If you need a new job in Humboldt County, now is a great time to be on the hunt. Unfortunately for local employers, not nearly enough people are hunting.
The Starbucks on Fifth Street in Eureka, for example, has a sign offering a host of perks including a free college education via Arizona State University’s online program.
The labor shortage isn’t unique to Humboldt County; the trend has made national news. More than 11 million workers quit their jobs in recent months, according to the U.S. Department of Labor, sparking countless stories about what’s been dubbed the Great Resignation.
Shelley Nilsen, owner of local staffing firm Express Employment Professionals, said her business is struggling to find candidates who are ready to work.
“Recruiting is harder than it was before the pandemic started,” she said, “and it was hard then.”
The employee shortage is constricting businesses that might otherwise be enjoying a financial rebound.
“We’ve seen a lot of [businesses] adjusting hours because there are not enough employees to stay open as long as they’d like,” she said. “Businesses have plans for growth. They’ve got the business but not the staff to do it.”
She identified a number of contributing factors, including the public’s fear of contracting COVID-19, difficulty finding child care and the range of federal unemployment benefits available during the pandemic. Others have simply reassessed their work/life balance, and many members of the Baby Boom generation have decided to retire.
Plus, the pandemic prompted a revolution in remote work, allowing many local residents to find new jobs with out-of-the-area employers.
“You’re no longer bound by the Redwood Curtain,” Nilsen said. “As a business, your competitor is not just the guy right down the street. It’s the company in Sacramento that can offer better benefits.”
But if employers spend more on labor, they may be forced to raise prices, which can put them in a tough spot.
“A very real fear that businesses have is that when they raise prices, people will either shop online or balk [at the increase],” Nilsen said.
The employment landscape has changed in other ways, too. During the pandemic, Humboldt County’s unemployment rate ballooned from around four percent to a high of nearly 13 percent in May 2020. As of last month the rate had dropped back down to a historically reasonable 6.4 percent. However, that figure is a bit misleading because fewer people are even looking for work.
Since March 2020, when the shelter-in-place order took effect, the size of Humboldt County’s labor force has declined by more than five percent. That’s 3,200 people who simply left the local labor pool, whether due to retirement, fears of contracting the virus or some other reason.
“One big one is child care and school,” Nilsen said. “COVID has decimated a lot of our child care facilities.”
Kerry Venegas, executive director of the nonprofit Changing Tides Family Services, agreed that this is a major factor for many local workers.
“Child care is critically important for people being able to work,” she said. “It’s not always at the forefront of economic discussions, but the pandemic forced that into the light. A lot of times it’s considered the parents’ problem; right now it’s everyone’s problem.”
Venegas pointed to some numbers. Early last year, before the pandemic arrived in force, Humboldt County had 205 child care providers. By mid-August that number had shrunk to just 157, and last week 11 of those were temporarily closed for mandatory 10-day quarantines due to to possible COVID exposure.
Each of those closures, whether temporary or permanent, has a ripple effect in the community.
“The impact is large and immediate,” Venegas said. First, it affects the owners. Most child care facilities, both nationally and locally, are privately owned small businesses, often run out of people’s homes and serving five or six kids at a time, though larger ones can accommodate as many as 50 kids.
“When they close, even for a day, they lose all their revenue, and they’re already running on small margins,” Venegas said. Some of them simply can’t afford to reopen.
Then there’s the impacts to parents. A big chunk of child care costs in Humboldt County are paid with federal dollars in the form of vouchers available to income-eligible parents. These parents often don’t have a backup plan when their child care falls through.
“The bulk of families that are income-eligible are the same people who worked throughout the entire pandemic,” Venegas said. “They work at grocery stores, in the service industry, at gas stations. They can’t afford not to work, and they also need the child care. … Most of those folks literally can’t stay home.”
But when a child care facility closes unexpectedly, they may have no other choice.
Venegas sees an opportunity in this new labor landscape for employers looking to recruit new workers. Rather than offering their own in-house child care services, which can be expensive, time-consuming and challenging, business owners could purchase slots for their employees’ kids at existing child care facilities. “This would give the child care providers a steady and guaranteed income and employers reliable and high-quality child care,” Venegas said. Not to mention grateful employees.
A lot of local employers suggest that the dearth of job candidates can be tied people sitting at home, collecting unemployment benefits. Nilsen said she’s definitely seen evidence of that.
As soon as President Joe Biden passed a new stimulus package in March, extending unemployment benefits until early September, Express Employment Professionals saw a huge drop-off in applications and a simultaneous increase in no-shows at job interviews.
“Ghosting is always a thing, but it just became crickets,” Nilsen said. “People who applied the week before and said they really need work, they just stopped answering the phone.”
Four federal unemployment benefit programs are set to expire at the end of this week, and Nilsen is hopeful she’ll see an uptick in applications and interviewees.
So is Jaymi Dark, owner of Dark Staffing Solutions, an employment agency focused on the cannabis industry.
“We have people that are very open about it, [who] say they don’t want to go to work because it will interrupt their unemployment and they’re making more on unemployment than they ever made having a job,” Dark said.
Her own company has been inundated with unemployment claims, receiving between three and 15 per day — “and we have more jobs than we can fill,” she said. “That became a huge burden on our business because I essentially had to hire an entire person just to respond to the COVID epidemic paperwork.” And the wave of approved unemployment claims will cause her workers compensation insurance to skyrocket, she said.
The labor shortage has also hit the public sector, including Humboldt County government offices.
“Many county departments and divisions are struggling to fill positions right now,” Economic Development Director Scott Adair told the Outpost via email. He said the number of applicants for open positions is lower than in years past, making competition for workers fierce.
“This is good for workers, but can also be challenging for employers,” Adair said. “Even traditionally low-paying positions (take retail for example) are evolving. Fast food companies have responded to the shortage in labor by increasing wages, which now makes their places of employment directly competitive with office and trades jobs.”
That includes many government jobs, and Humboldt County Human Resources Director Linda Le said the county is feeling the effects of the Great Resignation. “In normal times, employees resigning or retiring in large numbers signals a healthy economy with plentiful jobs. However, the pandemic is not normal times,” Le said in an email.
Adair said the county is working with partner agencies and community stakeholders to address the labor problem, but those efforts are also hamstrung by the shortage in workers.
“Our programs run on human capital, and our greatest capital asset is our team,” Adair said. “But it takes workers to help workers. Therein lies the catch-22.”
Hospitality and restaurants
Jeff Durham, owner of the Redwood Riverwalk Hotel in Fortuna and a member of the Humboldt Lodging Alliance, said he has managed to sidestep the worst impacts of the Great Resignation by taking care of his employees. He has given them three raises since May of last year; he offers them interest-free loans of up to $500 for emergencies; and he gives them a range of perks.
“Moving forward, as owners and operators in hospitality, we need to look at how we can treat our biggest asset in the right way to ensure that this doesn’t happen again — because this is a reckoning for us,” he said. Durham downplayed the impact of $600 unemployment checks available through the federal CARES Act, saying employers need to focus on paying a living wage.
Nicholas Kohl, owner of Oberon Grill in Eureka, agreed. “The only reason I’m able to be open the limited hours I am is I have tremendous loyalty from my core staff,” he said. Like Durham, Kohl increased employee pay during the pandemic. “That was my way of recognizing my staff for sticking with me,” he said.
That’s not to say things have been easy for him. His business last year was just 30 percent of what it had been the year before, and he said this year he might make it to 50 percent. He has taken advantage of the Paycheck Protection Program and county assistance. “If there’s a program out there, I’ve accessed it,” he said.
He has also tried to lower costs wherever possible — for example, by exploring solar energy as a means of reducing his power bills and by negotiating for a lower workers compensation rate.
Even with increased wages, though, Kohl has lost employees — hence the limited hours for Oberon. “It’s been making receiving harder, getting mail harder — everything’s just harder,” he said. Hiring entry-level workers is a particular challenge. For one thing, fewer people are seeking work in the restaurant industry when the hours are so unpredictable.
“Also, I can’t take a risk on a person who’s not going to be as productive as they need to be,” Kohl said. In the past he might hire an HSU student just to see if they could host or wash dishes. But now, fewer students are even looking for work, and Kohl said he’d rather hold out for someone with years of experience, relevant training or personal references vouching for their reliability.
There’s one other key factor at play in Humboldt County in particular: Kohl said that when the shutdown hit, many of his kitchen staff took jobs in the cannabis industry.
“I know kitchen personnel were not paid well” pre-pandemic, Kohl said. “I get it. Tips were a big deal but so is stability. For cooks that’s big. It keeps ‘em going to have this routine. As soon as COVID broke, they took another job. And the pot market took most of it.” Some of his former cooks and other kitchen staffers are now trimming or delivering weed.
Dark is on the other end of that equation. “We’ve received an influx of people who are coming from the restaurant or service industry, and those people do very well in our industry,” she said. “Especially back-of-the-house workers, cooks.”
Dark also pointed out that the illicit side of the cannabis industry can facilitate unemployment fraud.
“It’s interesting, especially in our industry, how easy it is to collect unemployment checks and then work in the illicit market and collect cash payments,” she said. “We’re seeing and hearing about [that kind of] double dipping, and that’s hard to compete with.”
COVID’s current resurgence amid low vaccination rates and the more contagious delta variant has led some employers to require masks for unvaccinated workers and others to require proof of vaccination.
Dark’s agency asks applicants to check a box indicating whether they’ve been vaccinated or not, though she said she’s not sure how accurate that is. “Because at the end of the day, there are a lot of people that don’t want to wear a mask.” In other words, unvaccinated workers will pretend to be vaccinated in order to go maskless at work.
As for requiring proof of vaccination, Dark said most of her roughly 200 active employees — 65 percent in an informal company poll they recently conducted — said they’d be unwilling to work for an employer with a vaccine mandate.
Despite the current setbacks, Dark and others we spoke with for this story said they’re bullish on the future of Humboldt County’s economy.
“I mean, we’re booming here,” Dark said. “We do have a lot of jobs [available] … and we have good jobs, not just entry level positions that need to be filled. There’s a lot of upper management that needs to be filled, too.”
Kohl agreed. While he and other local employers are in crisis management mode right now, he’s excited about such prospects as the Nordic Aquaculture project on the peninsula, HSU’s transformation into a polytechnic institution and the development of offshore wind energy.
“There are so many great things just over the horizon,” he said. “Right now we still have to deal with what’s here.”