Businesses struggling to find workers
Many area businesses are having trouble finding employees, largely due to generous and extended unemployment compensation benefits that disincentivize work, some say.
“Practically every business you talk to can’t get people,” said Blair County Chamber of Commerce CEO Joe Hurd. “(Potential workers) are making more on unemployment.”
“Manufacturing, distribution, service and hospitality are all seeing the same thing,” said Steve McKnight, CEO of the Altoona Blair County Development Corp. “All across the board, there’s just nobody to hire.”
American Eagle Paper Mills in Tyrone was recently hoping to bring on 40 or 50 employees, creating a crew so the plant could accept additional work, said Phil Devorris, one of the owners.
Managers figured they could find those employees from among the 300 workers who “hit the streets” when the Appvion paper mill in Roaring Spring closed, Devorris said.
But American Eagle managed to hire only three, and has scrapped plans for additional work,
Devorris said. Potential candidates told his Human Resources Department they’d be “crazy” to pass up the current unique opportunity for a six-month “vacation” at government expense, Devorris said.
His mill was offering jobs at $12 an hour and up, and many workers with overtime are earning $40,000 to $50,000 a year, according to Devorris.
That wasn’t enough.
Blair Image Elements, another firm in which he has an ownership stake, is likewise having trouble getting the 30 or 40 additional employees it wants, Devorris said.
That company “has been in hiring mode since last summer,” he said. He said he’s never seen a more “challenging” market for hiring.
The difficulties have involved blue collar and field technician employment — but not white collar jobs, even white collar jobs that pay far less than the blue-collar positions, Devorris said.
Nor have the difficulties involved employee retention, he said.
Arby’s on Plank Road is flummoxed for lack of workers.
It’s looking for six or seven, said Assistant Manager John Rosepink.
That includes “everything: openers, closers, mid-shift (workers), managers, crew, cooks, food prep — everything,” Rosepink said.
There have been no applications in the past two weeks, he said. He’s never seen a situation like it, he said.
Management has reached out to former employees, but they haven’t responded, he said.
The restaurant began running short of workers about six months after the pandemic began, according to Rosepink. Positions have been hard to fill since then, he said.
Finelli’s Italian Villa
Frank Finelli, owner of Finelli’s Italian Villa, is having trouble finding dishwashers.
“I’m on craigslist as we speak,” Finelli said recently.
The problem is all with new hiring: He has retained all his pre-pandemic workers, he said.
“You still need a few new ones,” he said. “The problem is, nobody has to work,” because of the benefits, including the $300 federal add-on to regular unemployment, Finelli said.
His restaurant will be OK, with coverage at “key spots,” including servers and chef, he said. Yet dishwashers too, are critical, Finelli said, recalling a conference he attended where it was acknowledged that dishwashers may be the most critical part of any restaurant operation.
When it’s busy and his dishwasher walks out, guess who will be manning the machine? he asked rhetorically. “You’re talking to him,” Finelli said.
Hoss’s Steak & Sea House
Hoss’s Steak & Sea House is having difficulties staffing nearly all of its restaurants, said company President John Brown. Four or five are staying closed on Mondays and a couple are open only for dinner certain days of the week, Brown said.
The company hasn’t been able to get a full complement of workers since about June, when restaurants could begin to reopen after the initial pandemic closures, Brown said.
The problem never occurred before in his 37 years of working for Hoss’s, Brown said.
“Maybe in a location or two,” he said. “Not across the board.”
The main causes are the government’s stimulus checks and the generous unemployment compensation, he said.
A secondary factor is the decision many have made to stay home with children learning remotely, so they can provide help with lessons, Brown said.
“The economics work out better for parents to stay home and get paid,” rather than to go to work and pay a baby sitter to help kids learn, he said.
“It’s terrible,” he said of the overall situation. “On so many levels.”
For many people, staying home and getting paid has eroded morale and undermined mental health, he said.
“They’re laid off and financially fine,” he said. But they’d be better off “at work socializing with co-workers and providing some value,” he said. “Serv(ing) a purpose and be(ing) productive.”
Conversely, there are some who are “enjoying this hiatus,” he conceded.
Even before the pandemic, there was a labor shortage in Blair County, aggravated by a high level of recent retirements, ABCD Corp.’s McKnight said. Then jobs disappeared because of COVID-19.
Now, with those positions reappearing, and with unemployment at about 8% here, there should be plenty of workers available, McKnight said.
But there’s not.
“Something doesn’t add up,” McKnight said.
In March, there were 8 million job openings, more than ever before, according to the U.S. Department of Labor, as cited in a MarketWatch article that McKnight shared.
“Yet many companies say they are struggling to find qualified workers to hire,” the article stated. “A record 44% of small businesses, for instance, said they could not fill open jobs in April, according to the National Federation of Independent Business.”
The problem may be real, but the cause isn’t clear-cut, the state Department of Labor & Industry, part of the Democratic administration of Gov. Tom Wolf, said in a communication last week.
“L&I has not found the additional unemployment benefits … to be a primary factor in the perceived labor shortage,” wrote department spokeswoman Sarah DeSantis in an email.
There are reasons other than the generosity of unemployment benefits for not having returned to work yet, according to the department.
“Many Pennsylvanians are still waiting to complete the full vaccination process, or are facing other pandemic-related factors that prevent them from rejoining the workforce, such as children remote learning from home or a lack of child care,” DeSantis wrote.
Still, pressure is mounting to do something, and it’s being felt by the Democratic administration of President Joe Biden, as reflected in a White House “fact sheet” issued recently on “additional steps to help Americans return to work” — steps mainly comprising removal of “barriers.”
Unemployment compensation benefits are part of the problem, the fact sheet seems to concede with its inclusion among barrier-removal strategies a presidential instruction to the Department of Labor to “clarify rules of the (Unemployment Insurance) Program.”
“Specifically, the Secretary of Labor will issue a letter to states to reaffirm that individuals receiving UI may not continue to receive benefits if they turn down a suitable job due to a general, non-specific concern about COVID-19,” the fact sheet states.
There are legitimate reasons for turning down a job offer, but they must be specific, according to the fact sheet.
“These reasons include, for example, that (a) worker has a child at home who cannot go to school because of the pandemic or that the worker is offered a job at a work site that is out of compliance with federal or state health requirements,” the fact sheet stated.
The DoL will also be working with states to reinstate work search requirements that were suspended because of COVID-19, according to the fact sheet.
Some states have already reinstated those requirements, on the initiative of Republicans.
Such an initiative has begun in Pennsylvania with the recent approval by the state House Labor & Industry Committee of a bill that would require reinstatement of work search.
It’s time for work search to resume, given that vaccinations are becoming widely available, COVID-19 numbers are generally declining and the economy is revving up, said Bob Kutz, president of the Blair-Bedford Central Labor Council.
The state Department of Labor & Industry is actually working on reinstating work search already, but needs to ensure there’s enough capacity to handle the expected barrage of searches, including sufficient “bandwidth” on the PA CareerLink website, DeSantis said.
Meanwhile, employers are beginning to offer incentives to counter the unemployment compensation disincentives.
An electronic signboard at Arby’s last week advertised open interviews much of the day Mondays and an $11-an-hour starting salary.
“Creativity is coming into play,” in the “competitive” environment, wrote Gwen Fisher, site administrator for Pennsylvania CareerLink in Blair County. “Employers (are) taking actions not seen in recent years, namely sign-on bonuses, raises in starting wages, more on-the-job training opportunities for those job seekers who may have some of the skills.”
They’re also adopting retention and recruitment tactics like flexible scheduling, improvements in company culture and working environment, tuition reimbursements and paid childbirth leave for both parents, Fisher wrote.
The situation gives workers in the market for jobs “a lot of choices,” provided they have the needed skills, Fisher wrote.
CareerLink can help with one-on-one career counseling and by steering clients to retraining programs, some of which may be fully subsidized, according to Fisher.
Because the overall number of service industry jobs may be shrinking, potentially making it harder to move “laterally,” it may behoove service workers to “skill up,” so they qualify for jobs that pay “life-sustaining wages,” Fisher wrote.
“The services at our sites are no-cost,” Fisher wrote. “We offer one-on-one personal career services to help get people ready for their next jobs and can guide them on which industries are growing, which jobs pay life-sustaining wages, which jobs will be in demand down the road.”
The Appvion workers who declined to go to the Tyrone paper mill did so mainly because they were unwilling to take the significant pay cut required, according to Mitchell Becker, president of the United Steelworkers local at Appvion.
“I was making $28 an hour,” Becker said.
The jobs being offered were paying $15, $16 or $18, he said.
Workers like him with a longstanding lifestyle based on wages like Appvion paid can’t easily adjust to wages 20% or more lower, because of regular monthly bills, house payments, vehicle payments, college loans and their customary practices of eating in restaurants, socializing and vacations, according to Becker.
Workers like him in the paper industry are also conscious that electronics have shredded that industry’s future, he said.
“People don’t want to stay in the same dying market for a reduction in pay,” he said.
Accordingly, he and others are opting for a career change through education, he said.
He is looking to obtain a two-year associate degree from Penn Highlands Community College or South Hills School in information technology, he said.
It’s not what he anticipated when he began work at Appvion, but at 55, he can’t retire yet, he said.
The motivation to find a field with “growth potential” is even stronger for younger workers, Becker said.
Fortunately, the generous wages from Appvion enabled him to save, his wife has a good job at Van Zandt VA Medical Center, and she’s thrifty, so they should be able to make the transition without worrying about losing their house or vehicles, Becker said.
Fortunately also, he’s getting unemployment — the maximum $572 per week, with $8 for dependents and a $300 COVID-19 supplement.
That compensation all goes toward medical insurance for his family, for now, he said.
While an IT job might eventually enable him to duplicate his Appvion earnings, the UC money means reduced circumstances for now.
“No more going out to eat two nights a week,” he said.
Becker could have opted for union work as a pipefitter or millwright in Pittsburgh or Cumberland for good money, but that would have entailed being away from home, and he didn’t want to burden his wife with the care of their children, he said.
Other Appvion workers have opted to return quickly to the workforce: In addition to the three who went to the Tyrone mill, three or four went to Small Tubes, some to JLG Industries in Bedford, some to JLG Industries in McConnellsburg, some to Carlisle Rubber, Becker said.
He knows of no one “sitting around because I’m making so much money on unemployment,” he said.
Mirror Staff Writer William Kibler is at 814-949-7038.
Unemployment compensation benefits available since the pandemic began comprise regular benefits, regular extended benefits, special federal benefits for workers previously not eligible for unemployment compensation, coupled with special federal supplements and special benefit extensions, either by increasing time permitted for individuals to collect or the setting of durations for benefit programs, according to state Department of Labor spokeswoman Sarah DeSantis.
Basic unemployment pays about half a worker’s wage for 26 weeks.
The basic extension was for 13 additional weeks.
A special federal extension initially added 13 weeks,
followed by 11 more weeks.
Later, program ending dates further extended unemployment benefits.
A special federal program made self-employed, gig and
contract workers eligible for benefits.
COVID-related supplements added $600 a week for a time, an amount that later went down to $300 a week.
Currently, COVID-related extensions and the $300 supplement will expire in September.
There are people who legitimately could be collecting benefits from mid-March 2020 to September of this year, DeSantis said, citing musicians whose employers have been and will be shut down until then.