Business owners in Alaska say they’re seeing a rush of customers as COVID-19 restrictions ease.
But there’s a problem.
In what’s become a national trend, they say they can’t find enough workers to fully reopen, even though unemployment in the state remains historically high.
Some of the employers are boosting wages and offering incentives to bring workers back. Many blame the federal government’s generous unemployment assistance during the pandemic as a key reason for the labor shortage.
Economists say the situation is more complicated. They say that many people still won’t work for fear of catching COVID-19 and other reasons, and that it may be years before the gap between applicants and openings returns to pre-pandemic levels.
Misty Stoddard, an owner at Rain Proof Roofing in Anchorage, said at this time of year, she’d normally have about 100 applicants for a few dozen positions to complement existing crews.
“I’m lucky if I have 20 applications right now,” she said.
[Businesses cautiously prepare to boost operations as Anchorage lifts most COVID-19 restrictions]
Some people have told her they’d prefer to continue collecting unemployment benefits, she said.
“Why get up and go to work on a cold morning when you can hang out with your kids, go camping and still pay your bills?” she said.
The company doesn’t plan to turn down projects if it can’t find enough workers, she said. But a shortage will put a strain on other employees, she said.
“If we can have larger crews, we won’t have so much overtime, and we can get our guys a break,” she said.
Many business owners in the local hospitality industry have similar stories to tell.
Trina Johnson, owner of La Mex restaurant in South Anchorage, said she’s had trouble finding workers. She bumped up dishwashers’ pay to $14 an hour.
Other restaurants have recently “poached” a couple of workers from her business, offering more money, she said.
“Here we are a year later (after the pandemic) and the entire job market is upside-down,” she said.
In part due to the applicant shortage, Bruce Burnett delayed plans to open a second Bear Paw restaurant in downtown Anchorage this summer, he said Monday.
With a strong tourist season now unlikely, and the city planning road work outside the new site, the delay was a no-brainer, he said.
He said he can’t even find enough applicants to fully staff the already open Bear Paw Bar & Grill in Midtown Anchorage. The shortage is forcing it to close a couple hours early each night.
[Surging prices for lumber and building materials are slowing projects in Anchorage and driving up costs]
He said 20 workers might respond to a job listing, a few of those might show up for interviews, and one might ultimately accept and keep the job. He has no faith he’ll find the 50 or so workers needed to launch the new operation, he said.
Burnett and Johnson also blamed unemployment benefits for the shortage of applicants.
But local economists say that probably isn’t the full explanation.
A $300 federal boost to unemployment benefits, set to last through early September, has pushed traditional jobless checks to about $550 weekly, said Lennon Weller, an economist with the Alaska Department of Labor and Workforce Development.
The unemployment assistance is the equivalent of about $13.75 an hour for a 40-hour workweek, he said.
That wage is comparable to some positions in the hospitality industry but is less than most, state figures show. The hospitality sector appears to be having an especially difficult time finding employees, though they’re not alone, economic observers said.
About 40,000 people, 13% of the typical workforce this time of year, are collecting unemployment benefits in Alaska.
Nolan Klouda, director of the University of Alaska Center for Economic Development, said stories about worker shortages due to unemployment benefits are so widespread they can’t be discounted.
But he said research doesn’t support the view.
“There hasn’t been evidence so far that more generous benefits cause people to stay home and refuse work,” he said.
With child care facilities still not operating at full capacity, many parents must stay home with children, he said.
Also, many people can’t return to work for health reasons, perhaps because they or a relative likely face serious complications from COVID-19.
It may be a few years before the labor gap is resolved, he said.
Another reason for the lack of workers may be that amid the uncertainty of the pandemic, some people who usually travel to Alaska for summer work may be staying home with their family in the Lower 48, said Mouhcine Guettabi, an economist with the Institute of Social and Economic Research at the University of Alaska Anchorage.
He said it’s an unprecedented time, with the economy reopening but many people still hesitant to work.
He said more research is needed to help understand the reasons for the shortage.
[How the pandemic led to a rental car crisis just as Americans are ready to bust loose]
“It’s hard to say (that) the unemployment generosity has no impact on what’s being seen on the ground,” Guettabi said. “But it’s also misleading to say the solution is to cut unemployment benefits to zero.”
Kimberly Negus — an Anchorage mother of three, including a newborn — said she left her job at a tobacco store in June and hasn’t returned because of health concerns. Her 6-year-old son has high risk of serious complications if he gets COVID-19.
She said she hasn’t received unemployment benefits.
“I don’t feel comfortable putting my children back in day care,” she said.
She’ll consider returning to the workforce when the virus becomes less of a risk in the future, she said.
Some employers say the lack of applicants is compounded by a surge in business.
Laile Fairbairn, managing partner of four restaurants in Anchorage, including Snow City Cafe downtown, said it’s never been so hard to find staff. The restaurants need about 25 additional workers.
“The business has come back fast, so hiring up has been challenging,” she said.
She said the lack of applicants is pushing up wages in the industry.
To lure and keep employees, the restaurant group has had to increase pay to stay on the higher end of the pay spectrum, she said. The restaurants are offering bonuses to existing workers who refer friends.
She said she’s not sure what’s going on.
During the pandemic, the restaurant industry in Alaska endured rounds of restrictions that have forced restaurants to adjust staff quickly.
Some workers may be staying away because they question the sector’s stability, she said.
“I don’t know if the industry has seen a shift, or if this is an anomaly as we get out of COVID,” she said.