No easy answers on labor shortage

‘We are going to be analyzing this for years’


Observer staff

Where did all the willing workers go?

It’s a question business owners, economists and government officials have grappled with since the State of Vermont’s state of emergency ended in the spring and the economy ostensibly re-opened after 15 months of pandemic restrictions.

Trillions of dollars in federal pandemic relief continues to flow into state and local economies nationwide. Programs like the thousands of dollars of stimulus payments mailed directly to citizens, enhanced unemployment insurance that has tipped the scales against returning to low-wage jobs and an eviction moratorium that has kept people housed regardless of their ability to pay rent has helped ensure the basic needs of citizens have been met.

But the amount of federal relief has been imprecise, Rep. Peter Welch acknowledged in an Aug. 8 interview.

“We had to do something quick and get money out the door,” said Welch. “There’s no way you can get that precisely right. In some cases, it might be a little too much, or way too much, and in other cases, it may be not enough, or way too little.

“It was significant relief and it really made a difference,” he continued. “It meant that people were able to get from one side of Covid to the other. We still have a ways to go, but I think we’re moving into the recovery phase now, not the relief phase.”

Public Assets Institute, a non-profit research organization in Montpelier, tallied the federal relief money that has come into Vermont since March 2020 at $10.4 billion.

That amounts to a third of Vermont’s total personal income in 2019, the group’s research shows.

According to Policy Analyst Julie Lowell, a third of the support has gone directly to individuals in the form of unemployment benefits, stimulus payments and tax credits; a quarter has gone to businesses through the Paycheck Protection Program and grants; and the rest has gone to public services helping Vermonters maintain housing and access healthcare, education and other social services.

“We’ve never seen federal spending on a level like this,” said Jeff Carr, president and senior economist at Williston-based Economic and Policy Resources.

Carr notes that the national savings rate — the percentage of income people are saving rather then spending — has spiked through the pandemic.

“People have a lot of savings,” he said, “which means they don’t have to make short-term decisions and live paycheck to paycheck … I think people are re-evaluating what they want to get our of their careers. They are making multi-dimensional life decisions and it takes a while for people to prioritize and figure out what’s important to them.”

Also, with the coronavirus still circulating and cases again on the rise, close contact jobs continue to be less attractive than before the pandemic, Carr said.

“The pandemic is not over,” he said. “It is still on people’s minds and still affecting their decisions. The jury is still out on all of it. This was a seismic, transformational event. We are going to be analyzing this for years.”

Welch agrees. “The pandemic has had a profound impact that is being worked out, and frankly I don’t think we know exactly what the long-term changes to labor force participation will be,” he said. “The truth is, we don’t know what accounts for the labor shortage.”

The tight labor market has forced businesses to think creatively about how to attract employees.

The Williston Fire Department spread the word about staff openings during the annual 4th of July parade this year.

At WalMart, which has a store in Williston’s Taft Corners area, starting pay was increased in February from $11 to $13, according to Communications Director Anne Hatfield. In July, the company announced it would cover the costs for its workers to earn college degrees at select schools. Previously, the company had cost-shared college tuition.

Meanwhile, Vermont restaurants and tourism businesses are competing with each other for workers.

“We’ve had help-wanted ads for months, and we get very few responses,” Green Mountain Inn owner Patti Clark of Stowe said in a June interview with VTDigger. “It’s very hard to hire locally right now. A lot of people left the workforce. A lot of people don’t want to come back to work full time. They want to be part time. Some people, they’re just not comfortable coming back into the workplace. They may have children, they may be taking care of people that may be health-compromised. There’s a lot of fear in the workplace.”

The shortage of workers is particularly acute in the hotel’s restaurant, Clark said. “It’s really difficult to hire restaurant staff right now,” she said, even though the hotel has long paid above $15 an hour.

“It doesn’t matter. You can pay $20 an hour, and we still wouldn’t find the staff,” she said. “It’s shocking.”

The shortage of staff has caused the inn to discontinue lunch service and impacted those who are working. “I can see a lot of our staff are getting beaten up, burned out, tired,” Clark said.

In a July report, VTDigger also explored the labor shortage in the elder care industry. At an assisted living facility in Vernon, manager Rookie Olson said he can’t seem to hire or retain anyone.

After advertising for a nurse for more than a year, he finally managed to hire someone in July, but he’s still desperately searching for two resident assistants to help the 16 he has on staff.

Hiring is only the start of the battle. What few staff members Olson managed to bring on in the last couple of months have left within a matter of weeks.

“I hire, they leave, I hire, they leave. I hire, they leave,” he told VTDigger. “It’s like a revolving door.”

The dynamics may change in early September, when enhanced unemployment programs end, affecting roughly 17,000 Vermont residents.

“The federal CARES Act programs played an important role in providing temporary assistance to make sure Vermont workers were supported during a time of great uncertainty throughout the last 17 months,” Vermont Labor Commissioner Michael Harrington said in a news release last week. “As these federal programs end, we know we have more work to do. The Labor Department, and especially our Workforce Development team, are already connecting with claimants and employers to help people get back into the workforce.”

— Sophia McDermott-Hughes and Fred Thys of VTDigger contributed to this report