With increased vaccination rates, relaxed COVID-19 restrictions and increased government stimulus, businesses are looking to return to pre-pandemic levels of production. There’s just one small problem: some businesses can’t seem to find employees.
Jack Edelstein, owner of Apothecare Ann Arbor, an organic cannabis cultivation facility, said that overall his business has run pretty smoothly during the pandemic but found that COVID-19 made it difficult to secure a steady staff.
“We’ve been in business for under two years, so we’re still in that startup phase, and there’s always challenges,” Edelstein said. “The most challenging one has been assembling a stable team of employees … and I guess COVID did play a role here, because it made some potential employees just unavailable for various reasons.”
As more businesses began to lessen their restrictions in April, U.S. employment in leisure and hospitality had increased by 331,000, half of which consisted of jobs relating to food service.
Incoming LSA freshman Sarah Ashby who currently works in food service experiences significant understaffing at her workplace. Ashby said she noticed a lack of productivity and staff morale as a result.
“(Employees) aren’t the nicest but you can’t fire them (because of short staff),” Ashby said. “I know it gets stressful – they work long hours (so) they just have bad attitudes.”
Ashby said that people may also be hesitant to get jobs right now because of potential exposure to COVID-19.
“There’s just a lot of uncertainty right now and some people aren’t sure if they want to work right now,” Ashby said.
Rising LSA sophomore Sara Ojala, who also currently works in food service, said she felt that the national staff shortage was the result of a mixture of a few different factors. As a student who has experienced Zoom fatigue this year, Ojala said that it’s not very motivating right now for someone to get a full-time job in the summer.
“I think that a lot of people have gotten very comfortable during the past year and a half doing things from home,” Ojala said. “(People) are more accustomed to staying home in their own bubble as opposed to putting themselves out there again.”
Ojala said another reason could be that staff shortages can create an immediate stressor for new employees.
“I actually think that, ironically, it is a deterrent that businesses are short-staffed,” Ojala said. “ I know that if I were a prospective employee, I would be pretty hesitant to jump into a job that is stressful on others and would be stressful on me.”
Business professor Jeffrey Sanchez-Burks said people have had a year-long reflection on the employment conditions that existed since before the pandemic. He said wage level plays a partial role in the staff shortage, which is why some organizations began increasing wages.
“After people have done a lot of reflection on the meaning of life, what they’re doing in their career and the bills they have to pay and so forth, to work for such (a small) amount is very hard to swallow,” Sanchez-Burks said.
According to the Bureau of Labor Statistics, the labor force participation rate, or the labor force as a percentage of the eligible population, is down nearly 2% from what it was in February 2020. It has remained relatively steady at around 61% since last June. However, the number of job vacancies rose to nearly 15 million in March 2021, compared to just 10 million before the pandemic in March 2020.
Sanchez-Burks also discussed how business models are having to be reconsidered for the future in order to encourage people to apply for jobs. He said research has shown that a demotivating workplace, along with low pay, can have notable impacts on staff shortages.
“I think this notion of ‘pay more’ may help a lot of organizations get people in the door to apply, but it won’t keep them there,” Sanchez-Burks said. “Each dollar doesn’t increasingly become more and more motivating – you get used to it. In some ways, what people need in addition to the compensation that they feel meets their minimum requirements are meaning and purpose.”
Sanchez-Burks said organizations have to consider how to foster better connections between their employees. Businesses, Sanchez-Burks said, should try and create a competitive advantage by cultivating a work environment that is actually desirable for employees.
“People have a really renewed appreciation for how much connection (there is) with others,” Sanchez-Burks said. “It would be very short-sighted for organizations only to think about, ‘How do I get people to put in an application?’”
Economics professor Jim Adams said the three factors of staff shortage can be traced to the direct cost of going to work, the risk associated with the work and alternative sources of income. He said circumstances such as the need for childcare and transportation services, the risk of exposure to COVID-19 in the workplace and unemployment benefits can influence people’s willingness to work.
“All of those (factors) are going to affect the supply side of the labor market, that is the degree to which people are willing to work at a given wage,” Adams said. “On the demand side … a lot (of) people are trying to hire, and that makes it difficult to find workers.”
Since the 1970s, increases in wages have been slow. In Michigan, the minimum wage is $9.65, but states like Idaho, Iowa and New Hampshire have minimum wages at $7.25. A national $15 minimum wage was originally part of the $1.9 trillion COVID-19 relief bill passed by Congress in February, but was ultimately removed due to the Senate Parliamentarian ruling that it violated the rules of budget reconciliation.
Adams emphasized that shortage does not come out of thin air. The workers are there, but the suitable conditions of employment are not.
“Shortage is a concept that defines itself only at a given price,” Adams said. “And so, if people are complaining that there is a shortage of workers, maybe that’s really a sign that the wage that people are paying is not high enough.”
Daily Staff Reporter Nirali Patel can be reached at nirpat@umich.edu