Signs of economic conditions: strong demand for entry-level workers
COLUMBUS GROVE – Most years Brad Ellerbrock hires 25 to 30 people to work at the Dairy Whip he owns with his wife in Columbus Grove.
There is a demand for ice cream. There is money to pay the employees. Hours are available for workers. What he doesn’t have are people applying for a job.
“Isn’t that crazy?” Ellerbrock asked.
A short drive past the fast food signs shows how much help these businesses are looking for. There is practically a bidding war on some panels, with some offering $ 13 an hour for entry-level work, nearly $ 5 above the Ohio minimum wage. Some offer bonuses to new employees.
Other companies offer free meals, flexible hours, or tuition assistance to get you through the door.
“Obviously if you’re in the real world, there are ‘help wanted’ signs everywhere,” said US Senator Rob Portman, R-Ohio, on CNBC’s “Squawk Box” on May 18. “People pay big bonuses. Arriving at the airport yesterday morning I passed by Frisch’s Big Boy, they are offering $ 250. McDonald’s is offering a signing bonus of $ 500. “
The problem is even getting someone to the point where you’re talking about salary, Ellerbrock said. He advertised in print, word of mouth, and regular social media posts to spark interest in the quintessential summer job, picking up ice cream.
“I had no problem with people not showing up for interviews,” he said. “I can’t even get the requests validated. They have no idea what I’m paying for. I tell everyone we pay very competitively, but they don’t even come to the door to see what they could be paid for.
Even academics are a little puzzled, said Jonathan Andreas, professor of economics at Bluffton University, as the economy continues to reopen after the coronavirus pandemic has closed many doors.
“We are in unprecedented economic times so nobody really knows what’s going on at this point,” Andreas said. “We don’t have all the data yet, and we’ve never had a situation like this before, historically, where we can look back and say, ‘Oh, yeah, that’s a repeat of that. ‘ We have a lot of guesses, but no one really knows what’s going on right now.
COVID-19 has a lot to do with these uncertain times. Many restaurants closed their doors last April or switched to drive-thru only.
“With a lot of these jobs when restaurants closed, workers weren’t just sitting around waiting for their jobs to come back,” said John Navin, dean of the Ohio Northern University business school. “A lot of other companies were hiring people back then. … There has been an increase in online services. There has been an increase in deliveries and groceries. Suddenly the demand changed, and they had to move as well.
Andreas said 4% of the workforce changed industries in the past year.
Now, with the virus restrictions lifted, restaurants are hoping to get back to normal. However, they can’t just bring back their old staffs that have moved.
“In the latest NFIB survey, a record 44% of small business owners report vacancies they can’t fill. They see sales growth, but those sales are being held back by the lack of workers. Finding qualified employees remains the biggest challenge for small businesses and slows economic growth, ”said Roger Geiger, executive director of NFIB in Ohio, in a press release.
The number of jobs in the recreation and hospitality industry rose 62.3% in April from a year earlier, to 481,100 jobs, according to statistics from the Ohio Bureau of Labor Market Information.
Within a 20 mile radius of Lima, there are 305 hospitality and restaurant jobs listed on OhioMeansJobs.com, or 11.3% of available jobs.
“The service sector is increasing its spending. They are considering hiring because spending on restaurants, tourism and travel is increasing, ”said Andreas. “There are a lot of workers who had worked in this sector and who have now gone to seek employment elsewhere. To attract people to their new areas, they have to raise the bar a bit. “
Another factor is federal unemployment benefits, which started at $ 600 a week before declining to $ 300.
“For an unskilled, low-wage worker, that $ 300 a week, added to regular unemployment over what they were previously earning, could be a significant increase in their wages,” Navin said.
In Ohio, that $ 300 ends on June 26. US Senator Rob Portman, speaking on CNBC’s “Squawk Box” on May 18, said other states should drop the extra pay as well.
“It will be a competitive advantage for the advancing states,” Portman said. “By the way, about 15 states have already taken a step forward and said, ‘We’re going to have to end that extra $ 300 federal supplement,’ which as you know is amazing. We have never done this before. We did it in the last great recession, but we did it to the tune of $ 25 a week, not $ 600, then $ 300 a week. It is important to get people back to work. “
It can be more complicated than just the financial implication, said Howard J. Klein, professor of management and human resources at Ohio State University.
“Part of it may be unemployment benefit deterrence, but I think the issue is more complicated than that,” Klein said. “It’s not that they don’t want to work, maybe it’s that they can’t at the moment. They have to stay home because the school is online or there are no daycare options. “
The companies that find their next employees are the ones that think beyond hourly wages or signing bonuses, Klein said.
“In a tight job market, this is the value workers get from their jobs,” Klein said. “What is the employer’s value proposition? Of course, it’s the pay and benefits, but it’s also the culture, the experiences, the opportunities that they offer to workers. “
Klein noted that a study showed that many employees would be willing to take a pay cut if it was good to tell people where they worked because “they want to believe that work matters and can brag to their people. friends and family from where they work. ”
Andreas said he was not yet concerned about the rise in wages advertised on signs in the region. He sees inequality shrinking after 20 years of what he considers the Federal Reserve Board artificially maintaining inflation to keep unemployment low. Inflation rates in recent years have remained well below 2%, he said, and recent inflation rates around 2.3% are not yet of concern.
“When we have a tight labor market, what you tend to see is that the inequalities go down,” he said. “You don’t need a minimum wage increase because the wages just go up. It’s sort of a more market-friendly way to reduce inequalities. “
Businesses need to be careful not to over-promise anything, Klein said.
“With things as difficult as they are now, it can be tempting to overstep a job posting or downplay the less attractive aspects of the job,” Klein said. “Doing this will backfire on us. You’ll get candidates and hire new people, but those new hires will quit days or weeks later when they realize the job isn’t what it was presented. You must always be real and genuine. “
These are the concerns of the economy as a whole. In his own words, business owners like Ellerbrock are simply worried about keeping their doors open.
“It could get really serious in the fall if we don’t have enough people,” Ellerbrock said. “I had heard stories about places closed for a day because they had no workers.”
Until then, he will continue to try to attract potential workers to his ice cream stand in Columbus Grove.
“If you know someone looking for work, send it to me,” he said.
A sign at the Burger King on Shawnee Road in Shawnee Township promises a free meal for those who interview there.
Kentucky Fried Chicken on Elida Road in Lima is trying to attract potential employees with a salary of $ 13 an hour.
A sign at Wendy’s on Perry Street in Ottawa tries to attract potential employees to work for the restaurant.
A sign in the window of McDonald’s on Elida Road brags about the benefits of working for the restaurant chain.
Contact David Trinko at 567-242-0467 or on Twitter @Lima_Trinko.