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March 27, 2023

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Pandemic labor shortage hits Clark County hospitality industry hard

By , Columbian Innovation Editor
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4 Photos
Mackenzie Samuelson, from left, of Beaches restaurant chats with customers Andrea Pelton and Maegan Davies while stopping by their table on Thursday morning, May 6, 2021.
Mackenzie Samuelson, from left, of Beaches restaurant chats with customers Andrea Pelton and Maegan Davies while stopping by their table on Thursday morning, May 6, 2021. (Amanda Cowan/The Columbian) Photo Gallery

Brian Rummer, co-owner of Barlow’s Public House on the Vancouver waterfront, can’t seem to find enough workers to fill open positions at his restaurant. Often when he gets responses and sets up interviews, the applicants stand him up.

“I get the feeling they’re not looking for work,” he said.

Businesses throughout Vancouver are reporting a labor shortage that’s reaching a crisis mode for restaurants and hotels. They can’t find workers to fill lower-wage positions.

While some are quick to blame the labor shortage on state unemployment insurance benefits, others say wages offered are too low or note that parents still need to stay home while kids are at home, remotely taking classes.

But consider another factor: It took up to six months for some unemployed Washingtonians to see a dime of unemployment insurance benefits. It was one of the most challenging times in their lives.

So why would they return to work when the county could roll back in phases any day, they could be laid off again and they might have to go through the unemployment process once more?

Why the ‘Fake’ applications?

So why are there so many “fake” job applications? On unemployment insurance weekly claims forms, the job-search requirements are currently suspended until the Pandemic State of Emergency is lifted. People may answer “no” to the job-search questions on their weekly claims. However, there’s suspicion in the restaurant industry that people may not be aware of that and apply for jobs anyway.

‘The new normal’

“Everyone wants to blame it on one thing,” said Anthony Anton, president and CEO of the Washington Hospitality Association. In truth, Anton said, a combination of issues is driving the labor shortage, including the fact that career restaurant workers have left the industry because it’s too uncertain.

At Barlow’s, Rummer said he’s seen many career-long restaurant workers retire or leave the industry in search of calmer waters.

“For our industry, after the last shutdown, people moved on because they don’t trust the industry,” Rummer said. “They needed a more stable job. A lot of good people left that way.”

At the Hilton Vancouver Washington, general manager Mike McLeod had nine open positions last week. He said that either hotels have a small amount of business and don’t need the workers to return or, like at his hotel, customers are returning but staffers are not.

“Staffing struggles in our industry is the new normal,” McLeod said. “I think that’s something we’ll struggle with for the next year.”

Pressure on wages

If history is an indicator of how post-pandemic economies affect wages, a smaller supply of people to fill a large demand for workers gives applicants more bargaining power. That means wages are likely increasing in positions that were left open during the pandemic, according to a research paper published last year by the Federal Reserve Bank of San Francisco.

In Clark County, unemployment benefits vary based on what recipients were paid at their last job, with benefits ranging from $201 to $844 a week. In contrast, Washington’s minimum wage is $13.69 an hour, which adds up to about $547.60 a week before tax on a 40-hour workweek.

Many of the service industry jobs that aren’t being filled in Vancouver’s restaurants pay above minimum wage, in the $15- to $19-an-hour range. And most include tips.

Scott Bailey, regional economist for Southwest Washington, said no one is making more money with unemployment insurance — even with an additional $300 in federal benefits — than they would be if they were working.

“The average unemployment insurance is 12.7 percent below median wage” for Clark County, he said.

Not just hospitality

It’s not just restaurants and hotels. The labor shortage is affecting industries across the board.

Eric Sawyer from Vancouver consulting firm BBSI said the retail sector is also seeing a labor shortage. It’s mostly low-wage, in-person jobs that aren’t being filled, he said, and most businesses are seeing it.

“I think most owners are feeling the same pinch when it comes to attracting new talent or getting back some workers they’ve had in the past,” he said.

Transportation businesses, especially trucking companies, are apparently in dire straits when it comes to filling positions, John McDonagh, president of the Vancouver Chamber of Commerce, said in an email to The Columbian. “Also, entry-level positions are difficult to fill.”

The state’s Employment Security Department isn’t acting fast on the labor shortage, and a spokesperson for the department did not answer a question from The Columbian as to what the state is doing to address the labor shortage.

“The Employment Security Department implements unemployment insurance and re-employment services based on federal and state law,” wrote Nick Demerice, spokesman for the Washington State Employment Security Department. “We work closely with our local workforce boards to determine labor needs of those regions and provide resources where appropriate.”

Regardless, Anton, of the Washington Hospitality Association, said the state has always been a good partner in helping with labor shortages, and he expects the state to take action soon.

“I think ESD in the past has really been a good partner to bridge the gap to get people back to work,” he said. “As much as we’ve had issues getting people back, the state has helped with the SharedWork program, hiring fairs and working incentives. My guess is there will be more.”

Other states

The labor problem extends far beyond Clark County. Austin, Texas, might show the Portland metro area what’s in store even after the state lifts all dining restrictions. Texas Gov. Greg Abbott dropped the state’s pandemic restrictions on March 10, and even now, restaurants in Austin are in a deep in a labor crisis, even without the fear of the state shutting down indoor dining again.

But Austin is still dealing with all the other problems factoring into the labor shortage here: unemployment assistance providing an incentive for workers not to return to work, instability in the industry, and wages that don’t grow at the same rate as rent.

Some states are taking a more blunt approach to the labor shortage. At the beginning of May, Montana Gov. Greg Gianforte announced the end of the state’s participation in the federal unemployment program, a $300 weekly benefit.

“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers,” Gianforte said in a statement. “Nearly every sector in our economy faces a labor shortage.”

Difficult choices

The problem with that, according to U.S. Labor Secretary Marty Walsh, is that the most vulnerable people needing the money will be forced into a difficult spot.

“Choosing to eliminate these critical benefits will have the greatest impact on the most vulnerable,” Department of Labor spokesman Michael Trupo told the Associated Press, adding that workers who are at a higher risk from contracting COVID-19 or who live with a vulnerable family member must now “make an impossible choice” between their health and their economic security.

Workers of color have been more affected by the wage factor and the health threats of COVID-19, Bailey said, and they are least likely to be vaccinated. Also, parents of any race have been impacted because of day care and school.

“There’s some big factors that have nothing to do with the unemployment insurance amount,” he said of the labor shortage.

One way restaurants have adapted is through technology. From QR codes to online ordering to online reservations to scheduling shifts using software, restaurant owners have embraced technology that can replace some of the duties of workers.

As restaurants wait for the job market to stabilize, Brian Rummer, owner of Barlow’s, wanted to remind diners in Clark County that a little grace goes a long way.

“All restaurants are understaffed,” he said. “Be as nice and accommodating as you can. We’re trying our hardest.”