Help wanted but hard to find

Sounds of chatter and clanging plates fill Mariscos Puerto Nuevo, a Mexican restaurant in Seaside, Calif., where waitresses serve up plates of burritos and tostadas smothered in cheese to a lunchtime crowd. It’s a contrast from two months ago, when government COVID-19 restrictions barred indoor seating in restaurants in much of the state, including Seaside, a coastal city in Northern California.

But even as the customers have returned, the restaurant staffers have not. Antonia Garcia, the owner of Mariscos, has had a “help wanted” sign hung in the front window for more than a month now. She’s also taken out local newspaper ads as most of her employees are older. The restaurant, which has openings for a full-time table busser and a waitress, would pay minimum wage—$13 an hour—plus tips.

Even though California had an 8.3 percent unemployment rate in March, Garcia hasn’t had anyone agree to fill these positions. She believes many potential employees are still worried about being exposed to COVID-19 at a restaurant. Meanwhile, existing employees must work overtime, which costs extra in wages.

“Help wanted” signs adorn quite a few storefronts across the country. As COVID-19 restrictions ease and the economy recovers, businesses are trying to fill vacant positions. For many, that hasn’t been easy.

Job openings rose nearly 8 percent to a record-breaking 8.1 million in March, according to a Labor Department report released in May. Yet overall hiring rose only 4 percent, revealing a yawning gap between the number of jobs available and the number of people willing to return to work. An April survey by the National Federation of Independent Business found 44 percent of small businesses had job openings they couldn’t fill.

Analysts point to different factors behind this conundrum. Sean Higgins, a research fellow at the Competitive Enterprise Institute, said some people aren’t returning to the workforce due to ongoing COVID-19 health concerns. Another reason is that with schools closed, some parents can’t go back to work because they need to stay home to take care of their kids.

A big factor keeping people home may be the lack of incentive as they continue to receive enhanced unemployment benefits, said Rachel Greszler, a labor policy analyst at the Heritage Foundation. Under the Trump administration’s CARES Act, the federal government added $600 a week to state unemployment benefit checks, later cutting that amount down to $300. President Joe Biden’s March stimulus package extended those benefits through September. By then, a worker could have been on supplemental unemployment benefits for up to a year and a half.

Some economists estimate up to 42 percent of unemployed workers are making more by staying home than they did at their previous jobs. “We might not see that unemployment rate fall as quickly as it otherwise could, unless those benefits are pared back,” Greszler said.

That’s an issue that Rafik Ebelian, the owner and manager of a Cold Stone Creamery franchise in Santa Cruz, Calif., is facing. At this time of year, he’d typically have 12 employees in preparation for the summer tourism crowds. Right now, he has seven.

Ebelian has found the increased unemployment benefits are making it more difficult to attract lower-wage workers right now. “Why would they want to come out and work anymore?” he said. “Staying home pays better.”

But some economists say businesses like Ebelian’s need to offer more competitive wages to attract the workers they need. The pandemic has changed jobs, especially those in the service sectors, by making them inherently more stressful, said Heidi Shierholz at the Economic Policy Institute. That also makes them worthy of higher pay, she argued.

Yet Higgins believes raising wages isn’t easy for a small business to do after a year of restrictions. Plus, businesses tend to pass that increased cost on to consumers—or cut back services.

In the meantime, Garcia and Ebelian said they’ll just have to make do with the staff they have. “When I don’t have enough people, the workload gets tougher,” Ebelian said. “So my goal is to hire as soon as possible, just to relieve that tension.”