Hiring hardships: Local employers believe beefed-up benefits make it harder to find workers

In the first few months of 2021, staff at Express Employment Professionals in Dubuque have observed a pair of noteworthy, divergent trends.

Co-owner Matt Timmerman said he has seen a 20% to 30% reduction in candidates seeking jobs in the past three to four months. Meanwhile, he has witnessed a sizable increase in the number of positions that local companies aim to add.

“There is a huge demand from almost every customer now,” Timmerman said. “They are in dire straits, in terms of needing people. Some of them are struggling to get product out the door.”

These two occurrences — an increase in available jobs and a reduction in those looking to fill them — have defined the labor market so far in 2021. Employers and economic experts alike agree that a robust federal stimulus package is influencing the market.

President Joe Biden last month signed into law the American Rescue Plan, a $1.9 trillion relief plan that included another round of stimulus checks for qualifying individuals and families. It also extended $300 weekly supplements to unemployment benefits through Labor Day.

Loren Rice, an associate professor of accounting and business at Clarke University, said unemployment supplements in particular have impacted labor markets.

“The one-time payments aren’t really impacting labor decisions,” he said. “If you were walking down the street one day and found $500, it wouldn’t affect your decision on whether to work. But if someone said, ‘I am giving you $500 per week,’ that likely would change your decision.”

The latest unemployment metrics from Iowa Workforce Development show there were 57,000 people employed in Dubuque County in February, which is 3,400 fewer than there were at that point last year.

Hard to hire

Gary Tressel, the owner of Die Makers Manufacturing in southwest Grant County, Wis., said he believes the inability to find new workers is leading to major changes in the manufacturing industry.

One of the most notable has been the steep increase in pay for new workers, including those who are landing their first job in the industry. These elevated wages are having a ripple effect throughout the sector.

“You have businesses that are offering $19 to $20 starting pay (per hour) to people without any experience whatsoever,” Tressel said. “That definitely means that I am going to have to pay more.”

Tressel said his business hasn’t directly faced challenges when it comes to hiring new workers, largely because his staff members generally come to the table with extensive experience.

In the long run, however, Die Makers Manufacturing relies on a steady influx of new people entering the trades. And Tressel fears that fewer people are pursuing these jobs.

“Why go and learn a trade if the government is handing money out?” he asked

The manufacturing industry isn’t the only one taking a hit.

Anthony Lehmann owns a pair of Burger King restaurants in Dubuque. In typical times, they would collectively employ around 60 people, Lehmann said.

Today, the combined employment of the two eateries sits at just more than 40.

That has forced the local Burger Kings to stick with reduced hours — closing at 8 p.m. nightly instead of remaining open later. It has also delayed plans to reopen the dining room.

Lehmann said he has increased wages and enhanced scheduling flexibility in hopes of attracting new workers. But such measures only can do so much when competing employers are taking similar steps to lure workers.

“There are very few candidates that we see come across these days,” Lehmann said. “I know we’re not alone. Everyone I talk to is dealing with the same thing.”

Pros and cons

Despite local employers’ hiring difficulties, Rice emphasized a couple of points concerning the federal stimulus package: First, it isn’t permanent; and second, it wasn’t necessarily bad policy to begin with.

Rice said the recent rush to hire new workers is driven largely by a strong demand for products. Without federal stimulus programs over the past year, the same level of demand simply wouldn’t exist, he said — and neither would the pressing need for more staff members.

Moreover, the additional benefits afforded many Americans the option of staying at home at a time when going to work might have put them at risk of contracting COVID-19.

On an individual level, this allowed those with pre-existing conditions or those caring for a vulnerable loved one to limit exposure and stay safe. On a macro level, this meant fewer people reporting to work and a diminished spread of the virus.

“One could make the argument that these benefits have directly slowed the growth of the virus,” he said.

Rice also noted that the relief package is not a permanent fixture. Rather, its most impactful component on the labor force — the $300 boost in weekly jobless benefits — is slated to expire in September.

That means the labor market will begin to loosen before then, he said.

“As you move closer and closer to that expiration date, there will be more and more people willing to take the job,” he said.