Labor shortage about to get worse, as students return to college
TRENTON – Businesses feeling the pinch of a worker shortage will soon see that challenge intensify as seasonal workers leave to return to school, well before the Labor Day holiday and fall shoulder season that undergird the Shore tourism economy.
Gov. Phil Murphy said that in addition to the risk the coronavirus Delta variant poses to the economic recovery, companies face a real challenge staffing up.
“It will get worse before it gets better because kids who go to college are going to start peeling off to go to college in a couple weeks,” Murphy said.
Tim McLoone of McLoone’s Restaurants, a group of 11 restaurants in North and Central Jersey, said there’s been “nothing ever like this before” in terms of the depth of the labor shortage – but that the early departure of college students is typical.
“We actually have more high school students working for us now than we’ve probably ever had, in anticipation of that,” McLoone said.
“Every year it’s the same thing that happens, and it seems to happen a little bit earlier every year, that the kids start leaving in the beginning of August because they want to grab a week or two of vacation before they go back to school.,” he said. “We try to discourage that, but there’s not a whole lot you can do. But it will affect us for sure.”
McLoone said even before this summer, he would love to hear from employees and applicants who attend Monmouth University or The College of New Jersey, since they would stay local and stay employed.
“It’s a rite of summer, I guess you’d say, the returning of college students to their campuses,” McLoone said. “This has happened every year. It’s just been worse this year.”
The situation has some companies offering another cash bonus package to add and retain workers.
Six Flags Great Adventure will pay seasonal workers who are still on the payroll on Oct. 31 an additional $500 to $1,000 or more, with a 10% bonus for wages earned from July through September and a 15% bonus for wages earned in October.
And it has advocacy groups like the New Jersey Business and Industry Association pushing Murphy to do more to help, even as he signs bills allocating more federal funds to provide grants to small businesses.
“While capital is king, we are still calling upon our state leadership to address our current hiring crisis that continues to prevent many small businesses from fully reopening,” said Michele Siekerka, the NJBIA president and chief executive officer.
Murphy sounded a sympathetic note.
“We’re open-minded,” Murphy said. “I don’t think this lasts forever, but there’s no question it’s real. I hear it everywhere I go.”
But being “open-minded to all,” as Murphy put it, doesn’t extend to withdrawing the state from the additional $300 weekly benefit the federal government provides to people on unemployment.
Murphy said data came out July 15 that suggested the $300 supplemental benefit wasn’t the reason for the labor force challenge, though he said he personally thinks it may be a factor.
“The reason I will not take it off, putting aside the economists, is there are so many people still hurting, and overwhelmingly that’s helping them, even if it may be keeping some folks out of the workforce,” he said.
McLoone said the $300 supplemental is one part of a complex explanation. He said a lot of the labor shortage resulted from the number of 18- to 25-year-olds who opted to drive for DoorDash, Grubhub or Uber that in the past may have sought a restaurant position.
His restaurants went to a $15 minimum wage around four months ago.
“This is the first time the lowest earners in the restaurant industry have had leverage. ‘If you don’t want to pay me, I’ll go down the street and go someplace else,’” McLoone said. “We never had to deal with that. And I think, quite honestly, I think it’s a great thing. I think a lot of restaurants are reevaluating what their metric is, what their business model is.”