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COVID & Unemployment

Small businesses are having a hard time hiring, despite high unemployment

Justin Ho Oct 9, 2020
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A waitress folds silverware at a restaurant in Youngstown, Ohio, in September. Small businesses are having trouble hiring even though millions of Americans are out of work. Megan Jelinger/AFP via Getty Images
COVID & Unemployment

Small businesses are having a hard time hiring, despite high unemployment

Justin Ho Oct 9, 2020
Heard on:
A waitress folds silverware at a restaurant in Youngstown, Ohio, in September. Small businesses are having trouble hiring even though millions of Americans are out of work. Megan Jelinger/AFP via Getty Images
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You might think that in the middle of this pandemic economy, with millions of Americans out of work and the unemployment rate hovering around 8%, it’d be easy for businesses to find workers to hire right now. But a recent report from the National Federation of Independent Business found that over a third of small businesses have open positions they haven’t been able to fill.

About three weeks ago, Holly Dreeuws started looking to hire a few more workers for the pool construction company she runs in San Diego, California. She’s still looking.

“We cannot get somebody in to interview for the life of us,” she said. Dreeuws says she’s floored. “We get hits all the time, we call, we set up interviews and most of the time they don’t show.”

That usually doesn’t happen in a job market like this one.

“I can genuinely use this word — it’s unique. We’ve never seen this before. This is one of a kind,” said Nick Bunker, research director at the Indeed Hiring Lab.

Bunker said one unique factor is that many unemployed workers aren’t actually looking for new jobs. That’s because over a third of them are on temporary layoff, “which means they’ve been told they have a job to return to when the business can recall them,” he said.

As a result, the labor force is shrinking. Women have been dropping out of the workforce at high rates. Teresa Ghilarducci, professor of economics and policy analysis at The New School, said there’s another challenge for smaller companies: They often can’t afford to pay workers as much as larger businesses.

“They don’t have the same kinds of benefits that larger businesses do,” she said. “So you find that small businesses are plagued by a lot of turnover.”

Federal unemployment benefits have dried up, and the future of more government relief is unclear. Many big companies — including Disney, American Airlines and United Airlines — have announced new layoffs. Or that temporary layoffs they announced months ago are actually permanent.

“A lot of other businesses related to the travel industry are going to find that they can’t promise their laid-off workers that they’re going to come back any time soon,” Ghilarducci said.

As a result, she said, small businesses probably won’t have trouble finding workers in a few months.

COVID-19 Economy FAQs

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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