It’s been well-documented that the restaurant industry is having a hard time finding workers. But it’s not just burger joints and coffee shops that are short-staffed.
Businesses ranging from retailers to construction companies to manufacturing firms are scrambling to find workers. Even the City of Lincoln is struggling to fill jobs.
Earlier this month, Parks and Recreation Director Lynn Johnson said his department had only hired 65% of the workers needed to staff the city’s pools, which means hours of operation will be reduced when the pools open next weekend.
And the contractor that runs the city’s parking operations is offering $400 signing bonuses for several open positions.
Enhanced unemployment benefits may be a factor in why many employers are having trouble finding workers, but there are a number of other factors playing as much, if not more, of a role in keeping people out of the workforce, experts say.
Eric Thompson, director of the Bureau of Business Research at the University of Nebraska-Lincoln, said there was a sharp decline in the number of people actively participating in the labor force in the first quarter.
In fact, the 68.4% participation rate in Nebraska in March was the lowest in the state since December 1989, according to the Federal Reserve Bank of St. Louis.
“This is common after a recession,” Thompson said. “Individuals leave the labor force during a recession, perhaps after losing a job, and it takes quite a while to attract them back.”
He said that phenomenon is more severe this time around because both the recession — and the subsequent recovery — were so abrupt.
Jobs disappeared literally overnight last year during the spring as the coronavirus pandemic caused entire industries to shut down.
The federal government has attempted to lessen the sting of some of those sudden job losses by temporarily increasing the amount of unemployment payments that people can get, first with an extra $600 a week and then an extra $300 a week on top of whatever state benefits they qualify for.
As of this week, more than 20 states, all led by Republican governors, said they plan to end participation in the extended benefits program early, most of them sometime next month. Nebraska Gov. Pete Ricketts has not yet said what his plans are.
Thompson said the extra unemployment benefits, as well as government stimulus payments, may have caused a delay in some workers coming back into the labor force.
“Many workers do come back right away, of course. But some other workers have the family financial resources to wait for a while, and for other workers, the key is the government support they receive during and after the recession,” Thompson said. “The government support allows moderate-income workers to have the same types of flexibility in deciding on their next job that is available to middle-class and higher-income workers.”
However, there are several other factors that are likely playing much bigger roles in why employers in the state are having trouble filling many of their nearly 40,000 job openings.
Creighton University economist Ernie Goss said that even though COVID-19 cases have declined significantly and many people are vaccinated, the pandemic is still factoring into the labor market.
For example, though schools have been open for in-person instruction in Nebraska since last fall, some parents have chosen to keep their kids home, either to do remote learning or to home school them.
“School disruptions and infection fears of sending students to school has caused parents to remain at home to take care of these children,” Goss said.
He also said fear of being exposed to COVID-19, either by customers or fellow workers, has kept some people out of the workforce.
Other factors cited by Goss are more typical reasons for labor shortages: not enough workers with the skills needed in the industries that are hiring and a geographic mismatch between where the jobs are and where unemployed workers are.
In Lincoln, there clearly doesn’t seem to be enough people actively in the labor force to match the number of jobs available.
Lincoln Chamber of Commerce President Wendy Birdsall said there were about 11,300 job openings in Lincoln as of last month, about 1,000 more than in January 2020, before the pandemic. Meanwhile, there are only about 2,700 people receiving unemployment benefits.
“This is just an exacerbation of the situation we had pre-COVID,” Birdsall said.
Economists generally consider an unemployment rate of 4% or below to represent “full employment” — the level at which the economy functions well without creating inflation.
Other than a four-month stretch last year when the unemployment rate spiked because of pandemic-related shutdowns, Lincoln’s unemployment rate has consistently been below 4% over the past decade.
The long-term shortage of workers has started to put upward pressure on local wages.
According to data released Wednesday by the Bureau of Labor Statistics, the average weekly wage in Lancaster County in the fourth quarter of 2020 was up 11.5% compared with the same period in 2019. That was actually lower than the national average of 13%, however.
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