'Number One Business Problem': Labor Woes Continue in Nebraska
By Will Bauer, Reporter/Producer Nebraska Public Media
May 18, 2021, 6 a.m. ·
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Brent Lindner doesn't like turning potential customers down, and he's had to do that too often lately.
"I always feel bad when people come in, and they want to spend money," Lindner said.
Two restaurant patrons walked into an empty Wave Pizza Co. in Grand Island on a sunny May afternoon, and they were quickly told by Lindner, who owns the restaurant, it was closed Thursday afternoon. He's had to close the downtown eatery from 2-4:30 p.m. Monday through Thursday because he’s experiencing a problem felt all across the country: a shortage of labor.
Even with high school and college students wrapping up school for the year and temporarily entering the summer workforce, restaurant and economic experts across the state say those extra bodies may not be enough to solve the workforce shortage that’s deeply affected some of the state’s blue-collar industries.
Across town, in northwest Grand Island, the shortage is also felt by Mikayla Pichler, an assistant manager at Panda Express.
"Right now, it's the worst I've seen it," she said. "We usually don't have an issue with applications or anything like that. But lately, it's just that we don't have applications. We're trying to get a banner, and I've noticed, everyone around here has banners. So, it's every restaurant right now.”
It’s also a perplexing problem for some because it's not unusual to see low unemployment figures in Nebraska, but it is unusual for Nebraska business leaders and economic experts to see 2.9% unemployment with as many open jobs in a variety of industries as there are right now. Experts and business owners say wages may have to increase, and extra unemployment benefits may need to end to help fill the state’s empty jobs.
“I think this is quickly becoming the number one business problem across the state," said Bryan Slone, the president of Nebraska's Chamber of Commerce. “We're hearing all over the state, from one end to the other, from urban areas to rural areas, just impossible, particularly in the hospitality industry, to find people.”
Business experts, like Slone, and economists say the shortage manifests for a multitude of reasons. There are now fewer young people in Nebraska. There’s hesitancy to work because of the COVID-19 pandemic, and there’s difficulty finding childcare for some working families who have children learning from home. Some people have left the workforce altogether. And some would point out that food service and agricultural jobs had the highest risk of death from the coronavirus, according to some studies.
For some jobs, federal pandemic unemployment benefits are currently more than wages, specifically in the hospitality industry.
Some have more optimistic outlooks on the shortage. Ernie Goss, a Creighton University economics professor, who tracks business conditions in the Midwest, said Nebraska's labor shortage is not as grave as other states that have much higher unemployment rates. He also pointed to one of his indexes that reported a large growth in manufacturing in the nine-state region.
The U.S. Chamber of Commerce said two weeks ago $300 weekly federal unemployment benefits – started during the pandemic – should end. Some states – all led by Republican governors – decided to stop those payments next month. Nebraska's decision is still to be determined by Gov. Pete Ricketts. But Slone, with the Nebraska Chamber, agrees with his national partners and those states. So, too, does Cindy Johnson, the president of the Grand Island Chamber of Commerce.
“We'd be supportive of incentivizing those that are working more than incentivizing those that aren't working," she said. "Because those that are working are really contributing to the economy, and we need their contributions. We need this economy to bounce back; we need products and services to be available and to be available in the quantities that the consumers need them to be.”
Nebraska's unemployment rate is tied for lowest in the country, according to March figures from the U.S. Department of Labor. On the other side of the argument are some that don't think unemployment dollars are the only reason why this labor shortage still exists. Zoe Olson, executive director of the Nebraska Restaurant Association, said it simply defies logic to say Nebraskans are lazy and just sitting at home.
“In Nebraska, we are hard workers," she said. "We're taught from a very early age that you work, and we have a strong work ethic here."
Those who draw unemployment benefits earned them, she said, adding it's wrong to say those Nebraskans are lazy even though they have been hardworking the rest of their lives.
"It's just wrong, and it's demeaning to people," Olson said.
One solution proposed is raising wages to incentivize a return to work. Both Chamber of Commerce presidents agree higher pay would probably convince some of the state’s unemployed workers to return, and so does Olson.
Bree Dority, an associate dean and associate professor of finance at the University of Nebraska at Kearney, studies the business of the Tri-City area – which includes Grand Island, Kearney and Hastings. Wages in that area of southwest Nebraska are already lower than the state average – nearly 20% lower in 2019 – Dority said. Wages were growing before the pandemic, however, but were still lower than the rest of the state.
"Overall, I would say that employers are saying we can't afford to raise wages," Dority said. "You increase wages, it's going to come out, and prices are going to rise. And we're already seeing prices rising in our economy, so I guess it's a tradeoff.”
For Dority and others, this shortage of workers isn’t a new problem. There was a shortage in Nebraska before the pandemic, where the top reasons cited by employers in the South Central Economic Development District, which includes the Tri-City area and surrounding counties, for hiring difficulty included “not enough applicants," “lack of experience” and “lack of occupation-specific skills."
"Higher wages to attract and retain qualified workers is part of the solution," Dority said. "But there are other issues to consider, including opportunities for training and degrees in areas of need, like housing, childcare, transportation, etc."
But this lack of workers, Dority said, reflects a greater problem Nebraska has had for a long time: more and more young people are leaving the state. It’s such a problem that it’s even been debated in the Nebraska Legislature recently.
But for Lindner, that debate doesn’t solve his ability to fill a Thursday afternoon shift.
Wave Pizza Co., which is one of five total restaurants Lindner owns in Grand Island and Hastings, has seen a small, but recent, rise in application numbers. That’s a good sign for Lindner and his manager. He said hiring a few extra people feels like hitting a home run in today’s labor environment. The shortage and pandemic have taken a toll. Lindner estimates he hasn’t taken a true day off since March of last year.
“I think there's many causes but and there's going to have to be multiple solutions," he said. "...There's not a get-out-of-jail free card on this one.”
As widespread as the problem appears to be, it’s not affecting everyone. A PepperJax Grill – adjacent to the Panda Express – is fully staffed.