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Rogue Valley grappling with worker shortage

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Jamie Lusch / Mail Tribune In-N-Out Burger in Medford is trying to entice workers with pay of $15 to $17 an hour amid a labor shortage in the Rogue Valley.
Average unemployed person earning equivalent of $16.75 an hour in benefits

Rogue Valley fast food restaurants are in a bidding war for workers, hanging signs that promise pay of up to $17 an hour.

The proliferation of help wanted banners is the most visible sign of a problem plaguing local businesses, from restaurants and factories to schools and hospitals.

"We are hearing on a daily basis from employers that they need people and they can't find them," said Brad Hicks, president and chief executive officer of The Chamber of Medford & Jackson County.

Jackson County had 7,344 unemployed workers as of March. Meanwhile, businesses were running nearly 2,500 online help wanted ads for the Medford metro area, according to data from the Oregon Employment Department.

Although unemployed workers outnumber job postings, many people are remaining on the sidelines.

Experts say the local unemployment rate is hovering at 6.1% even as businesses scramble for workers.

They point to a range of factors that are slowing employees’ return to work, including high unemployment payments, lingering fear about COVID-19 and a lack of reliable childcare.

The federal government is paying a $300 weekly unemployment bonus through Sept. 4 that comes on top of state unemployment benefits.

The average unemployed person in Oregon is bringing in $670 a week. That person would need a full-time job paying $16.75 an hour to equal the federal and state unemployment benefits, according to the Oregon Employment Department.

Some business owners have had to shut down or limit their operating hours because they can’t hire enough workers.

This month, R&D’s Sandwich Factory in Medford closed down after the owners said they had been running with a skeleton crew for eight months, unable to keep their current workers or hire new ones. They said high unemployment payments and Gov. Kate Brown’s on-again, off-again restrictions on indoor restaurant dining pushed them over the edge.

The Point Pub & Grill in Central Point has posted a sign saying, “Due to lack of staff, we will be closed each Monday until further notice.”

Andy Atkinson / Mail TribuneSign in the doorway of The Point Bar and Grill in Central Point.

The sign invites people to apply for jobs online or in person at the restaurant’s Central Point or Medford locations.

Brenda Edwards, regional manager of Personnel Source Inc. in Medford, has been in the business of helping companies find temporary and permanent workers since 1987.

"There are not enough people who want to work to fill the jobs that are open. It's a complex issue," she said.

Some people are collecting unemployment benefits and evading work opportunities. When someone applies online with Personnel Source, a company representative often calls them back within minutes, Edwards said.

"They don't answer the phone or they often hang up," she said.

Personnel Source usually sees about 15% of job seekers fail to show up for appointments like orientation or a job interview. Now the no-show rate is about 60-70%, Edwards said.

"I've never seen this kind of demand on the employer side and the absolute dearth of interest and frankly, bad manners, among job seekers," she said.

Edwards said some workers have been lost to the Rogue Valley because they moved away after the 2020 Almeda and South Obenchain fires, which destroyed nearly 2,500 Jackson County homes.

She said with day care hard to find and many school children learning remotely or going to school part-time, many working parents have had to drop out of the workforce. Even in pre-COVID-19 times, families struggled to balance work and caring for children, Edwards said.

"It's like a Jenga tower,“ Edwards said, referencing the classic game in which players build precarious towers with wooden blocks. ”If you pull a part out of it, the whole thing crumbles. You can't expect wage earners to return to work if kids aren't in school.“

The upside of the competition for workers is that many employers are offering flexible schedules, such as four-hour work days, or allowing workers to be off on the days their kids are home from school, she said.

"We're seeing a lot more flexibility in what employers are offering," Edwards said.

If businesses stay committed to flexible schedules, families could benefit in the long run.

Oregon’s workforce numbers 2.1 million people. Of those, 350,000 are working parents who don’t have a nonworking adult in their households to care for children, and they work in jobs that can’t be done remotely, according to the Oregon Office of Economic Analysis.

Some companies are offering hiring bonuses, or they give retention bonuses when workers hit one, two and three-month benchmarks on the job, Edwards said.

Amy’s Kitchen, one of Jackson County’s largest employers, has seen demand for its frozen vegetarian convenience food boom during the pandemic. It expects to hire 120 employees in coming months, the company said.

Amy’s Kitchen increased starting pay across all levels by up to $2 an hour, gave raises to current employees and offers an on-site primary health clinic, retention and referral bonuses and training for career development, the company said.

Edwards said the lack of job applicants is taking its toll on businesses and people who are still working. Many employees are working longer hours. Businesses are paying overtime and having to raise their prices, and some can’t fulfill orders on time.

Edwards said she fears inflation will eat into wage gains.

"People who are putting in long hours are not seeing increased buying power. It's very disturbing that we are paying people not to work ― and we're working the people who are willing to work to the bone," she said.

Some states have decided to block the $300 weekly federal unemployment bonus. Other ideas floated by lawmakers in various states include increasing the number of hours people can work before they lose the bonus, or paying $1,200 to $1,500 bonuses to people who return to work.

Hicks, the local chamber of commerce president, said perhaps the federal government should ease back on the $300 weekly bonus before its September expiration date.

"At some point when you look at how well the economy is actually doing, the government is going to have to rip the Band-Aid off and do away with the additional benefits and let that be the incentive to go back to work," Hicks said.

But he urged a careful approach, especially at a time when many working parents don’t have reliable childcare or full-time school for their kids.

Hicks said some workers are also cautious about returning to work given the dismal performance of the Oregon unemployment system.

The antiquated system was unable to handle the record-breaking number of unemployment claims triggered by business and school shutdowns in the early months of the COVID-19 pandemic. Many people waited months to receive unemployment benefits, even as their livelihoods vanished.

Hicks said on-again, off-again state restrictions on businesses triggered waves of layoffs.

"People are still afraid to walk away from a sure thing with unemployment benefits to take something that could be suspended. It's made people gun shy. They say, 'Do I want to go back to work too soon to a position that is going to be eliminated and I'll be sent home again?' They can't afford this start, stop, start, stop situation,“ Hicks said.

He said many workers have been temporarily laid off. They like their jobs and plan to return, so they aren’t eager to jump to a different company.

Another factor straining the pool of available workers is the relatively fast economic recovery from the pandemic. Jackson County has regained jobs at a much faster pace than during the years-long recovery it endured from the Great Recession.

Before COVID-19 hit, the economy was strong, unemployment was low and businesses were searching for workers.

Demographically, the number of working age people isn’t growing. Baby Boomers are retiring and immigration was down during the pandemic, said Christopher Thornberg of Los Angeles-based Beacon Economics, an economic analysis firm.

America can reinvigorate its workforce numbers by improving its work visa program that brings in immigrant workers. It can try to entice senior citizens to continue working, he said.

Thornberg said labor shortages can have a silver lining by pushing up pay.

"Wage gains, especially for low income workers, are good for the country in the long run. But in the short run, they can be painful," he said.

Jamie Lusch / Mail TribuneHarry and David is hiring seasonal and year around jobs.

Looking forward, experts predict the economy will rebound despite the constraints of the labor shortage.

The COVID-19 vaccine rollout is well underway, and the government has pumped money into the economy with stimulus payments to people and enhanced unemployment benefits.

Total personal income in Oregon is now 15% higher than before the pandemic, due in part to wage gains but mainly because of federal financial aid, according to the Oregon Employment Department.

Many people who didn’t lose their jobs during the pandemic are sitting on savings, and most of those who were laid off had relatively stable incomes because of enhanced unemployment benefits, said Guy Tauer, Oregon Employment Department regional economist for southwest Oregon.

Local residents want to eat out at restaurants, travel and shop.

“They've been cooped up a long time. There's a spike in demand for things to get back to normal,” Tauer said.

Hicks said the tight labor market poses challenges, but there’s also a bright side. Many Rogue Valley businesses from a wide variety of industries are offering good pay and benefits.

"I would tell folks who want to work to look because the opportunities are available," he said.

Reach Mail Tribune reporter Vickie Aldous at 541-776-4486 or valdous@rosebudmedia.com. Follow her on Twitter @VickieAldous.