A May survey from the NFIB found that nationally, seasonally-adjusted 48 percent of small businesses reported unfilled job openings for the fourth consecutive month.
“Virginia small businesses are having a historically hard time hiring workers and getting back to pre-COVID levels,” NFIB Virginia State Director Nicole Riley said in a press release.
In the national study of 659 businesses, 61 percent of owners said they hired or tried to hire in May. Some reported that they raised compensation levels. Finding qualified employees was a problem for many small businesses. 93 percent of businesses that were hiring reported few or no qualified applications in May.
“Eight percent of owners cited labor costs as their top business problem and 26 percent said that labor quality was their top business problem,” the report states.
In Virginia the hospitality industry is facing staffing shortages. 83 percent of Virginia restaurants are currently hiring, according to a survey performed by the Virginia Restaurant Lodging and Travel Association cited in a WTVR article.
The Richmond Times-Dispatch reported that due to staffing shortages, amusement park King’s Dominion has some June weekday closures and shorter operating hours when it is open. The shortages are caused in part by problems in the temporary labor market — schools are letting out later this year, and by fewer employees are coming through the State Department’s foreign worker program.
A U.S. Chamber of Commerce report this week found low worker availability across sectors including leisure and hospitality, wholesale and retail trade, manufacturing, and financial activities industries.
Business advocates including the Chamber of Commerce and the NFIB argue that the extra $300 pandemic unemployment benefit is part of the problem. The benefit is set to expire in September, but some are calling for state governments to refuse the additional benefits.
Labor-affiliated think tank the Economic Policy Institute (EPI) and other worker advocates say that’s the wrong solution to address shortages for service-sector jobs that have gotten worse in the past year. The EPI argues that unemployment numbers probably understate the amount of current unemployment, and ending the benefit early will weaken states’ economic growth even as the economy isn’t fully recovered from the pandemic.
“There may be areas where some employers are struggling to staff positions, but the likely obstacle is not overly generous [unemployment insurance] benefits—instead it is wage offerings that are too low to make these jobs attractive,” EPI Senior Economic Analyst David Cooper wrote.
Some Virginia Democrats are calling for better enforcement of unemployment job-search requirements. NFIB Virginia Director Nicole Riley echoed calls from Virginia Republicans for a back-to-work bonus to incentivize people to return to work.
Riley said, “Small businesses would benefit from Governor Northam and the General Assembly addressing the labor shortage issue by refusing to reauthorize the additional federal unemployment insurance benefits and institute a ‘back-to-work’ bonus as soon as possible.”
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