Just a few short months ago, chambers of commerce across Texas joined together with local businesses to ask Texas Gov. Greg Abbott to end pandemic-related extended unemployment benefits, arguing that potential employees were opting to stay home instead of apply for work.
Abbott did so, and as of mid-September, those benefits have ended. But a drive around Fort Bend County shows no lack of “Help wanted” signs displayed in businesses’ windows.
So, what has caused the lack of interest in some job openings in recent months? And what might fix it?
For Eric Morse, the owner of The Sauer Kraut Grill in Richmond, the issue goes beyond simple unemployment benefits. Rather, he argues, it’s a change in attitude, combined with the plethora of government benefits, such as local food programs, that incentivize people not to work, especially in tough industries like food service.
“I’m 52 years old, and not looking to take advantage of any system like that,” he said. “But if I’m 23 or 25, and have the choice to work a job or stay home with my family, I’m staying home. So many people’s decisions are motivated by what’s best for them and their family – the path of least resistance.”
Experts such as Erica Groshen, however, argue that the majority of the conversation about workforce issues has been reductive, and that a multitude of factors including a changing workforce, a mismatch in what businesses are looking for and what employees are searching for, and childcare demands, to name a few, have gone into creating the unusual situation the country finds itself in.
“The data suggests the states ending enhanced unemployment early has had little, if any, effect in job growth,” said Groshen, a senior economics advisor at the Cornell University School of Industrial and Labor Relations.
Data released in August by the Labor Department showed states that cut benefits have experienced similar and sometimes slightly slower job growth than those that retained the extended unemployment benefits, according to an analysis in the New York Times by Ben Casselman.
“The idea was that there were lots of jobs – it was just that people weren’t looking,” said Arindrajit Dube, a University of Massachusetts economist, in the New York Times piece. “That was the narrative. I don’t think that story holds up.”
Several issues on both the supply and demand sides of the workforce might all be contributing toward an unusual situation at present, Groshen said.
For instance, on the supply side of things, Americans are dealing with many new responsibilities brought on by the pandemic, she said. They might be more restricted in the types of jobs they can accept if they have been forced to stay home to take care of children or disabled or elderly family members, she said.
And those that caught coronavirus and are dealing with long-term health effects might have issues accepting some work, she said. More than 42.7 million Americans have tested positive for COVID-19 and another 680,600 have died since the pandemic began in March 2020, according to data provided by the U.S. Centers for Disease Control and Prevention.
Experts have found some people who contract the virus can deal with long-haul symptoms that can last for a year or longer, according to WebMD. Those symptoms might include everything from breathing issues, difficulty thinking or concentrating, sleep problems, heart palpitations and mood changes, to name but a few, according to the CDC.
Similarly, residents with underlying health conditions might be reticent to return to higher-risk professions than they were before the pandemic, Groshen said.
Still some people might have taken the downtime as an opportunity to consider what they really want to be doing for a career, Groshen said. Those cases are hard to quantify, but it’s clearly had an impact in some professions.
Pandemic-induced cuts to mass transit might also prevent some people from taking jobs they might have before, Groshen said.
Finally, many Americans might have taken early retirement rather than wait out the pandemic, and a high percentage of those cut in the early months were on temporary layoff rather than permanent terminations, Groshen said.
Then, on the demand side, there have been major changes to the workforce and many industries face crises of credentialism – that is, when a business is searching for employees with qualifications that might be above what’s actually necessary to perform the duties, she said.
“Experts predict over the next 10 years, 70 percent of all new jobs will be created in occupations where employers say they require a college degree,” she said. “Yet, less than half the workforce has a college degree.”
Employees without college degrees before the pandemic might have worked their way up into a high-skill position in the same company, Groshen said. But because they lack a degree, they have trouble finding a similar position now, she said.
“You have a waste of human capital,” she said. “You force someone into unskilled work when they have skills they’ve developed elsewhere.”
Locally, Morse said most businesses are still struggling to find employees.
Before the pandemic, Morse might receive between 10 to 15 applicants for an open position, but of late there haven’t been many, he said. Morse finally filled all his open positions after offering $20 per hour for his lead cook, and receiving an influx of applications after being contacted for an interview by a TV station.
But Morse is convinced something has changed with the workforce, he said.
“Other companies all competing for the same employees have really ramped up the need,” he said. “Even H-E-B is offering competitive pay, and they’re jobs that are oftentimes better-suited to some people. If I can work at Costco as a cashier for $20 per hour – what’s better, that or a kitchen?”
Even those employees that small restaurants do find aren’t as loyal as they were before, he said.
And it’s tough for a small business, existing on tiny margins, to compete with the pay of some of the larger corporations that have raised wages during the pandemic, Morse said.
“We’ve done one small price increase, by about a $1,” Morse said. “And, since then, we’ve seen a downturn in sales. I don’t know if it’s because of that, or other reasons. You hear comments like, it’s a great burger, but pricey. If I have to consider raising prices to meet higher labor costs, I think I’ll be out of business in a month.”