Why are the jobs not filled with so many unemployed people in the Utah economy?
Despite a record number of Utahns claiming unemployment benefits every week, some companies are struggling to find workers to fill vacancies.
Vernon Hanssen, CEO and co-owner of Gourmandise, a gourmet bakery and café based in Salt Lake City, said finding candidates for hire in the food and restaurant industry has been particularly difficult lately.
“We have been trying to recruit at all sites for months. All the restaurateurs I know are trying to hire, ”he said. “We have few to no applicants, and many don’t even show up for in-person, Zoom, or open interview windows. We spend hundreds of dollars a month to post on different job boards. All the other restaurateurs that I know are in the same situation.
This inability to hire more people puts additional pressure on staff to provide adequate service to customers, which will increase as restrictions related to the pandemic are relaxed in the coming weeks.
Hanssen accuses the extension of state unemployment benefits and the federal weekly bonus combined with the strength of the economy to be the reason for “the creation of the most difficult labor market that I have seen in years. 15 years in which we have owned Gourmandise “.
“All the restaurants are hiring, but no one is applying,” he said. “I want to open a new location and hire about 50 people, but at this rate, I don’t know if there are enough people in this state who want to work to be able to staff a restaurant. I literally can’t open my terrace downtown because I don’t have enough waiters and few even apply.
With the passage of the American Rescue Plan Act of 2021, a weekly allowance of $ 300 is still available for those applying for unemployment benefits until September 4, said Kevin Burt, director of the Insurance Division. -Utah unemployment. But this temporary amount should not prevent individuals from seeking permanent employment.
“It is important to remind employers that if individuals refuse suitable work, they can and should report that refusal,” said Burt.
As for the problem of not having enough people to fill vacancies, analysts believe this is an issue some industries will face as catering businesses move to operating at full capacity after the pandemic.
“In the future, that will be one of the struggles – there just aren’t enough people to meet this demand from this very high growth area,” said the vice president and senior economist of the Zions Bank, Robert Spendlove. “What’s really interesting in Utah in particular is that our labor market participation has returned to pre-pandemic levels. So we have essentially not only returned to this low level of unemployment, but we have taken people off the sidelines and back into the workforce where we were before. The only problem we still have to resolve is the high number of people claiming unemployment insurance benefits and the specific sectors of the economy that continue to struggle. “
He noted that for people who have been displaced from their jobs for an extended period – over six months – due to the pandemic, it becomes really difficult to reconnect to what they were doing before.
“People lose those connections, they lose skills, sometimes the business shuts down completely. And so they kind of evolved, ”he said. “So some of those former restaurant workers can now work in construction or they can work for Amazon. They’ve kind of moved to a whole different field, so it will be difficult, especially with such a tight job market, for some of the companies that have suffered the most to get back to where they were before. “
Another economic analyst said that an additional consideration for potential job applicants could be the potential health risks involved in a high-exposure industry such as the restaurant business.
“Part of factoring, too, might be, ‘I need a job, but the only job I can get is the one that’s going to put me in touch with COVID people and I’m not all just not ready for it yet? “” said Utah Department of Workforce Services chief economist Mark Knold.
Regarding the state’s low unemployment rate and historically high unemployment claims, he said a few factors at play are creating a seemingly incongruous economic situation in the Utah job market.
“(Let’s use) a coin analogy. You have the room full of chairs and those chairs are jobs and then they take some out and then people have to get up in the room and look for another chair, ”he said. “Everyone in the room is still considered to be in the workforce, but then you have people who have been in the room for so long or long enough and there are no chairs, they give up and leave the room. room. This is what is happening with unemployment (currently).
“When they leave the room, they are no longer counted in the statistics. This is what essentially happens in this environment, ”he added. “Most of the time, your unemployment rate goes down for a positive reason, which is that people who no longer have a job go looking for a job. But it is possible during short spells and tough times when the unemployment rate may drop for a negative reason – just people leaving the workforce. “