Small businesses are having trouble filling job openings, so some wages are rising
Share Now on:
As the economy opens back up, one way that businesses have been trying to meet the surge in pent-up demand is by hiring more employees. But that’s not easy: A survey out this week from the National Federation of Independent Business found that 42% of small business owners say they’ve recently had trouble filling open positions. That’s a record high.
For the past few months, the hiring situation at the Schlow Restaurant Group has been in crisis mode.
“There is a complete lack of applicants for jobs that we have open, and have had open, for a considerable amount of time,” CEO Spiro Pappadopoulos said. Pappadopoulos said the company is trying to hire around eight to 10 people for each of its 11 restaurants just to handle the current workload.
But he said a lot of people the company has been in touch with have said they’re reluctant to come back to work. “And when we were faced with nobody wanting to come back to their job, we realized we had to do something to get more competitive,” he said.
So the company’s been raising pay by around $5 an hour for entry level jobs. It’s also offering more benefits, flexible schedules and signing bonuses.
The NFIB found that around 30% of businesses say they’re offering higher wages, “Simply because the labor market’s getting tighter, and there are more and more job openings that we’re trying to fill,” NFIB chief economist Bill Dunkelberg said.
Dunkelberg said businesses have to compete with the amount of money people are receiving in unemployment benefits. “And, of course, they’re competing with each other for the people who are qualified.”
And even if a business owner believes the economy’s going to get better this year, many of them can’t afford to compete.
“We believe it’s going to be great, but it’s hard to make financial commitments under the belief things are going to be great,” said Ken Giddon, who runs a men’s clothing store called Rothmans in New York.
Giddon has been struggling to find workers, but offering them higher wages seems risky. Especially, he said, because his industry might not rebound with the rest of the economy. “So I’m in a business where I sell something people don’t really need. Men’s clothing — men can wear the same clothes for five years and not care that much about it.”
Giddon has been trying to fill three or four open positions. So far, he’s only been able to fill two.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Give today and get our limited edition tote.