen other states have since followed, or plan to do so this month. The enhanced benefits are set to expire nationwide in early September.
States ending the benefits early hope to push more people back to work, but the effect so far is unclear. The scheduling software company HomeBase found somewhat stronger job gains last month in states that left the benefits in place.
The good news in the hiring challenge
Many forecasters expect hiring challenges to work themselves out in the coming months.
A survey by Indeed found most job-seekers plan to start working within the next three months, but many are waiting for schools to reopen, vaccination levels to rise or for their personal savings — boosted by unemployment benefits and three rounds of federal relief payments — to run out.
"It may take longer than some firms anticipate to find qualified workers. But we do think that logjam is temporary, as firms and workers find each other again," said Nela Richardson, chief economist for the payroll processing company ADP.
That's little comfort for seasonal businesses that depend on summer tourism for the bulk of their income.
At least Hood River restaurant owner Baumhackl is philosophical.
He thinks both restaurants and the broader economy are due for a reckoning on the value that service workers provide and how they should be treated and paid.
What's more, with his pizza oven dark on Mondays and Tuesdays, Baumhackl is getting a rare chance to enjoy the outdoor amenities that are usually reserved for the tourists.
"I went rafting with my kids," he says. "My manager went camping with her husband for the first time in a long time. Things that in the hospitality biz, you normally don't get to do in the summer. You're normally taking care of all the guests who are doing that."
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