Although April unemployment claims indicate people are still looking for jobs, Chilkat Valley employers in the food and restaurant industry are struggling to find staff.
A year into the pandemic, April unemployment claims were 147—down compared to the 243 who filed in April 2020 but still more than four times as high as April 2019. Industries where a significant number of people have stopped filing unemployment insurance claims include construction, transportation, health care, accommodations and food services, though claimant numbers in all of these categories are still well above pre-pandemic levels.
Despite the higher-than-normal number of unemployment filers in April, several businesses have had to reduce hours in recent months due to lack of staff. Both the Chilkat Restaurant and Bakery and Sarah J’s Espresso Shoppe have reported difficulties fully staffing. Howsers IGA has returned to winter hours due to a staffing shortage. Mountain Market has also cut back hours.
“We put an ad in the paper and we didn’t get a single application after two weeks. Normally, even without an ad in the paper, we’re getting a trickle of applications,” Mountain Market co-owner Mary Jean Sebens said. “We had to cut our hours this winter because we didn’t have enough people. We had to close the kitchen one day a week. That’s a first.”
What’s causing the employee shortage in the food services industry is harder to pinpoint. Some employers cite the federal boost to unemployment benefits, which has been $0, $300 and $600 per week at various points during the pandemic.
“Our feeling is the COVID-19 money was a double-edged sword. It probably helped people who needed it, but I think it was taken advantage of as well. It disincentivized people to work because they can be collecting unemployment,” Sebens said.
The lowest starting wage for Mountain Market employees, usually those in training, is $12 per hour. In months leading up to the pandemic, the average weekly unemployment check in Haines was roughly $250, the equivalent of $6.25 per hour for a 40-hour-per-week job. Last spring, after the federal government approved a $600 weekly boost to the state’s unemployment benefits, which top out at $370, the average weekly check in Haines was roughly $800, the equivalent of $20 per hour.
Between August and December 2020, the federal boost to unemployment dropped to zero. Weekly unemployment checks in Haines averaged $140, the equivalent of $3.50 per hour, during this time period. At the beginning of 2021, the weekly boost from the federal government increased to $300. Weekly checks this year have averaged $430, the equivalent of $10.75 per hour.
Citing a reopening economy and workforce shortages, in May, the state announced it would end participation in the federal unemployment boost on June 12. But those who study the Alaska economy have said the cause of the workforce shortage is likely more complicated.
“There are many theories as to what is causing this national (workforce shortage) trend including unemployment benefits deterring people from seeking work, lack of childcare keeping people at home, age demographics and more,” Haines Economic Development Corporation (HEDC) analyst Sylvia Heinz said. “The consensus is that unemployment benefits are unlikely to be the main culprit, and it is impossible to fully understand the complexity of the issue as research can’t keep up with the rapid changes.”
HEDC director Sally Andersen said her observation is people who worked low-wage jobs in Haines pre-pandemic have pivoted, leaving town or finding work in other sectors.
Sebens agrees that there are other factors at play. She said while she’s particularly short-handed right now, staffing challenges predate the pandemic.
“For several years, I feel like it’s been challenging to field enough people to get the job done without asking people to work extra or the owners to work extra. It feels like Haines has a shrinking workforce,” she said, adding that the seasonal nature of the town’s workforce and high cost of living could play into it.
Some have argued the government should offer return-to-work incentives, instead of reducing unemployment benefits, to encourage people to return to work.
“You can keep unemployment insurance as-is and then provide some kind of return-to-work bonus,” University of Alaska economist Mouhcine Guettabi said in an interview with Alaska Public Media. “Or make the wages that the worker would potentially earn higher than unemployment earnings. That way, you could potentially get the people who were staying at home because unemployment insurance was more attractive than returning to work — but you could also accommodate the people staying home for other reasons.”
Statewide, April’s job count was up 6.9% from April of 2020, but still well below April 2019 levels, according to a press release from the Alaska Department of Labor. Industries that have recovered the most since April 2020 were those hit hardest when the pandemic began, like leisure and hospitality, but job numbers in these areas have yet to fully recover.