The labor shortage affects the ability of small businesses to keep pace with demand
Sophie Evanoff, owner of the Vanilla Patisserie in Chicago, has a hard time finding workers.
Source: Sophie Evanoff
She managed to keep her bakery business alive during the pandemic, but now Sophie Evanoff, owner of Vanilla Patisserie in Chicago, can’t keep up with the demand.
The culprit: their inability to find workers.
“It’s to the point where we decline orders,” Evanoff said.
It has 20 employees at its main location and needs around eight to ten more. It has not reopened its second marketplace in the city’s Ogilvie Transportation Center because it has no staff.
She even increased the pay by 20%, she said. Still no luck.
“We’re not making a profit,” said Evanoff.
She blames the added government benefits, like the additional $ 300 in unemployment and economic reviews to keep workers out, as well as the people who quit the industry during the shutdown.
However, the impact of the role of unemployment benefit on labor shortages in industries across the country is under debate. Last week’s weaker than expected job report has led many to blame the government for the benefits.
However, economists argue that it is more nuanced. Other reasons could be inadequate childcare for children who at least temporarily still go to school virtually, as well as fear of the virus.
In addition, research over the past year has found an extremely limited effect of the $ 600 benefit in preventing workers from finding work.
From students to seniors, workers stay away
Kurt Alstede examines his crops at Alstede Farms in Chester, New Jersey.
Kyle Holman / Alstede Farms
At Alstede Farms in Chester, New Jersey, owner Kurt Alstede also struggles to find help. He usually has 30 employees all year round but increases the seasonal hires by about 200 in the spring.
Alstede said he gets a fraction of the applications he normally gets from college students as well as seniors and everyone in between. He addresses a number of reasons, including students who practically studied from home all year round and therefore already have a job, and parents who cannot work.
Alstede is also hiring workers from other countries and there have been visa issues this year, he said.
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The result is a greater burden on its already stressed staff. Alstede was considered a must-have business and stayed open throughout the pandemic.
“The people who are here, who form the backbone of the business, will be exhausted and have had a year of exhaustion,” said Alstede.
Competition for the limited labor supply will also affect consumer wallets.
“Wages are rising and we have adjusted prices to reflect this,” said Alstede, who has increased workers’ wages by about 20%.
Joanne Kwong, President of Pearl River Mart, speaks to customers at the company’s newest location in Soho, New York City.
Pearl River Mart
Joanne Kwong, president of the family-run Pearl River Mart in New York, has another hiring problem to resolve: commuting safety concerns.
The company, a collection of trading centers selling Asian goods, employs mostly Asian-American workers. The recent outbreak of anti-Asian hatred has made planning for their current staff difficult as some want to avoid the city’s subways. She also had to change the opening times of the shops so that they close before dark.
The answer to their job postings was “grilling,” said Kwong.
“It’s always difficult to find people, but we’ve always had a steady range of candidates to choose from.”
Of course, that’s not the only reason she’s feeling the hiring crisis. Potential workers could live in multi-generational households where they are not all vaccinated and parents have concerns about childcare, she said.
“The commuting, fear of the virus, and maybe a safety net at home have kept Americans in Asia from perhaps applying for jobs,” she said.
Truck drivers wanted
Steve Sperbeck, General Manager of ERL Intermodal in Utica, New York, is struggling to find drivers.
There was a shortage of truck drivers even before the pandemic. Covid has just added to the labor shortage, said Steve Sperbeck, general manager of ERL Intermodal based in Utica, New York.
Even though the company pays drivers between $ 70,000 and $ 130,000 a year, Sperbeck still has seven or eight out of 50 trucks without drivers.
While $ 600 unemployment benefits may have hurt recruitment last year, he doesn’t think the $ 300 would have much of an impact. Instead, he believes this could be due in part to fears of exposure to the virus, as well as an aging trucking workforce.
This even affects the possible expansion of the company. Sperbeck said he could add 50 more trucks thanks to the demand if he had the drivers.
“There is so much freight volume,” said Sperbeck, who largely attributes it to consumer spending.
ERL Intermodal is now turning to driving schools to find workers, which entails additional training costs for the company. They also offer signing bonuses.
“We never had to do that,” said Sperbeck. “We used to have a choice of garbage.”
Restaurants hit hard
Steven Williams (L) and Matt Glassman (R) recently reopened the Greyhound Bar & Grill in Los Angeles after being closed for over a year.
Restaurants are particularly hard hit by the labor shortage.
In Los Angeles, Matt Glassman, owner of The Greyhound Bar & Grill, described an incredible number of people who planned interviews and didn’t even show up. He recently turned on two dishwashers and one before even getting on his first training shift.
People who make a large chunk of their income from tipping may also be concerned about returning to the industry as the businesses may not be at full capacity yet.
A restaurateur believes he has the answer to this problem.
James Mallios, managing partner of Civetta Hospitality, charged an 18% management fee at three of its restaurants in New York City over the past year: Amali in Manhattan, Bar Marseille in Queens and Calissa in the Hamptons on Long Island’s East End. The fee is a substitute for tips, although customers can add more tip to the bill if they are inclined to tip, he said.
This has allowed Mallios to pay his employees between $ 20 and $ 55 an hour so they don’t depend on how busy or quiet it is on a particular night, he said. The company has had 40 to 50 employees since June 2020 and was recently able to hire employees for a new opening soon.
“I can’t even imagine if we did it any differently,” said Mallios.
“Business was so up and down,” he added. “In what world does someone take a job where they are paid 50% or more from week to week?”
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