Restaurateur John Bean is a few workers short. Check that. He’s about a few hundred workers short.
“We’re short-staffed and actively looking,” said Bean, whose Eat With Us group operates 14 restaurants in the state, including seven in the Golden Triangle. “We’re doing things we’ve never done before. We’re doing advertising for workers on TV and trying to get in touch with employees who worked with us before. We just can’t find them.”
Bean is not alone.
“I’ve never seen anything like it, nothing really close to it,” said Mark Smith of Columbus, president of The CPI Group, a regional employment agency that has been recruiting workers for area companies since 1994. “We’re all scratching our heads.”
The story is much the same throughout the state, which was one of the first to roll back COVID-19 restrictions on business operations, especially in the service industry.
Put simply: Businesses are ready to get back to work. Workers, not so much.
On March 3, Gov. Tate Reeves issued Executive Order No. 1549, which ended mask mandates and capacity restrictions at businesses statewide. On Friday, Reeves issued another executive order rescinding all other restrictions, including limits on attendance at outdoor events and K-12 events, including graduation ceremonies.
While many states are still observing restrictions, Mississippi is open for business.
“We’re in an economy that’s ready to take off,” Smith said. “But if businesses can’t find the employees they need, the opportunity is wasted.”
Another Columbus businessman, who agreed to speak anonymously because he didn’t want his comments to hurt his business, said it should be no mystery why there are far more jobs than job seekers.
“I can tell you what’s going on,” he said. “When you are trying to hire people, normally you are competing with other business owners and it’s sort of an apple-to-apple deal. But now, it’s not the guy next door you’re competing with. It’s the federal government.
“We don’t have a chance, not with what’s going on right now,” he added. “The government has made it better to stay at home and draw money from the government than go to work. And it’s not just minimum-wage jobs, either. You look around: There are people with good-paying jobs, and they can’t fill them.”
Doing the math
Smith said the primary cause for the worker shortage he has seen during the past year is the unintended consequences of the federal government’s efforts to create a safety net for the millions of Americans who lost their jobs during the pandemic, when employers were forced to close or scale back operations.
Among those measures were federally-supplemented unemployment benefits. Beginning in March 2020 with the Federal Pandemic Unemployment Compensation program (FPUC), unemployed workers were provided an additional $600 in weekly unemployment benefits beyond what the states provided — which in Mississippi ranges from $215 to $235. In December 2020, the FPUC was amended to reduce the federal unemployment subsidy to $300 per week. As part of the American Rescue Plan announced in March, the $300 per week supplements were extended through Sept. 6.
Do the math, Smith said, and it’s pretty clear why employers are finding it difficult to find workers.
While the enhanced unemployment benefits — along with three rounds of stimulus checks that combined to provide a few thousand extra dollars in direct payments to the average individual — did put money back into the economy at a time when the country was reeling, it also led to the problems he sees today.
“It turned out to be a double-edged sword,” Smith said. “The truth is, a great deal of the workforce doesn’t have to work. There are a lot of decent jobs out there at $13 per hour, but let’s say we’re talking about a $10 per hour job. That person would make $400 a week, and after withholding it’s probably a take-home pay of $350. Now look at what you get if you don’t work. What would you rather do, make $525 staying at home or working a job and bringing home $350?”
Lowndes County Sheriff Eddie Hawkins touched on that issue last week during an appearance at the Columbus Rotary Club. He said staffing is his top priority right now, especially at the county jail.
“It’s always tough hiring corrections officers when you can go across the state line to Aliceville (a federal prison) and make up to $50,000,” Hawkins said. “But now, it’s even harder. We start our corrections officers at $13.42 per hour. They can make more than that staying home and drawing unemployment.”
The math illustrates Hawkins’ point. An entry-level corrections officer in Lowndes County would gross $536.80 before withholdings, compared to someone drawing the maximum $535 per week, none of which is subject to taxes or other deductions.
Smith said it’s not just the lower-paying jobs that are hard to fill. Looking at a typical daily report, he noted unfilled job openings for a structural steel hanger at $17 to $20 per hour, a heavy-equipment operator at $15.75 to $25 per hour and several other positions with pay rates ranging for $10 to $15 per hour.
“In addition to the unemployment benefits, taxable income was reduced (and tax refunds) we are seeing now are higher,” he said. “Then you have the stimulus (direct payments) on top of that. People are choosing the stay at home. I understand it, but I don’t agree with it. People need to work and not rely on the government to support them.”
Companies try to adjust to challenges
In the meantime, Smith has explored new strategies, including maximizing exposure through social media and advising his clients to offer signing bonuses and higher wages.
“That only goes so far, though,’’ he said. “You have to be careful that you don’t disrupt your pay scale for existing employees because they’re going to know what people are going to be paid.”
Bean, who said his pre-pandemic workforce stood at 1,011, said it shrank to 500 employees when the pandemic was at its worst. Since then, he’s managed to add roughly 200 employees and would hire another 300 if he could find them.
“The customers have returned, but we don’t have the number of workers we really need,” he said.
That’s made for some tough decisions, including more overtime, scaling back hours, closing sections of restaurants, and even longer waits for food to be delivered to tables.
“You really don’t have too many options,” Bean said.
Other businesses, especially more seasonal ones, are managing to work through the worker shortage.
“We don’t see people coming in and applying for jobs anymore, but aside from that it hasn’t been much different for us,” said Cliff Crawley, owner of Four Seasons Lawn and Landscape in Starkville. “Most of our guys have been around a pretty long time, and because we do a lot of different services we can keep them on year-round. So we’re not out there looking for workers very often.”
He also has another source of workers who are not eligible for the federal benefits.
“The summer months are our busiest time of year, so we do add part-time people, but most of them are college kids,” Crawley said. “We’ve hired students during the summer for years and it has worked out really well for us.”
An economy ‘in transition’
Corey Miller, an economist for the Mississippi Institutions of Higher Learning, said there are other factors that may be keeping people out of the job market.
“I don’t think you can point to any one factor,” Miller said. “The federal subsidies are certainly playing a role in this, but there are also people who either still have concerns about the virus and safety and people who may have more responsibilities at home, especially with kids not being in the classroom, or with older family members.”
The good news, Miller said, is he believes the job market will right itself over time.
“I think what we are seeing right now in so much of the economy is that we’re an economy in transition,” he said. “I don’t see any forecasts that show this being a long-term situation.”
Smith is more skeptical.
“(The government) has extended enhanced benefits two times already,” he said. “I can’t see any reason to believe that when Sept. 6 comes, it won’t be extended again.”