• Kirk Gaw

Local Worker Shortage A National Trend After Pandemic Here's Why

By Kirk A. Gaw

Recently, during a Walkerton Facebook Group discussion many people commented about the current labor shortage. It seems that many area businesses are unable to meet staffing demands. According to Tara Lynn Elder who works in retail management her busy convenience store could not find new hires to fill their late night shifts. "Casey's" ended up reducing their hours from 5AM to 11PM.

She said, "No one is applying. I can tell you that. I worked there 15 years in August and was the store Manager for the last year and not many have been applying the last 2 months. I had 4 apps in the applicant pool."

Look Trailers in Middlebury - Reuters

Other local residents like Bonnie Riggs, and Rosemary Berndt felt that the reason applicants are not applying is because of COVID related unemployment benefits and stimulus money are not motivating the workforce to return? Could this be true? Let us examine the situation. Even after raising wages many restaurants and grocers cannot fill positions. Manufacturers are also affected but, not to the degree of direct customer service. Restaurants are using alternative recruiting techniques and financial incentives to try to staff a returning dinner rush.

The Indianapolis Business Journal recently wrote that food-service businesses shut down completely during the pandemic or thinned their ranks to match their reduced operations. They are now trying to build their teams back quickly, putting many eateries in competition for the same labor pool. Is this one cause? Another Walkerton Facebook Group member said that she thought people are not returning to the job market because many parents are choosing to stay home with their kids?

According to Labor Department statistics manufacturing employment suffered a much less severe blow than service sector jobs last spring when the COVID-19 shutdowns first brought the economy to a standstill. About one of every 10 factory jobs were eliminated in the shutdowns versus roughly one of every six service jobs. Factory employment is 4% below pre-pandemic levels, a deficit of 515,000 jobs, versus 5.5% for overall U.S. employment, with a total shortfall from February 2020 of 8.4 million positions. Other indicators also point to a tight labor market at factories. Earlier last month, the Institute for Supply Management said its index for national factory activity jumped to its highest reading in 37 years in March, with its gauge of manufacturing employment rising to its highest level since February 2018. A recent Reuters News Service article by Timothy Aeppel examined the situation at "Look Trailers" in nearby Middlebury, IN. Company President Matt Arnold quoted, "Factories around the country are seeing vacancies go unfilled. I’ve never seen it this bad.” "Look builds utility trailers, which are in heavy demand from small businesses such as landscapers and plumbers as well as hobbyists who use them to haul motorcycles or other bulky sports equipment." The lack of workers means lost business for Arnold and his customers. One of his dealers normally has about $2 million in inventory on his lot, but right now only has about $200,000. The average price of a trailer is $3,400.

Look Trailers in Middlebury - Reuters

Wages at his trailer factories are already far above state or federal minimums. The average starting pay is $19 an hour, while workers with skills such as welders make $24 an hour or more. “People talk about the oil boom in the Dakotas - how workers would get in their car and drive out to get jobs,” he said. “We have the same thing here, a jobs boom. But nobody’s coming.” NPR did a news story in February with Julia Pollak, a labor economist at the employment recruitment site "ZipRecruiter" regarding the struggle to find workers. She said, "Most job seekers are looking for remote work." "The problem is that those are not the jobs available right now." In fact, only 1 in 10 job postings in the ZipRecruiter marketplace offers remote work as an option, she says. "There's this huge gap between the kinds of conditions under which people are prepared to work and the kinds of conditions that they actually find in the jobs that are available," Pollak says. That is leading to a mismatch in filling jobs, and it's contributing to the painful, slow recovery in jobs. "We are 10 million jobs in the hole," she points out. "So ideally what you'd want to see is the number of job openings to be much higher to compensate." For many workers, there's an understandable fear of getting sick and then infecting kids or other family members at home.

"A pandemic is a shock both to labor demand and to labor supply, and it's a really significant shock to labor supply," Pollak says. "There are many, many people who have pulled back and are deciding to sort of wait out this year and come back to work when the conditions are right." Another angle to consider is that baby boomers are heading into retirement, a trend that has been putting strains on the workforce for years. For some, certain jobs don’t appear lucrative enough to take on the added health risks and mental toll. For others, work-life balance has been thrown further off-kilter by the increased demands the pandemic has placed on them at home.

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