By Matt Roy, Independent Newsmedia
While reports show record job and wage growth, some local businesses have been hurt despite signs of prosperity.
At TJ’s Homestyle Restaurant in Avondale, the owners recently cut back on hours because they can’t find enough workers.
Don Holmes, co-owner of the family-friendly eatery, said he recently cut six hours out of their weekly schedule, while a “help wanted” sign hangs prominently out front.
“Were always looking, but we’ve been desperately short for about the past three months,” Mr. Holmes said. “We’ve never had this much trouble filling positions.”
He said a lack of applicants is only part of the problem; many who do come, quickly move on in search of easier work.
“We had one guy that came in not too long ago who was actually doing very well. But he’d only worked here about three days and he wanted his first raise. We said, you have to prove yourself first. And so, he walked out,” Mr. Holmes recounted. “As soon as they find out its real work, they’re not interested.”
He said the restaurant — originally opened in 1982 and purchased by his family in 2004 — serves mostly homemade fare and many workers are ill prepared for the skill and effort required.
“We do everything from scratch here and we’re picky about what we put out and we don’t do prefab food like other places,” Mr. Holmes said. “We have a prep cook here who does quite a bit. But the cooks, they have to stock their own stations and do their cleaning at the end of the day — and they don’t like that.”
Most of his 16 employees work full time and he is still short one cook position.
And though cooks can start out making dollars above minimum wage, younger workers seem to need more training and are not prepared to roll up their sleeves to get the job done.
One recent hire’s only prior experience was at Taco Bell and he’ll need extensive training to succeed in the role, Mr. Holmes said.
“A lot of it is today’s generation, the me-first. Nobody knows how to work nowadays and when they come out of school, they’re not educated on how to count money, write checks, sign a charge slip. I get kids that come in here who have absolutely no clue as to what to do with their debit card,” Mr. Holmes added.
According to recent data, the challenge of filling such positions is a national concern.
The NFIB — formerly known as the National Federation of Independent Businesses — is an industry association, which studies trends and advocates for small business owners across the country.
Their most recent jobs report, based on a survey or more than 10,000 small business owners in February, reveals the strongest job growth in the past 45 years.
But with more jobs available everywhere, some small business owners can’t seem to attract and keep the workers they need, according to the NFIB report.
The portion of small businesses reporting at least one unfilled position rose to 35 percent, exceeding the peak of 25 percent set in 2006.
According to Lee McPheters, Ph.D., a research professor at the W.P. Carey School of Business at Arizona State University and director of the school’s JPMorgan Chase Economic Outlook Center, the improving economy has exposed some structural weaknesses as well — namely, a growing worker shortage.
“Researchers have been telling us for years that we are facing a declining rate of population growth, and with retirements running at 10,000 a month and lower rates of labor force participation, we are seeing worker shortages,” Mr. McPheters stated in an email response.
He said the economy, reversing course after one of the worst recessions ever, has rebounded with 101 consecutive months of growth with unemployment rates dipping to a 50-year low.
And while this is good news generally, it poses problems for those trying to find new hires.
“This is an economy at full employment, creating lots of jobs,” Mr. McPheters stated. “And at the same time, we have seen actual declines in the percentage of the population in the core workforce category of 25 to 54 years of age.”
While acknowledging the unfilled position percentage has grown — he estimated the number at nearly 30 percent in Arizona — he stated that metric may have reached a plateau for now.
“While it is true that the percent of firms with positions they cannot fill is at a peak, nearly 30 percent, we also see that this percentage has finally stopped going up, although it is at a high level,” McPheters stated.
Arizona businesses face additional challenges because of the rapid influx of new workers from out of state, many of whom are well-qualified, which keeps the unemployment rate higher than the national average.
“While national population is growing only slowly, Arizona is among the top five states for population growth, and most of these newcomers are ready to enter the workforce,” Mr. McPheters stated. “As a result, the Arizona unemployment rate is persistently higher than the U.S. rate. We have plenty of openings for people in the skilled trades, but many young workers don’t have those skills. As a net result, Arizona is one of the top states for job creation, but at the same time we are among the four or five states with the highest unemployment rates.”
Despite higher unemployment rates, a strong economy and higher wages for entry level positions in Arizona will continue to put pressure on small businesses to raise wages, according to Mr. McPheter’s analysis.
“Ultimately, the labor market works to push up wages when there are a high number of job vacancies,” he stated. “Arizona wages will probably continue to increase throughout 2019 as employers compete for workers.”
While some small business owners may clamor for more and better workers, once local school district tries to fill the gap while giving students a broader range of career opportunities.
Jim Grieshaber, director of the Dysart Unified School District’s Career Technical Education program, said his culinary arts program is the most popular among students.
With four faculty (and a fifth coming on board soon) working in partnership with West-MEC’s Northwest campus in Surprise, they serve more than 600 culinary arts students at Valley Vista High School with jobs training and industry internships, he said.
“We’re working to make sure we get them industry ready,” Mr. Grieshaber said. “They get their food handlers card and we’re working to add other industry certifications in the near future.”
Students in the program progress through six training levels based on statewide curricula to learn restaurant management, knife skills and cooking techniques for various cuisines.
Advanced students learn pastry techniques and work catering gigs for numerous clients, including hosting luncheons and special events, such as the Rotary Club of Surprise’s upcoming Taste of Surprise event.
Beyond training and catering work, CTE students can apply for year-long internships to get real-world experience, Mr. Grieshaber said.
“The internships we have are based on what our community asks us for. Right now, we have kids working at Taco Bell and McDonalds and we just got a call from Nothing Bundt Cakes looking for an intern,” he said.
Other local partners include Sun Health and Benevilla; but while some have reached out, Mr. Grieshaber said he is surprised more local food service businesses have not gotten involved.
“We’ve not had a ton of interest from our industry for interns,” he said. “There’s no cost to the business — I just think it’s a lack of knowledge out there … it’s up to me to get the word out and I’m just one person.”
Other internship partners support a wide range of CTE offerings in the school district, with engineering and architecture students working for general contractor McCarthy, sports medicine students with the YMCA, and business and marketing students filling spots at Sun Health.
For students who do land a coveted internship, the work experience is invaluable; but the partnering businesses benefit by really getting to know some workers before making a hiring decision, Mr. Grieshaber said.
“It’s really a year-long job interview for businesses,” he said. “They get a whole year to see how they work and if they want to hire them,”
Mr. Grieshaber said he hopes more businesses will come on board to create job opportunities for his eager students in the future.