Economist: Three reasons why businesses are struggling to hire workers

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JOHNSON CITY, Tenn. (WJHL) – The struggle continues for local businesses facing staffing shortages.

In downtown Johnson City, Red Meze is hiring for all positions. They’re not alone.

“I mean you can’t go past a single restaurant that doesn’t have a ‘now hiring’ or ‘looking for help’ sign,” said Red Meze Manager Cory Bachetti.

A sign in the window of Red Meze

Bachetti is stretched thin most nights as the only server and often has to help prepare food back in the kitchen as well. He says the restaurant calls back potential hires who drop off resumes, but they often don’t hear back.

“We’ve had maybe three people come in and they’ll work for one day. And then they just don’t come back. They’ll call and ask for their check, they’ll come pick up their check, and that’s it,” Bachetti said.

It’s not just restaurants and the hospitality industry that are struggling to hire.

Johnson City Heating & Air owner Kellie Ritsko says it’s been almost impossible to find skilled workers for their install crews, despite offering benefits and increasing pay based on experience.

“What we also found was that they would apply, and then we would call for an interview, they would agree to the interview, and then wouldn’t show up,” said Ritsko.

Ritsko says just about every business in their office complex can’t find workers. They’re collectively considering holding a complex-wide job fair just to try a new strategy.

“Because everybody we know is hiring. We’re all in the same boat,” said Ritsko.

Milligan University Professor of Economics David Campbell can think of a few reasons behind the surge in job openings and labor shortage.

He says one possibility may be the unemployment benefits offered by COVID relief packages.

“The maximum Tennessee state unemployment is $275 a week. The federal benefits are an additional $300. So if you annualize that, it’s going to come out to about $30,000 a year,” he said.

But Campbell is skeptical generous unemployment benefits are keeping all potential workers out of open job positions.

“You do have to meet a few criteria to be on unemployment,” he said. “That means you had to be separated from your position, you couldn’t necessarily just quit, unless you could prove it was terrible working conditions. You also have to demonstrate that you’re continuing to look for jobs, and will take a job if one is offered to you. I think it would be kind of hard for people to keep meeting that criteria.”

A ‘Now Hiring’ flag outside a business complex in Gray, TN

Campbell said another reason for the hiring shortage is employees not wanting to risk their health during a pandemic, especially for service industry jobs that require frequent in-person contact.

“You may have people who are just afraid of the virus,” said Campbell. “[Employers] can maybe coordinate helping them get vaccination. They can maybe provide more support for their employees, if that’s something they’re worried about,” he said.

Finally, Campbell said there aren’t enough trained workers to match the demand for skilled industries, such as construction.

“The people who are unemployed don’t necessarily have a skillset that immediately lends itself to the job vacancies that are open right now,” he said. “If that’s the case, [employers] can offer training, apprenticeships, pathways for people to gain the skills and knowledge they would need to be good fits… maybe you put that in your job posting. You know, ‘willing to train’, ‘willing to support learning on the job.'”

Employers might also pay workers higher wages, Campbell says, but there are limitations.

“Wages ultimately are based on the value that the employee brings to the business. If an employee is paid more than the value they bring, then it’s not going to be a sustainable situation for the business,” he said.

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