LIMA — Complaints of a worker shortage briefly resurfaced this summer as companies began recalling their workforces and resumed recruitment efforts only to find few applicants responding to help wanted advertisements, despite double digit unemployment.
The complaints raise a question: Were displaced workers refusing to return to their old jobs because unemployment benefits were too high? Or were companies simply not offering enough money to entice those workers who were still hopeful their previous employer would call them back?
Michael Hicks, an economist and director of Ball State University’s Center for Business and Economic Research, said he’s not surprised workers on a temporary layoff would not respond to help wanted advertisements, particularly for low-wage jobs.
“If they’re finding a skills gap or a wage gap or an employment gap,” Hicks said, “they can always mitigate that by offering more money. And if they can’t afford that, then they have a business plan problem.”
Hicks said most worker shortage claims, are better understood as wage shortage claims, as some companies are reluctant to raise starting pay to stay competitive, even when unemployment is low.
But the ultimate test, Hicks said, will be when August unemployment data are released later this month.
“If that $600 mattered, then in about three weeks … there will be a huge jump in jobs,” he said. “All of this will have gone away, because the $600 is gone.”
Some companies and recruiting agencies have already changed their tune.
Nadia Lampton, an employment attorney representing manufacturers and others in the Dayton area, said her clients have seen a steady increase in their workforce since August. She attributed the change in part to the lapse in federal unemployment benefits.
“Arguably, employers could report to Ohio unemployment that those workers turned down work,” Lampton said, “but with the backlog of unemployment claims and the delay in processing those claims, it didn’t do anything for the employers immediately because those employees were still disincentivized … it’s not an immediate trigger to cut the benefit off.”
Likewise, Joe Patton, executive director of Ohio Means Jobs—Allen County, said he’s seen more participation in hiring events in the past month, with several companies like FedEx, SumiRiko and Bob Evans. The agency is getting ready to roll out a regional advertising campaign to recruit nurses, with some 200 nursing jobs available in the area.
But there are other complicating factors, like the uncertainty surrounding schools and childcare that has temporarily pushed some parents out of the workforce and forced companies to adopt work-from-home plans when possible.
“Most of my clients are taking it on a case by case basis,” Lampton said.
If an employee has exhausted all of their leave benefits, Lampton said, they might be eligible for a flexible work-from-home plan or alternative schedule. But employers can’t afford to have their entire workforce wiped out because schools are closed or employees are quarantined.
“There’s no easy answer,” she said.