Facing Worker Shortage, Some Businesses Reduce Hours, Services; Others Offer Incentives

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The Detroit News
June 13, 2021
Alex Harring

Genevieve Vang left France for the United States three decades ago because there weren’t enough jobs. Now the owner of two restaurants in Metro Detroit is facing the flip side: she can’t find enough employees to staff her restaurants.

When pandemic protocols eased to allow 50% capacity dining, business tripled. But that newfound success has been tempered by a shortage of workers, a phenomenon that has forced her to close her Detroit location for weekday lunches and consider removing items from its menu.

“All of a sudden recently, business just skyrocketed every day, which is just wonderful,” said Vang, owner of Bangkok 96 in Dearborn and Bangkok 96 Street Food in Detroit. “But the problem is nobody wants to work.”

Worker shortages are leaving employers across Michigan and the nation in a lurch, particularly those looking to fill hourly jobs in such industries as retail, food service, and hospitality. Business leaders in Michigan say the shortages risk lessening the gains they hoped to recoup following the pandemic. And the shortages do not bode well for businesses looking to rebound as the state approaches an unfettered reopening next month.

The reasons: pandemic unemployment benefits have made it more lucrative for lower-paid workers to stay home instead of work and increase the risk of infection. Restaurant work with split shifts, low wages, and variable tips in closed spaces is less attractive. And then there are people like Justin Harris of Canton Township: He stopped working in November because of health concerns related to the pandemic and realized he did not want to return to his rigid work schedule.

“During the winter, I would never see the sun on workdays,” he said. “Throughout all this time, I discovered that I enjoy having my free time to do what I want when I want.”

According to the most recent data from the Michigan Department of Technology, Management & Budget, the state’s unemployment rate is relatively low. It fell to 4.9% in April, a far cry from 23.6% in April 2020. About 231,000 Michigan residents reported being unemployed that month.

May unemployment data showed more jobs opening up across the country with 559,000 non-farm payroll jobs added nationally, but at a slower rate than anticipated. The unemployment rate dropped to 5.8%.

Long-term unemployment — being unemployed for 27 weeks or more — comprised 40% of the total share of unemployed people in the United States, according to the Bureau of Labor Statistics. Long-term unemployment has not been this high since the Great Recession, said Patrick Anderson, CEO of the East Lansing-based Anderson Economic Group.

“You have the economy, in some cases, roaring back, where you have people buying so many cars out of lots now across the country that auto dealers having trouble keeping cars in stock,” he said.

“Housing prices are going up and people are remodeling, and building is going up so much that lumber prices have skyrocketed. It’s a serious problem to see high long-term unemployment when you have an economy this high.”

Uninterested workers?

Employers have tried incentivizing interviewing and accepting open roles to attract potential employees. McDonald’s said it was raising pay at company-owned restaurants last month as it aimed to hire 10,000 workers. JBS USA, which operates a meat plant in Plainwell, started giving free community college tuition to its workers and one of their children in March.

In Frankenmuth, the Bavarian Inn will give one of its famous chicken dinners to each of the first 50 interviewees at its job fair Monday. Amy Grossi, general manager of the Bavarian Inn’s restaurant, said she is hopeful the job fair will bring in enough workers to allow their shops and dining room to start running elongated summer hours.

“We’re hoping that if we can just get them in the door to apply, then we can talk to them about all of the great things about working at Bavarian Inn and Restaurant and Lodging,” she said. “In this day and age, we just try different things and see what works. And if it doesn’t work, we’ll try something new.”

Policy at the state level has encouraged the unemployed to look for work. Effective May 30, those filing for unemployment must submit at least one work search activity — which includes going to a job fair, applying for a job or completing an interview — with their certification for benefits. House members in Lansing also have floated “Return to Work” grants, which would give workers $1,000 one-time payments for getting off unemployment and taking jobs.

But the benefits and work search requirements have been met with growing apathy: a poll of unemployed Americans from the U.S. Chamber of Commerce found six out of 10 respondents are in no rush to rejoin the workforce. Three out of 10 of those surveyed do not plan to return to work in 2021 — and 13% do not plan to return at all.

One person in that 13% is Harris, the 30-year-old from Canton Township. He worked at a warehouse until he had to take his medical leave. Harris found his mental health and quality of life improved without being tied to 10-hour, four-day workweeks.

Harris does not plan to go back to the warehouse, opting instead to pursue gig work through companies like Grubhub that provide more flexibility than is available in a typical workday. Paid $16 per hour at the warehouse, the decision was less about differences in compensation, he said, and more about the benefit of being able to decide his schedule.

“It’s jobs that are low-paying that are having this shortage. They’re trying to pay them $12.50 an hour, and, honestly, I feel like my time is worth more than $12.50 an hour,” Harris said. “There’s a worker shortage, but it’s not for the jobs that are going to be able to pay you to live your life.”

Employers woo workers

The changing work landscape also poses hiring issues for Patti Eisenbraun, owner of Brown Iron Brewhouse, who found that businesses flourishing during the pandemic were pulling in workers from battered industries. While she adjusted her business hours or closed dining to align with public health mandates earlier in the pandemic, businesses focused on at-home services were booming.

These companies could go on hiring sprees while her breweries in Royal Oak and Washington Townshipfaced uncertainty, Eisenbraun said, causing her employees to leave for jobs that provided more stability during the pandemic. The hiring she has done while reopening has offset the workers she lost to other jobs.

“I don’t blame the workers for looking for a different avenue,” Eisenbraun said of the staff members who left, pointing to jobs at companies like the e-commerce giant Amazon.com Inc., which has thrived during the pandemic. “We all have bills to pay.”

Eisenbraun “completely revamped” her business plan amid the staff shortage, keeping her breweries closed on Mondays and only open for dinner Tuesday through Thursdays. This was done in an effort to prioritize the mental health of her 70-person staff, which she would like to see doubled in size for a complete reopening.

Changing restaurant hours and menu items are just two examples of how business managers and owners have had to recast their plans to make do while awaiting more manpower.

Nate Demers has stopped taking on new projects for WeatherWize, his Upper Peninsula-based log cabin construction business. At its current size, his team is booked for the rest of the calendar year and for half of next summer — but he would gladly take on more gigs if he had the staff.

Demers has tried promoting open roles on Facebook, job sites, and at the local high school. He was hoping to get resumes from a job fair for construction companies, but no one showed up. Higher pay, four-day workweeks, and on-the-job training were offered, but he has still had a hard time finding applicants.

At Camp Dearborn in Milford, which is run by the city of Dearborn, operations are running with half of the typical summer staff, according to Jason Spiller, the camp’s manager. Amenities like the food station, pool, and recreation field will be open, but their hours will likely be impacted by the staffing shortage, Spiller said. The camp pushed the start of tent rentals to mid-June.

Spiller said his staff typically prides itself on responding quickly to needs, but they may take longer to respond this summer with fewer staff members on call. Still, they are pressing on to provide the camp experience visitors know and love.

The city has been advertising openings earlier than prior years with the expectation of a shortage. It has been particularly tough staffing his landscaping team and the zipline because those workers have to be 18 or older and the majority of applicants have been high schoolers.

“Our biggest plan here at Camp Dearborn is for the normal customer — when they come here and camp,” Spiller said, “they don’t notice that much of a difference.”

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Related:

Letter: Chamber Proposes $400M Plan To Incentivize Workers To Reenter The Workforce Amid Increasing Demand

‘Back to Work’ Resources Help Michigan Businesses Find Talent to Fill Available Jobs


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