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Less ‘ghosting,’ more hiring. Did the end of federal pandemic jobless benefits ‘solve’ Northwest’s labor crunch?

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Christopher Smith is a stage hand working on setting up a show at the Paramount Theater in Seattle on Friday, Oct. 1, 2021. He is back to work as the pandemic lifts -- but the end of benefits isn't what made that happen.
Christopher Smith is a stage hand working on setting up a show at the Paramount Theater in Seattle on Friday, Oct. 1, 2021. He is back to work as the pandemic lifts -- but the end of benefits isn't what made that happen. (Bettina Hansen/The Seattle Times/TNS) Photo Gallery

After months of short-staffing, unanswered job listings and ghosted interviews, some Seattle-area employers say they’re seeing more job seekers since the extra $300-a-week in federal pandemic jobless benefits ended Sept. 4.

“My carpentry staff doubled this week,” says Carl Haglund, a Seattle developer who struggled to find carpenters for much of the pandemic, but was able to rehire three of his best workers in mid-September.

It’s a similar story at Taco Time Northwest, which owns 56 locations, mostly in Western Washington: Hiring jumped from around 70 positions filled in August to 105 in September, says hiring manager Alisha Ramirez.

“We’re hiring, like, daily now,” adds Lynette Ladenburg, CEO of Martha and Mary, a senior living and child care nonprofit in Poulsbo that was able to fill only five positions in June, but 22 in September.

Did the end of the federal pandemic benefits “solve” the region’s labor crunch? Many economists, business leaders and employers — including Haglund, Ramirez and Ladenburg — say it’s not that simple.

While some employers have argued that the extra benefits discouraged jobless workers from going back to work, COVID-related challenges like remote schooling, child care closures and fear of workplace infection also “kept workers on the sidelines,” says Paul Turek, state economist with Washington’s Employment Security Department.

Just how many workers have returned since benefits were cut off won’t be clear until statewide hiring data for September is posted later this month. But as of August, the Seattle area was still roughly 66,000 jobs down from two years earlier — and many experts think the recent surge in hiring will only close a fraction of that gap.

(The national jobs report last Friday showed hiring was sharply lower than in prior months this year, while the unemployment rate dropped to 4.8%, partly attributed to more women dropping out of the workforce.)

In the meantime, the pandemic benefits ended before some hard-hit sectors, such as hospitality, tourism and live performance, fully recovered, which left many jobless Washingtonians in the lurch.

Christopher Smith, a veteran stagehand, says he has landed a few gigs at live venues recently. But that’s because Seattle-area venues are finally reopening and Smith, 50, has lots of union seniority, not because his pandemic benefits ended, he says. “For those of us whose work just is not back, well, it’s not like it’s gonna matter,” he says.

Pandemic benefits by the numbers

Debate over pandemic benefits and labor shortages has focused mainly on the second big COVID-19 relief package, known as the American Rescue Plan Act, enacted in March under the Biden administration.

ARPA gave benefits to jobless workers who ordinarily didn’t qualify for regular state unemployment, such as contractors and part-timers. It extended benefits to workers whose 26 weeks of regular state unemployment had run out. And it paid an extra $300 a week to anyone already receiving state or federal jobless benefits.

ARPA’s impacts were significant. In a normal year, only 25% to 30% of unemployed Washingtonians collect benefits, due to ineligibility and other factors, according to state and federal data. During the pandemic, that soared to 91% and was still at 51% in early 2021.

Weekly income also jumped. In Washington, the average weekly benefit went from around $490, or roughly 46% of the average claimant’s lost wages, to $675, or 63%, according to U.S. Department of Labor and ESD data.

Workers in lower-wage jobs, which often were especially hard-hit in pandemic layoffs, did even better, percentagewise. According to ESD data, a claimant laid off from a $20-an-hour job received benefits equivalent to 72% of lost wages. Claimants earning $16.69 (Seattle’s current minimum) or $13.69 (the state minimum) got 77% and 83%, respectively, in benefits.

Several Seattle-area employers say those benefits made it harder to attract entry-level employees. “We had to look at that,” says Martha and Mary’s Ladenburg, adding that “beginning” positions paying less than $20 an hour “were the ones that we couldn’t fill.”

The cutoff of ARPA benefits after Sept. 4 was painful for the more than 120,000 Washingtonians who had been receiving only pandemic benefits and who saw their weekly payment go to zero. Washingtonians who still qualified for regular state unemployment benefits saw their average weekly payments fall from $676 to $495, according to ESD data.

Around that time, some employers say that they began seeing more applicants for positions that had been hard to fill for months.

“I didn’t have any ads out and people were coming in and asking … if I was hiring,” says Jeremy Walcott, general manager of the beer hall Rhein Haus Seattle, about the weeks after the benefits ended.

And unlike earlier in the year, some employers say they’re seeing fewer “ghost” applicants — that is, people who apply but don’t respond when contacted or don’t show up for interviews. Employers say ghosting had increased after July 7, when Washington reinstated the requirement, suspended last year, that claimants search for work each week.

“I’d have, like, eight scheduled and only two would show,” says Taco Time’s Ramirez.

Was it the end of benefits — or something else?

Still, just how much of this shift in hiring patterns can be linked to the benefit cutoff is difficult to assess, economists and business leaders say.

Data from states that cut pandemic benefits months before Sept. 4 is mixed. According to a widely cited August study of hiring in 19 “early withdrawal” states, after all benefits ended, the percentage of jobless workers who found employment increased, primarily in June and July, from around 1 in 5 to around 1 in 4.

But “that’s still a lot of people — the vast majority — not zipping straight back into the workforce,” says Jacob Vigdor, an economist with the University of Washington Evans School of Public Policy who has studied the Seattle-area labor market.

In Washington, the picture is further clouded by the fact the benefits cutoff wasn’t the only thing that might have spurred hiring.

In early September, many public school districts began in-person instruction, which may have made it easier for unemployed workers with school-age kids to return to work. Many colleges are holding in-person classes this fall, which could mean an influx of students seeking part-time jobs. Vaccine mandates and rising vaccination rates may have helped some workers feel more comfortable returning to front-line jobs.

Meanwhile, employers have been lifting wages and other incentives. Some warehouse operators are offering signing bonuses of $2,000 to $3,000. Many fast-food chains have raised their starting wages — to $19 at Dick’s Drive-In and $20 at some Taco Time locations.

Employers have also accelerated the hiring process so that candidates receive job offers within hours of applying, before they have a chance to talk with rival employers. “We try to get them on the hook as soon as possible,” says Ramirez at Taco Time.

Anthony Anton, CEO of the Washington Hospitality Association, doesn’t doubt that the benefits cutoff spurred some hiring: He estimates it accounts for perhaps 20% of hiring his members have seen recently. But much of the rest of that surge, he adds, likely reflects the less controversial fact that employers “just flat out got really competitive and got really aggressive in hiring.”

Disentangling all those factors isn’t easy, Vigdor says. “It’s reasonable to conclude that cutting off the more generous benefits did make some difference” in hiring, he adds. “But the main question is, what’s the magnitude of that difference?”

Winter of our discontent?

That uncertainty also makes it hard to predict whether the cutoff, or other factors, will have a sustained impact on hiring in the Seattle area.

There are plenty of reasons to think the recent hiring surge won’t last, employers, industry leaders and various experts say.

The most obvious reason is the pandemic. New variants and higher case counts could bring yet another surge of layoffs and further slow the recovery of still-struggling sectors such as food service, tourism and live performance.

Other factors will likely drag on hiring long after COVID has passed.

One is the cost of housing in expensive markets like Seattle, which often forced lower-wage workers into long commutes before the pandemic — commutes they may no longer be willing to endure.

Employers in downtown Seattle, for example, may be desperate for entry-level workers as downtown revives, but “does that entry-level worker want to commute on a bus … when they can find that same job and same wage right in their geographic area?” asks John Glynn, director of business relations and workforce solutions with WorkSource Seattle-King County.

Another potential drag on hiring: Some workers say the pandemic has taught them to get by on less, and they say they’re feeling less urgency to return to their old jobs.

Many of the applicants Walcott is getting now only want to work “a few shifts a week,” which makes staffing even harder, he says.

Smith, the stagehand, says he spent the pandemic in Eastern Washington, where rent was about half of what he was paying in Seattle, and though he’s back in Seattle, he “won’t work nearly the hours” he used to. “We’ve had a year and a half to figure out new ways of living,” Smith adds. “And we’re not going to go back.”

For some employers, that all adds up to a labor shortage that may ease up this fall, but isn’t going away. Anton, with the hospitality association, thinks the September hiring bump, welcome though it was, may end up being an anomaly. “After that, we probably have the workforce we’re going to have for a while,” he says of the restaurant sector. “I don’t see any other changes coming.”

That’s likely to be advantageous for workers still holding out for higher wages or jobs with shorter commutes. It also means uncertainty for many employers, who are likely to face even more competition for the applicants they manage to find.

As Ramirez puts it, when it comes to hiring, “nothing’s ever set in stone until they show up on that first day.”

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