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Worker shortage impacting MT small businesses

MT businesses face worker shortage while recovering from pandemic loses
Posted at 8:31 AM, Apr 27, 2021
and last updated 2021-04-27 15:02:03-04

HELENA — The COVID-19 pandemic has had a significant impact on the service industry over the past year.

While crowds have been returning in Montana, many businesses aren’t able to reopen at full hours because they can’t find the employees to fill empty positions.

Both Steve’s Cafe locations in Helena have historically never had an issue filling seats with customers.

The pandemic certainly saw a hit to the business, but owner Steve Vincelli says by all indications customer levels are back to where they were before the lockdown.

“We are coming back very strong,” Vincelli said. “Our clientele has very much so exploded with in the last couple of months.”

The signs outside each location read “Open Daily,” but unfortunately that’s not true right now for the popular breakfast and lunch locales.

MT worker shortage

Vincelli says he made the decision to only open six days a week at each location because of staffing difficulties and not wanting to burn out the staff he does have.

“We are very much so missing having enough people around and it’s been a real struggle these last couple of months finding enough people to work at either location,” said Vincelli.

Eight out of ten job applicants haven’t shown up for interviews in recent months, which is perplexing to Vincelli since in the past he’s usually had a great pool of applicants when filling positions.

Vincelli says he works hard to create an environment that’s positive and beneficial for his employees. Plus, servers can make hundreds of dollars a day in tips due to the number of tables they turn during a given shift.

Steve’s Cafe isn’t the only business struggling to find workers right now as many other Main Street businesses across the state are having hiring difficulties.

MT worker shortage

If the labor shortage continues it may have big implications for the 2021 economy and the future of Main Street businesses.

Some business leaders and politicians have pointed to expanded unemployment insurance as a reason for the worker shortage. While that may be a contributing factor, there appear to be several significant factors resulting in a lack of quality workers applying for jobs according to the Montana Department of Labor and Industry (DLI).

If there were a significant portion of people choosing to live off unemployment, the state would see it in their unemployment data. However, Montana’s unemployment rate is back to pre-pandemic levels, sitting at around 3.8 percent for March. DLI says that means there aren’t a ton of workers actively looking to fill those open positions.

“The labor force are the people who are either working or looking for work, and that number has shrunk by about 10,000 over the last year,” explained State Economist Barb Wagner. “So that’s the thing that’s really driving our low unemployment rate right now.”

Wagner says some of the reasons for the drop in workers are people choosing to retire during the pandemic and parents that left the workforce to provide child care for their family while schools we conducting remote learning.

“We also know that 20% of Montana parents have experienced reduced hours compared to where they were before the pandemic because of childcare,” said Wagner.

DLI says the large drop of workers from the labor force is very concerning and one of the biggest challenges the state’s economy is facing right now.

“When people are unemployed they’re usually on unemployment insurance, we can target them for worker training, we can help them get into a new job. When people are out of the labor market we don’t necessarily know who they are and there are other challenges. Right now for people, it’s not just about finding a job, it’s about also finding child care at the same time and a job that can work with that schedule,” Wagner added.

MT worker shortage

Another challenge Montana’s small businesses are going to be facing moving forward is many chain stores did well during the pandemic and have increased pay for entry-level positions. According to DLI, Montana saw rapid wage growth of 7.9% in the past year.

“In comparison, I was ecstatic about a four percent wage growth in the past,” noted Wagner. “If you’re a Main Street business and you’re trying to rehire in that you may not have budgeted for those wage gains. Particularly restaurants who have been operating at 80 percent staff or less the past several months.”

DLI believes things will improve in the labor force in the next six to eight months. Yet that’s more time when many of Montana’s Main Street businesses will be losing out on potential revenue after a particularly difficult year.

Vincelli also believes things will get better in the coming months and hopes to be fully open by the time the summer rush begins. He also added that if anyone needs a job right now, they’re hiring.