An empty grocery store shelf is a novel new thing in this post-COVID era. One can ponder about why. Is it because the product is not available, or because the store management lacks the manpower needed to keep shelves stocked?
But then again, it might be because there was no truck driver to make the delivery. In some cases, the product might not be available because of shortages of materials needed to produce it – materials like plastic in which to package it. In fact, plastic bags in which you are used to carrying your groceries home, have become a significant issue. Your store may not have them anymore.
While the plastic shortage has more to do with the disruption of the production of petroleum in Texas last spring than it has to do with COVID, much of the disruption of supply lines and labor shortages are largely the consequences of government mandated restrictions on businesses because of COVID and people’s fear of the disease. The labor shortage in Montana is impacting almost every business sector.
Many restaurants throughout the area need additional staff and are in a constant state of hiring. Owners of restaurants, as well as owners of other retail stores, are pressed into filling positions themselves which they cannot fill, which means that management of the business suffers.
Some restaurants are still operating at reduced capacity, not because of mandates, but because they cannot get the needed staff to provide full service. Some restaurants have reduced hours of service and in some cases eliminated days of service. Some have closed forever.
The Pryor Creek Café in Huntley, which recently changed hands, has Facebook notices that they are looking for help and have often had to close for breakfast and/or lunch due to staff shortages.
Other local restaurants have announced that they are no longer serving breakfast because of worker shortages or are not open as many days.
Bear in mind there are differences in how businesses are responding to the situation. Restaurants and retailers owned by large corporation chains are following corporate guidelines that are devised thousands of miles away, which sometimes puts them out of touch with what’s really happening locally. The locally owned Mom & Pop businesses are much more hands-on, and the proprietors usually show far greater commitment and determination, both in dealing with staff and in serving their customers.
Not all the reports are negative. Many businesses, locally owned especially, have been able to re-open on sound footing because they looked out for their employees, and their employees remained loyal.
Mike and Antonia Craighill, who own Soup & Such in two locations in Billings, were able to continue business without losing a single one of their 20 employees. “We are blessed,” said Antonia.
And, while it can be true that looking for assistance in some retail stores can be a lonely endeavor, from personal experience this reporter can testify that there are some businesses that seem to have doubled-down on customer service. So solicitous are their sales people that it is quite obvious that their competitive spirit is still very strong, and they plan on surviving by gaining greater market share.
It’s been months for some locally-owned business owners to have had a day off. One retail store owner said that he took his “vacation” early and is dedicated for the rest of the summer to working to fill in for his staff as they take their vacations. Most people involved in the retail business will report that there hasn’t been much vacationing for anyone, unless it was the enforced quarantine kind.
Some restauranteurs have been on the job every day since the beginning of COVID, even when they had to be closed, which time they took to clean and make repairs.
A contractor said he has informed his workers that they should not expect to be able to take vacations at all this summer. He also said that he is no longer accepting additional work because he cannot get the workers needed.
One of the reasons that entities trying to construct buildings are postponing or finding few bidders on their projects–such as Big Sky Economic Development recently experienced–is because general contractors cannot find the workers needed to do the work.
Even Yellowstone County News has felt the impact of the labor shortage in trying to fill slots for reporters and newspaper delivery for months.
So what is happening to Montana’s labor force? Where are the workers?
One of the most publicized explanations is that the federal COVID relief programs are encouraging workers not to work. For many, the generous unemployment benefits Congress has doled out is greater than were their paychecks. To go back to work would reduce their income.
Because of that, Montana’s Governor was the first in the nation to say “enough.” Gov. Greg Gianforte announced weeks ago that at the end of June Montana would no longer accept federal unemployment benefits, on the theory that without those benefits workers would return to the workforce. He more recently said since making that announcement the labor picture has improved.
How much of an impact that strategy will have may be too soon to know.
One national survey report said that while “the vast majority of the unemployed indicated they would like to start looking for work in the next three months, many did not express a sense of urgency.” The report contemplated that rising vaccinations, dwindling savings, and the opening of schools in the fall “will be key to pulling them back into the labor force.”
Another factor that may not be taken into account as much as it should be, points out one observer, is that one aspect of the COVID quarantines and shutdowns was that people discovered the benefits of working at home. Many of those not re-entering the local workforce may be workers who were unexpectedly laid off and discovered on-line jobs that they could do at home, and which paid more or fit better into their life situation. Global Work Place Analytics estimates that we will see 25-30 percent of the workforce working at home on a multiple-days-a-week basis by the end of 2021.
One of the consequences of a labor shortage is that wages are going up, as employers attempt to entice new workers or to out-bid the competition for workers. The political discussion about raising minimum wage laws up to $15 an hour is a moot point now that most entry level jobs are exceeding that. It turns out that the market has been driving wages all along.
Nationally, hourly earnings increased 0.3 percent last month and are up 3.6 percent over a year ago.
Many businesses are not only pushing up the hourly wages but are offering sign up bonuses.
Westmoreland Mining Co. is offering a $5000 sign up bonus in trying to find qualified electricians and heavy equipment diesel mechanics. They will even pay existing employees a $1500 bonus if they can refer someone to fill those positions, according to Wes Sessions, HR Programs Manager at Westmoreland.
Since these are jobs that pay between $36 and $45 an hour, Sessions is doubtful that lack of applicants is due to lucrative federal unemployment benefits. The benefits are not high enough to dissuade people from taking jobs with such high wages. Sessions said that a possible deterrent for applicants might be, what he sees as, a false perspective regarding the future of the company and of the industry.
There are years left in the life of the mine, he said, and beyond that there are years of reclamation work. And, even coal is likely to make a comeback given the reality of future energy supplies. No matter what, said Sessions, the jobs offer great career opportunities and experience.
Montana’s unemployment rate was among the first to start to decline after enforced layoffs and now remains among the lowest in the nation.
While Montana’s unemployment rate has gradually dropped from over 4 percent at the beginnings of the year to 3.6 percent, the number of people participating in the labor market is still below that of past years. It currently hovers at about 51 percent compared to an average range of about 64 percent over past years. The past couple of months it has increased. When employment is measured in relation to population numbers, it is also quite low. As a ratio of population, it hovers around 59 percent while at the beginning of 2020 it stood at 61 percent.
It should be noted that unemployment rates are based upon the number of people filing for unemployment benefits. If they aren’t qualified for benefits, they are not counted as being unemployed. Even though the unemployment rate is low there are actually fewer people in the labor market – there are fewer people employed compared to last year. The same is true of national numbers. Nationally it is estimated that there are 6.8 million fewer jobs than there were in February 2020. The national labor participation rate of 61.6 percent in June has not changed since August 2020.
The federal government announced an increase of 850,000 jobs in June, which was higher than what was projected to be 706,000. But interestingly the national unemployment rate increased from 5.8 percent in May to 5.9 percent in June. Most of the job gains are in seasonal jobs in the leisure and hospitality industry, public and private education, professional and business services, retail trade and services.
The most important sector, manufacturing, however, only had a job increase of 15,000. Jobs in manufacturing are more significant because that is the industry where most new wealth is created which grows the economy. Many of the other industry sectors, while important, are primarily an exchange of wealth, although segments of them can be new wealth generators, too. One such category is construction which actually lost 7000 jobs in June after having lost 25,000 jobs over the past two months.
