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As small businesses recover from the pandemic, they face a new hurdle: finding workers

As small business owners try to recover and rebuild from the Covid pandemic, they face a new hurdle: the lack of workers.

A survey conducted in March by the National Federation of Independent Businesses found that 42% of owners had vacant positions that could not be filled, a record. Ninety-one percent of those who were hiring or attempting to hire reported few or no qualified candidates for the positions they were trying to fill.

This becomes a huge obstacle to growth for many small businesses, said Holly Wade, executive director of the NFIB Research Center.

“They have come to this point and they have adjusted their business operations to weather the worst of the pandemic and now they are grappling with the inability to scale up their business operations when they find opportunities,” she said. declared.

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The reasons vary: Potential workers may not be vaccinated, and some working parents continue to face a lack of in-person child care or schooling for their children. Catering workers may be reluctant to return to the front line and risk contracting Covid-19.

Others may have left the area or found a new way to make money. Then there’s the additional $ 300 weekly unemployment insurance, which can also prevent people from taking jobs, the owners said.

These explanations are among those Matt Glassman, co-owner of Greyhound Bar & Grill in Los Angeles, heard from former employees who decided not to return when it reopened this week. Its two sites have been closed since last June, after Glassman and co-owner Steven Williams contracted Covid and decided it was not worth the risk to reopen until vaccines were readily available.

While Glassman wanted to keep as much of his original staff as possible, he understood why those who did not return made their decisions.

For example, since its locations are only open to about a third of capacity, due to social distancing rules, tipping workers like bartenders and waitresses will be affected. Bartenders earn between 75% and 80% of their salary in tips, he said.

“They are taking a massive pay cut at no fault of our own or theirs,” said Glassman, who took out loans from the Paycheck Protection Program and recently applied for help through the Restaurant Revitalization Fund. the Small Business Administration.

Hiring new workers has been the most frustrating, according to business owners.

“Finding new hires is a skill it wasn’t 16 months ago,” said Glassman, 39 and former bartender.

“We had an incredible number of people who scheduled an interview and didn’t show up,” he added. “We’ve never had this problem before.”

Certainly, small businesses still see a long recovery ahead. Confidence is slowly rising, now at 45 in the current quarter, from a record low of 43 in the first quarter, according to the Small Business Confidence Index in the latest CNBC | SurveyMonkey Small Business Survey.

I often suggest that every time someone says, “I can’t find the workers I need,” they should really add, “to the wages I want to pay”.
Heidi shierholz
senior economist and policy director at the Institute for Economic Policy

Hires are also expected to increase. Twenty-five percent of homeowners expect their workforce to increase in the next year, according to the survey. Jobs can be found on free websites, such as Indeed and local Craigslist ads. Restaurant workers can also visit CulinaryAgents.com.

Yet as business owners complain about the lack of available workers, Treasury Secretary Janet Yellen has privately warned against overreacting, according to the Washington Post, which cited two sources who spoke under cover of ‘anonymity. Yellen argued that more time and data is needed before assuming there is a problem in the economy, the newspaper reported.

Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, doesn’t think there is a widespread labor shortage. On the one hand, wages are not rising quickly, indicating a tight labor market and job growth is booming, she said in a recent editorial by the Initiative for Policy Dialogue. .

Regarding the $ 300 unemployment benefits that keep low-wage workers from working, she cites research papers that found an extremely limited effect that the $ 600 weekly benefits had last year in discouraging workers from working. workers.

Instead, the shortage of workers could be linked to employers not raising wages, she argued.

“Employers are posting their wages too low, cannot find workers to fill positions at this pay level and claim they face a labor shortage,” she wrote. says, ‘I can’t find the workers I need,’ she really should add, ‘to the wages I want to pay.’ “

Yet many small businesses argue that they can’t pay higher wages if they don’t make money. Already, 28% of small business owners said they increased their pay in March, according to the NFIB survey.

“If I could pay more for each person in this place to come back and feel safe, I would,” said Glassman, who just gave raises to his staff. Its bartenders and waiters, for example, earn $ 15 an hour before tips. He struggled to find a $ 17 an hour caretaker and a $ 16 an hour dishwasher.

“I would absolutely love to give everyone a massive raise to feel safer and more loved,” he added.

“At the moment, we don’t know where this money is coming from.”

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Disclosure: NBCUniversal and Comcast Ventures are investors in Tassels.

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