EDITOR’S NOTE: This is the second story in a three-part series on the impact of the COVID-19 pandemic on the local availability of goods, services and employment opportunities.
Many Bloomington businesses, especially restaurants, have increased their wages as they struggle to retain and hire employees. Some companies pay more for overtime. Others reduce their hours because they don’t have enough workers.
Bloomington Custom Cookie Maker Cooked pays its employees about 20% more today than a year ago, and its delivery drivers earn about 35% more.
“We are definitely increasing our wages as quickly and significantly as possible,” co-owner Jeremy Ness told the Herald-Times.
Like many businesses across the country, local restaurants have made adjustments to overcome a pandemic-induced labor shortage caused by unusually high numbers of people remaining out of the workforce, a professor said. of Commerce from Indiana University.
Fewer people participating in work
The participation rate, which measures the share of adults working or looking for work, was 62.9% in September, down 1.5 percentage points from a year ago, according to the Federal Bank St. Louis Reserve.
It might not seem like much, but it’s the kind of decline the state’s economy typically experiences over a decade, said Andrew Butters, assistant professor of business economics and public policy at the Kelley School of Business. from the UI.
“Getting that kind of movement (over two years) is really unprecedented,” he said.
And while the percentage change may seem small, it translates into tens of thousands of Hoosiers not working and not looking for work: In September, around 56,000 fewer Hoosiers were in the workforce than two years ago. earlier.
Almost 1,900 fewer people in Monroe County were employed or looking for work in September compared to two years earlier.
Butters said some people have decided to take early retirement, but many others are seeing increased demands in their households. When schools and daycares closed at the height of the pandemic, more parents had to stay home to care for or supervise their children while they attended school remotely.
Child care programs continue to operate at reduced capacity, as they too have difficulty recruiting workers. And parents who can find a place for their little one are also seeing the costs increase. According to LendingTree, the average annual cost per child for residential care increased 17% in Indiana over the past year, to $ 11,396. These expenses eat away the money parents left at the end of the month, especially since they are also seeing increased costs related to driving to work, business attire, and food.
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Thus, more and more, adults in two-parent households do not believe that it is beneficial for both of them to work, especially when a significant portion of secondary income is lost due to childcare and childcare expenses. job. And that calculation doesn’t even include the time parents spend commuting and the time they need to be away from their young children.
Butters said families facing the rising cost of elderly care come to similar conclusions.
“These are all factors that still contribute to the very low participation in the labor market,” he said.
Constant but still short hiring
Ness, of Baked, said he had encountered labor issues and price increases before, but never to that extent.
Baked has around 30 employees, and although it has a core of managers, bakers and drivers, Ness said he hired continuously all year round and felt like every time he hired a new employee, another left.
Baked makes custom cookies, allowing people to choose doughs including sugar, chocolate and peanut butter, add “mixes” such as mint sprinkles, cinnamon sugar or pretzels. , and add “after-cooks” including vanilla, honey and caramel frosting.
The labor shortage, especially among delivery drivers, has changed the business model somewhat. Before the pandemic, about half of revenue came from delivery orders. Today, about two-thirds come from restaurant and take-out customers.
Ness said Baked has found ways to increase people’s paychecks: Anytime an employee works more than eight hours a day, the extra work counts as overtime. Previously, only hours over 40 per week were counted as overtime. Baked now also pays 1.75 times the hourly wage for overtime, down from 1.5 previously.
Ness said the shortage of workers caused the company to essentially reinvest all of its profits back into its employees.
Cresent Donut owner Melissa Griffitts said she too had raised wages but was still struggling to keep and find employees.
She had just taken over the store before the pandemic and had to lay off staff due to restrictions on gatherings. When authorities lifted the restrictions, Griffitts said she was struggling to find people to work.
“No one wanted to come back,” she said.
The store’s most popular offerings include the maple bacon donuts and apple donuts, but it also has seasonal treats and specials like Star Wars donuts with a lightsaber on top.
The business is now operating, but Griffitts is still looking for help, especially for part-time workers who work weekends.
Staff shortages forced her to limit the store’s opening hours to 6 a.m. to 2 p.m. on Wednesday, Thursday and Friday and to 7 a.m. to 2 p.m. on weekends. Before the pandemic, she sold donuts around the clock.
BuffaLouie owner Ed Schwartzman said the restaurant, which offers chicken wings, sandwiches and salads, increased wages by around 25%, and although he said staff levels were adequate, he too is looking for delivery drivers.
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BuffaLouie’s sells its wings in lots between 10 and 50 and offers sauces and dry rubs from Memphis BBQ to Rasta Jerk and Loucifer.
Schwartzman said he’s trying to differentiate the restaurant from other potential employers by offering generous perks, including free meals, insurance, and a 401 (k).
Exiting the pandemic has proven difficult, he said, as a significant portion of the former employees did not return.
Jobs in direct contact with customers and pandemic
Ness said restaurants face another unusual challenge they’ve never seen before – more confrontations with customers. Due to the pandemic, employees often had to encourage customers to comply with health obligations such as face mask requirements, which in some cases reduced their tip income, and in others. case simply put them in difficult confrontations.
“Having a job in direct contact with customers… while forcing them to follow the rules… is certainly quite difficult,” he said.
Dealing with the pandemic has sparked some self-reflection among restaurant workers and has pushed some of them into other areas of work where they hope to face less mental strain, he said.
And other industries, some of which flourished during the pandemic, are trying to capitalize. Manufacturers of medical products such as Cook and Catalent have also raised wages. Catalent recently said he was hiring in Bloomington at $ 18 per hour. No experience needed. No awkward confrontations with customers.
And while many office businesses have been able to allow their employees to work from home, Ness noted that this was not an option for restaurants.
“We need our people here,” he said.
Butters said some of the people who left the hospitality and entertainment industry will not be coming back.
“It’s incredibly difficult for this sector in particular,” he said.
The shortage of workers is forcing them to get creative when it comes to hiring and compensation, Butters said. They have to operate unconventional networks and, more than usual, have to contact their current employee base to help them find other workers.
He said he expects some of the stresses that currently make life more difficult for restaurateurs to ease as the risk of COVID-19 infection declines and the capacity of health care providers to care for them. children and the elderly is increasing.
People who took early retirement due to the pandemic may not return to the workforce, he said, but it may have been just a “one-time blow” to the economy. because retirement levels could simply return to normal once the pandemic is over.
Some of the long-term economic effects of the pandemic are not yet clear, he said.
The pandemic required a quick economic shutdown for some sectors while increasing demand in others, and then a quick restart for industries that had been forced to downsize. All of these upsets are straining the job market, he said.
How companies adapt will likely have long-term consequences and could accelerate pre-pandemic trends such as a push towards automation, Butters said.
“As these companies have to make decisions about adjusting operations or changing the way they do business (…) (this) will have implications for the shape of the post-pandemic recovery,” he said. he declares.
Coming soon: Why Cook Medical might have an easier time finding employees in Illinois, North Carolina, Ireland and Mexico than in Bloomington.
Boris Ladwig is the municipal government reporter for the Herald-Times. Contact him at [email protected]