Despite record numbers of Utahns filing for jobless benefits every week, some businesses are having big trouble finding workers to fill open positions.
Vernon Hanssen, CEO and co-owner of Gourmandise, a Salt Lake City-based gourmet bakery and cafe, said finding candidates to hire in the food and restaurant industry has been especially challenging of late.
“We have been trying to hire at all locations for months. Every restaurant owner I know is trying to hire,” he said. “We have few to no applicants, and many don’t even show up for in- person, Zoom or open interview slots. We are spending hundreds of dollars a month posting on different job boards. Every other restaurant owner I know is in the same position.”
That inability to hire more people is putting added pressure on the staff to provide adequate service to customers, which will increase as pandemic-related restrictions are eased in the coming weeks.
Hanssen blames the extension of state unemployment benefits and the federal weekly bonus combined with the strong economy for being the reason behind “creating the most difficult labor market I have seen in the 15 years we have owned Gourmandise.”
“Every restaurant is hiring, but no one is applying,” he said. “I want to open a new location and hire about 50 people, but at this rate, I don’t know if there are enough people in this state who want to work to be able to staff a restaurant. I literally can’t open my patio downtown because I don’t have enough servers and few are even applying.”
With the passing of the American Rescue Plan Act of 2021, a $300 weekly benefit is still available to those claiming jobless benefits through Sept. 4, said Kevin Burt, director of the Utah Division of Unemployment Insurance. But that temporary amount should not preclude individuals from seeking permanent employment.
“It is important to remind employers that if individuals refuse suitable work they can and should report that refusal,” Burt said.
As for the issue of not having enough people to fill the open jobs, analysts believe it’s a problem that some sectors will face as food service businesses move to operating at full capacity post-pandemic.
“Going forward, that’s going to be one of the struggles — there’s just not enough people to meet this demand of this very high growing area,” said Zions Bank vice president and senior economist Robert Spendlove. “What’s really interesting in Utah specifically is our labor force participation is back to its pre-pandemic levels. So we have essentially not only returned back to that low level of unemployment, but we’ve pulled people back off the sidelines and into the labor force back to where we were before. The only issue that we still have to resolve is that high level of people claiming unemployment insurance benefits and those specific sectors of the economy that continue to struggle.”
He noted that for people who have been displaced from their jobs for an extended period — more than six months — due to the pandemic, it becomes really difficult to reconnect to what they were doing before.
“People lose those connections, they lose the skills, sometimes the business closes down entirely. And so they’ve kind of moved on,” he said. “So some of these former restaurant workers may now be working in construction or they may be working for Amazon. They have kind of moved on to a totally different area, so it will be difficult especially with such a tight labor market for some of those businesses that have suffered the most to get back to where they were before.”
Another economic analyst said an additional consideration for potential job candidates could be the possible health risks involved in a high-exposure industry such as restaurants.
“Part of the factoring, too, is maybe, ‘I do need a job but the only job I can go get is one that’s going to put me in COVID contact with people and I’m just not ready for it yet?’” said Utah Department of Workforce Services chief economist Mark Knold.
Regarding the state’s low jobless rate and historically high unemployment claims, he said there are a few factors at play that are creating a seemingly incongruous economic situation within the Utah job market.
“(Let’s) use an analogy of a room. You have the room that’s full of chairs and those chairs are jobs, then they take some of the chairs away and the people then have to stand up in the room and look around for another chair,” he said. “Everybody in the room is still counted as being in the labor force, but then you have people who have been in the room for so long or long enough and there’s no chairs, they give up and they leave the room. That’s what’s happening with unemployment (currently).
“When they leave the room, they’re not counted in the statistics anymore. That’s what is basically going on in this environment,” he added. “Most of the time your unemployment rate comes down for a positive reason, that is people who no longer are employed go get a job. But it is possible during short periods and rough periods of time where the unemployment rate can fall for a negative reason — just people leaving the labor force.”