'Really struggling:' Worker shortage hits central Oregon
Good news! Oregon's employment division says Jefferson County's economy has all but fully recovered from the pandemic.
The unemployment rate is barely two points higher than before the pandemic began. The county has 60 fewer jobs than before the pandemic. That's less than a 1% difference.
Not such great news for employers. They can't find workers.
"There's a suppression of the labor supply," says economist Damon Runberg, "and a superheating of the demand."
Runberg watches the Central Oregon economy for Oregon's employment department. He points to varied reasons for the worker shortage across the nation.
Here's what it looks like to local employers.
Bright Wood, Jefferson County's largest employer, has never struggled this hard to find employees.
"The labor pool is very shallow. I will attribute that to government handouts," says Daryl Booren, who has worked in human resources at Bright Wood for the past 15 years.
Booren calculates between unemployment and $300 a week in extra pandemic benefits, people collect $1,200 a week while not working. "Not very many people I know make that for manual labor. That's high for skilled labor."
Bright Wood manufactures wood components and millwork.
"It definitely inhibits the ability to produce the same volume with the same quality." Booren would like to increase his headcount by at least 5 to 10%. Until then, his employees have to work longer days and longer weeks. "Our employees suffer. They are the victims."
Actually, Runberg says, the average unemployment claimant takes home $370 a week plus $300 in federal payments, or put another way, an average of $16.75 an hour.
"Trying to find qualified candidates is absolutely horrendous!" Mark Foster has been part of the business his father started, KEITH Manufacturing, most of his working life, and chief executive officer for the past 15 years. He's never seen a worker shortage like this.
"Before COVID, we had 235 employees. We're down to 190," says Foster. "And the last two months have been the busiest months in our history."
Business dropped off during the pandemic, and KEITH Manufacturing cut back to 160 employees. Pent-up demand may contribute to the sudden influx in new orders for the company.
More work puts pressure on the smaller work force. "A lot of overtime and a lot of stress. We've got one department working a lot of hours."
The company's production schedule is out 14 weeks, almost two to three times longer than their usual five- to six-week turnaround.
The company advertises for workers through social media, something it hasn't done before. It pays $200 referral bonuses. It's raising wages.
Still, Foster says the company cannot compete with unemployment benefits and stimulus checks.
"You've got to start incentivizing people to go to work and not to stay home," says Foster. "Right now, there's a bigger incentive to stay home than there is to go to work."
Runberg points out that many manufacturers, like Bright Wood and KEITH, laid off several workers at the beginning of the pandemic. "It is incredibly difficult, incredibly difficult, to re-ramp up when you let go of 30 to 40% of your workforce," says Runberg. "That never happens in a normal economy."
Nothing is normal about this pandemic economy or the recovery. Between enhanced unemployment benefits, stimulus checks and other factors, total personal income in Oregon increased by 15% from before the pandemic.
People spent their money on goods, which superheats the demand for manufactured products. Bright Wood and KEITH compete with all the manufacturers in the region for the same pool of workers.
Half of the people on unemployment, says Runberg, are on temporary unemployment and waiting to get called back to their original job. They are not available to other employers.
Runberg sees more workers available in the service and hospitality industries. Then why can't restaurants find workers?
`"It's extremely hard." The worker shortage forced Dairy Queen owner Francis Millard to close the restaurant one day a week. No one is applying for jobs. "It has never been this bad," says Millard, who has been with Dairy Queen for 30 years. "I've always had enough employees to stay open."
Millard, too, blames government handouts.
"It makes people dependent on the government. The longer these people are unemployed, getting money not to work, the less incentive they have to work," says Millard. "I don't know how the government can keep doing this much longer until our government collapses."
Millard thinks people overlook opportunities. "Right now would be a wonderful time for college kids because a lot of these industries are willing to train people just to get people in."
Before the pandemic began, Joe Davis had 51 employees at the Black Bear Diner. Today, he has only 39.
"I'm really struggling," says Davis. "We talk to everyone who comes through the door. We offer referral bonuses."
Davis says his current employees are working more hours and they're working harder. "Instead of 17 people working, we have 13 per shift, and we have the same amount of business as we did in 2019."
It's not just quantity of workers Davis is losing. He lost long-term, quality employees to the pandemic.
"I lost four really good employees to other businesses that weren't affected by shutdowns," says Davis. "I lost a 20-year cook that wasn't going to tolerate getting laid off anymore. He started painting. I paid him very well."
Davis thinks people don't need to work. "There's not an urgency to get into the workforce. There's enough benefits out there they don't have to go back to work."
"It's a difficult transitionary period for workers as well," says Runberg. "There are people who remain on unemployment insurance because there were day care closures or school closures that prevented working parents from working."
Additionally, Runberg points out COVID still makes some people feel vulnerable. "There are people who for health and safety reason don't feel comfortable entering the work force until they have a vaccine or until the COVID numbers go down."
Construction and frontline workers
Even businesses that continued to operate throughout the shutdowns struggle to find enough people to fill jobs.
"We're totally backed up. We can't get enough workers to do the job," says Diane Taylor of Mike Taylor Construction. "If you want it before winter, it's probably not going to happen."
Construction continued throughout the pandemic, and COVID indirectly created more construction jobs for Central Oregon.
"People are moving here from everywhere," says Taylor. She says they have lots of jobs, and no workers.
"We've got a really good crew now with contractor's licenses," says Taylor. "We could do more work if we had more people."
Grocery stores stayed open throughout the pandemic, so the staff at Erickson's Thriftway has stayed fairly steady, but co-manager Dawn Stecher says it's hard to replace people who do leave. "Usually, we have a ton of applications all the time," says Stecher. "We get a few now, and a lot of them will come to work for a couple of days and say, 'No, I don't want to do this.'"
The store staff is down about five to eight employees from usual. Stecher also blames the shortage on generous unemployment benefits.
"I don't understand how Congress doesn't see what is happening. Are they that out of touch?"
Stecher says it's a workers' market right now while employers are desperate, but that won't last.
"When they get kicked off unemployment, everybody will be looking for a job, and people will really have to fight for a job."
Enhanced unemployment benefits expire in September, which may force more people into the job market.
Runberg says another factor shrank the labor market in a more permanent way.
Before the pandemic, economists predicted 2020 would have the highest ever retirement rate for Baby Boomers. "Retirement far exceeded that forecast," says Runberg. "The stock market exploded and likely pushed a lot more folks into retirement."
The trauma of the pandemic threw the economy into a nosedive. The boomerang recovery comes with its own set of challenges.
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