Tucanos Brazilian Grill is a hopping place during the dinner rush, but the popular restaurant closes an hour earlier than it used to.
The restaurant chain is popular with diners for its skewers of freshly grilled meat, shrimp and unlimited salad bar. The demand might be high, but the chain struggled to fill server positions in recent months even after most COVID-19 restrictions in the City of Boise were lifted.
The problem? Not enough workers walking in the door with applications.
Manager Becky Srivastava said the store has had difficulty hiring due to the instability of pay in restaurant work and availability of other job options. Plus, there’s the added worry of workers being exposed to COVID-19 while on job and interacting with the public for hours.
To compensate, the restaurant opted to close earlier than usual and limited the number of seats available because of the lack of wait staff.
“A lot of our staff are making fairly good money in tips right now because there are so few of them, but they’re overworked because they’re taking on a little more than they normally would,” Srivastava said. “It helps them get paid more, but it’s wearing them out not to have as much off time.”
This isn’t a problem only plaguing Tucanos, either. Across Ada County, companies in hospitality, food service, and other lower-paying fields are having difficulty filling positions. Most of the country is still pulling out of the recession caused by the pandemic, but Idaho roared back to life. There just might not be enough workers to take the jobs.
More opportunities for higher pay
The reason why isn’t due to a single factor.
Idaho experienced double-digit unemployment last spring when the state first shut down due to the pandemic, but since then the number of Idahoans looking for work dropped back down to only slightly higher than pre-pandemic. It’s down to 3.3% state-wide in February and 3.7% in the Boise metro area from over 11% in April 2020.
Craig Shaul, research supervisor with the Idaho Department of Labor, said the workforce fought to keep up with demand from employers prior to the pandemic. Then, COVID-19 broke out and Idahoans left the workforce due to childcare issues, early retirements due to health concerns and some workers took advantage of training programs to step into higher-paying careers.
“There’s just a lot more competitors for that pool of workers employers are looking for,” Shaul said. “They have higher wage opportunities now.”
For example, he said programs like Google’s six-month IT support certificate are siphoning workers away from restaurants, Amazon delivery driving gigs and other hourly jobs and onto the career ladder. Restaurants and other hospitality industries took major hits during the pandemic, but Shaul said industries like construction continued to boom and drew workers away when times were tough in 2020. Now, they have new skills and don’t want to return to waiting tables.
What about unemployment benefits?
One of the federal government’s responses to COVID-19 was to introduce higher unemployment benefits people could claim for longer if they were impacted by the pandemic. Advocates for low-income Americans hailed them as a lifesaver for vulnerable workers, but others alleged the extra benefits incentivize workers to stay at home instead of pounding the pavement for a job.
Shaul’s data found they have some impact but are not the sole reason for the worker shortage. His analysis found the extra benefits, which are now an additional $300 a week, give the most incentive to workers who made less than $15 per hour prior to being laid off to stay home. But, the number of Idahoans claiming the benefits has been steadily declining. On January 2, 28,216 people claimed benefits, while only 24,659 did as of March 27.
“We have about 14,100 unemployed in the Boise-Nampa metro area,” he said. “If you managed to get them all working and unemployment wasn’t an issue, we would still have workforce problems. Employers wouldn’t have (unemployment benefits) to blame as a boogeyman, but they still couldn’t get the workers.”
And on top of all of that, Amazon came online at the end of 2020 with 2,000 openings paying more than double the minimum wage of $7.25 at $15 per hour. Although these jobs might have more reliable wages than restaurants, some of them require second and third shifts and warehouse work might not appeal to all potential employees. But, it’s another higher-paying option in the market for job seekers that didn’t exist a year ago.
‘Reexamine what you have to offer’
The hiring problems haven’t hit all companies, though.
Boise Valley Economic Partnership, an economic development group, recruited multiple companies to the Treasure Valley recently that haven’t had as many issues with hiring as restaurants and other sectors. Executive Director Clark Krause said the key is for companies to have a strategy to hire and retain workers by making sure wages, culture and benefits are competitive.
He said factors like unemployment benefits and Amazon’s sudden influx of jobs had an impact, but the workforce shortage was an issue before the pandemic and companies need to innovate to beat it.
“Amazon affected the market, but if you’re thinking that Amazon is the reason you can’t hire today I think you’re missing the point of really reexamining what you have to offer as an employer and how to become an employer of choice in the industry you work in,” he said.
Idaho’s wages have persistently lagged behind our peers. In 2018, the Gem State tied for the 7th highest percentage of hourly wage earners making the minimum wage of $7.25. In that year, Idaho and North Carolina tied for having 3.3% of workers earning the minimum, over the national average of 2.3%.
Businesses struggle to pay more
Raising wages helps attract more workers, but it can prove difficult for small businesses with slim profit margins to compete. Krause said the worker shortage will pose a challenge to the status quo of businesses with low wages operating in the state as they try to staff up and keep the workers they train.
“I think that some businesses are going to have to go through some tough times of reorganizing and coming up with new strategies to make sure they’re paying a decent wage to people who work for them,” he said. “I don’t see any way around that in the future.”
Back at Tucanos, which is a chain restaurant, Srivastava said there have been discussions of boosting wages to retain workers at the corporate level. But, other high operating costs are straining the company’s budget and make it difficult to increase workers’ compensation. She said servers currently make roughly the tipped minimum wage of $3.35 per hour along with whatever tips customers contribute.
“It’s something we’ve been working on at the corporate level, but it’s difficult because the prices for everything we do have gone up,” she said. “The company isn’t going well because meat prices have gone up and everything costs more and we’re supplying masks and gloves to stay open. Our operating costs have gone up considerably so at this point we’re trying to stay afloat.”