COVID-19 pandemic leaves employers struggling to find workersHelp wanted sign in front of Sapori di Napoli in downtown Decatur on May 18, 2021. Photo by Dean Hesse.
DeKalb County, GA — The COVID-19 pandemic hit some industries, like the service and hospitality industry, hard. Many restaurants were closed for weeks or months in 2020. As businesses are opening up more and welcoming back more customers, they still find themselves struggling. Now, it’s challenging for employers to find workers.
The Lost Druid in Avondale Estates opened in June 2019, just several months before the beginning of the COVID-19 pandemic. The small batch brewery started out with two full time employees and three part time employees, which was considered a full staff.
The brewery was down to three employees in May, Lost Druid owner Stacia Familo-Hopek said.
The kitchen staff has been the most challenging for Familo-Hopek to retain and attract. She has put out job postings for kitchen staff positions but either doesn’t get any applicants or applicants don’t show up for an interview, she said.
“It’s been the biggest struggle, I think, to fill the kitchen jobs and it’s holding us back from being able to expand our hours because the two folks that I have working currently, I can’t ask them to work more,” Familo-Hopek said.
Experts say they aren’t sure what is causing the shortage but there are several theories that the current unemployment benefits are keeping people at home, parents are struggling to find childcare and some individuals still have concerns about COVID-19.
But businesses will continue to struggle without having a sufficient number of workers.
“I think this has been a learning experience on many fronts for everybody and just trying to think about how we can fully come out of it because businesses will continue to struggle, particularly in the hospitality field, if they can’t find the staff,” Familo-Hopek said.
The Comet Pub and Lanes and Twain’s have also suffered the impacts of being short staffed. Both establishments were shut down for the better part of six months in 2020, owner Uri Wurtzel said.
“We are, in the last several weeks, starting to see things pick up and we’ve been able to expand our capacity in both places to some degree,” Wutzel said. “But it was pretty bleak for most of the last year. It was not clear that we would make it.”
Before the pandemic, both businesses had about 40 to 45 employees and their most skeleton crew was 10 to 15 workers. The businesses now have about 20 employees, Wurtzel said.
“That’s a lot of people that didn’t stay with us either because we just didn’t have work for them or they found something else,” Wurtzel said. “In the last, I’d say, month or so we’ve been like many places struggling to find people who want to come back into the service industry.”
Wurtzel said he has seen the same challenges in Philadelphia, Pa. He has also seen restaurants in Decatur try to open up more hours but have to reverse course because they don’t have enough staff members.
“It’s tough because this has been such a rough year and now when people are starting to come out again it’s frustrating to not be able to be ready to welcome everybody who wants to come in,” Wurtzel said. “We’re not quite there yet.”
Restaurants are not the only businesses to be impacted by a lack of workers. Help wanted signs are also up at grocery stores. Other public-facing businesses are struggling too.
Paris Campeau, owner of Indigo Wellness in Kirkwood, has also struggled to maintain a full staff. The small boutique spa had 17 employees when she closed her spa for about two months in 2020. Upon reopening last year, she had five employees.
“With that, I also did not take a PPP loan because that was one of the stipulations, you had to have the same number, not the same employees but the same number of employees and I knew this was not going to happen because the people that work for me are contract based,” Campeau said.
Campeau struggled to find employees before the pandemic but said hiring is worse now. She currently has 10 staff members, which is about two-thirds of her full staff.
“It’s a struggle. I get it. We also work in a full-contact business,” Campeau said.”We’re touching other people so I know some people just don’t feel comfortable coming back because you can’t six feet distance yourself.”
Campeau added that she respects individuals’ sense of safety and said everyone has to do what they think is best for them.
“I’m hoping that as the world continues to get more vaccines and opens up, more people will apply for the jobs,” Campeau said. “I’ve put out job posts but I haven’t even had people respond to them, which is weird.”
Labor Shortage and Federal Unemployment Benefits
Business owners don’t know what is causing this labor shortage. They just know that people aren’t applying for jobs or aren’t following through, Familo-Hopek said.
Wurtzel agreed and added that part of the challenge could be that people are still getting unemployment benefits or they have found jobs in other industries.
The total job listings on the Georgia Department of Labor website were 219,795 on May 31. According to WSB-TV, there were 70,000 jobs listed one month before the pandemic began.
Some speculated that the federal unemployment subsidy was discouraging people from going back to work.
In mid-May, Governor Brian Kemp announced on Fox News that beginning June 26, Georgians receiving unemployment benefits will no longer receive the extra $300 per week from the federal government, the Athens Banner-Herald reported.
Federal jobless subsidies combined with Georgia’s unemployment program paid up to $665 a week, which is the equivalent of $16.63 an hour, according to the Atlanta Journal-Constitution.
“Part of me is glad that the state is cutting funding so maybe people will start going back to work but then it’s still scary and so many people are still playing catch up,” Campeau said.
The unemployment benefits are more than most people make. The Georgia Department of Labor says 80% of people receiving benefits previously made $20,000 a year or less, which is just under $10 an hour, the AJC reported.
“It does give people a little wiggle room not to take a job that has really low wages and is not safe,” Heidi Shierholz, former chief economist for the U.S. Department of Labor, told the AJC.
Kemp’s decision came a few days after a coalition of statewide business organizations led by the Georgia Chamber of Commerce released an op-ed saying that companies can’t find workers because unemployed Georgians are receiving more money in state and federal jobless benefits than they could earn by going back to work, according to the Athens Banner-Herald.
Ray Khalfani, a research associate for the nonprofit Georgia Budget and Policy Institute, told the Athens Banner-Herald that Georgians are returning to work but many are struggling to find new jobs or return to old ones.
Khalfani also warned that Kemp’s decision to end the federal benefits could drive more Georgia residents into poverty and depress the consumer spending that was bolstered by the increased benefit.
There is no evidence to support the claim that the unemployment benefits are disincentivizing people from returning to work, said Tom Smith, associate professor of finance at Emory University.
“There’s no evidence, statistical evidence, that the current unemployment numbers are actually keeping people away from work,” Smith said. “Now there’s 16 states that are now removing that additional $300 unemployment insurance number hoping that that’s going to incentivize people to go back to work.”
People are returning to work and the unemployment rate has gone down since last year.
“What we’re seeing is the number of people who are filing for first time unemployment is going down quite considerably,” Smith said. “I know that they’re hiring lots of workers. It’s job growth relative to where it was last summer.”
Smith said that some people aren’t returning to work because they have household obligations to take care of, especially when children were in school.
“Once we get schools reopened, daycares reopened, summer camps reopened then these people can get back to work,” Smith said. “At this point they can’t. They physically can’t be in two places at once.”
Rising Wages Could Be a Possible Solution
Many jobs were cut early in the pandemic, mostly low-wage, service positions but now as Americans are getting vaccinated, consumers start to travel and dine, businesses are racing to hire more workers, according to the Atlanta Journal-Constitution.
While Georgia hopes that cutting the unemployment benefits encourages people to get back to work, local companies are increasing wages to attract employees.
Some high-profile retailers and fast-food establishments nationally announced higher pay, including Target, Starbucks, Costco, Walmart, Chipotle and McDonalds. Local employers are starting to do the same.
The AJC reported that in April, Piedmont Healthcare announced plans to hire nurses and respiratory therapists. The healthcare center offered hiring bonuses of up to $30,000 for each person, based on expertise, experience and staying on the job for a certain amount of time. In May, Piedmont Healthcare saw job applications rise by 20%.
Restaurants have also increased wages. Alpharetta-based pizza chain Your Pie hires people without experience and has struggled to fill open slots. Starting pay at the pizza chain was $7.25 an hour, but it is now typically $8 to $12 plus several dollars an hour in tips, the AJC reported.
But not all business can afford to simply raise their wages to attract more workers. Small businesses can’t necessarily afford to pay more or pay the other costs associated with payroll. Business owners also don’t want to inflate the wage for some positions because then it’s not sustainable, Lost Druid owner Stacia Familo-Hopek said.
The Comet Pub and Lanes and Twain’s owner Uri Wurtzel agreed.
“Places that have been struggling just to stay open for a long time, it’s difficult to significantly increase wages all of a sudden when you’ve been scratching just to stay above water for a long time,” Wurtzel said.
It’s a balancing act between trying to find workers but also not ballooning payroll while restaurants are not at full capacity, Wurtzel said.
“Our employees that we have have been great and have really powered through this time,” Wurtzel said. “The pressure on them and on everybody in the restaurant industry is pretty intense in terms of balancing health concerns with coming into work everyday and earning a living.”
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