Strong February job growth for economy, but Main Street struggles

A “hiring in progress” sign is displayed in the window of a restaurant in Los Angeles, California, January 28, 2022.

Frederic J. Brown | AFP | Getty Images

The latest non-farm payrolls report shows a labor market close to a recovery to pre-pandemic levels, but small business owners across the United States say finding and keeping qualified employees remains the one of their biggest challenges.

February job growth posted its biggest monthly increase since July, with nonfarm payrolls for the month up 678,000 and the unemployment rate at 3.8%, its lowest level since before the pandemic , the Department of Labor’s Bureau of Labor Statistics reported Friday.

In 2021, 6.665 million jobs were added in the United States, a figure noted by President Joe Biden in this week’s State of the Union address as the largest single-year gain in the country. American history. With the rebound, the labor market is short of about one million (1.14 million) employed workers compared to pre-pandemic levels, but there is still a big gap to fill vacancies, which s amounted to more than 10 million at the end of last year.

Main Street is an area where this labor struggle persists. In February, businesses with 500 or more workers added 552,000 positions, according to ADP’s private payroll report released earlier this week. This was responsible for nearly all of the job gains tracked by ADP, while companies with fewer than 50 employees saw a loss of 96,000 employees during the month.

Fifty-two percent of all small business owners said it has become harder to find qualified people to hire compared to a year ago, according to a recent CNBC/SurveyMonkey survey of small businesses covering the first quarter of 2022. This is up from 50% in the fourth quarter of 2021.

Twenty-nine percent of small business owners also said they had positions open for at least three months that they were unable to fill, and 77% of small businesses with more than 50 employees said they expect that revenue will likely be a problem for their business in six months.

Struggles to find workers

“Every data point from every possible source we have on the economy right now indicates we’re in an incredibly tough hiring market,” said Laura Wronski, senior science research manager at SurveyMonkey, which conducts the investigation for CNBC. “Unemployment is low but inflation is high, so wages need to be high to attract workers.”

The latest nonfarm payrolls report shows a slowdown in high wage inflation, with wages rising just 1 cent an hour, or 0.03%, from estimates of a gain of 0 .5%. The year-over-year increase was 5.1%, well below expectations of 5.8%.

Wronski said that while there has been an influx of newly eligible workers seeking new jobs amid the “big quit,” “it hasn’t gotten any easier for small businesses to hire.”

The latest data from the NFIB’s Monthly Jobs Report in February showed that 22% of small business owners said the quality of labor was their biggest business issue, and the percentage who cited labor costs as the main trade problem remained near a recent high of 48 years.

Jennifer Park, owner of WearEver Jewelry in Alexandria, Va., said she’s been challenged not only to find qualified employees, but also to keep those she hires.

After an employee quit her job to care for her child in July, Park said she posted a job posting on SimpleHired, which only brought her 21 applicants over a two-month period. While she hired someone from this process, that person quit three weeks after starting without notice, leaving her at the starting point. She also hired someone who worked for about two weeks but then tested positive for Covid-19 and subsequently withdrew, and several candidates simply failed to show up for scheduled interviews.

“It takes a lot of time to find people, a lot of time and money to train them, do background checks and really show them how to do this job,” Park said. “It’s just super frustrating.”

Park said she thinks a few factors explain why it’s been so difficult to find new employees, one of them being that many workers, especially women, have to stay home to care for children. .

Recent research from the National Women’s Law Center suggested that there were nearly 1.1 million fewer women in the workforce in February 2022 compared to 2020, while men recovered all of their job losses. since the start of the pandemic, a gap that is compounded by childcare issues.

“We don’t even get those kind of applicants because if they have young children they either had someone to take care of them or they didn’t have a school to send them to,” he said. said Park.

She also noted the realities of working in a retail environment for a small business, which often requires weekend work, as being “lower on the rung” compared to other jobs out there.

While Park said she has tried to increase the benefits she offers and increased opportunities for things like sales commissions, she also faces the same challenges as almost every other company in terms of increasing costs and supply chain issues that limit what it can do.

Learn more about CNBC’s Small Business Playbook

Didier Trinh, director of policy and policy impact at the progressive small business group Main Street Alliance, said that even given some government measures such as the US bailout, many small businesses are still struggling financially. .

“Despite the fact that small businesses have repeatedly shown that they are resilient and able to adapt to very rapidly changing circumstances, they are far from reaching the level of profitability they had before the pandemic” , did he declare.

Declining role attractiveness

Leisure and hospitality led job gains in February, adding 179,000 jobs for the month, but Main Street employers remained challenged to find the workers they need.

Marie Raboin, co-founder of Brix Cider in Mount Horeb, Wisconsin, said that for her 20-person company, part of the challenge was attracting people into the restaurant and catering industry as opportunities in other industries have expanded.

“I think service industry workers were able to go and get 9-to-5 jobs that paid as well as they did in the service industry, and they got nights and weekends off and benefits,” she said. “I don’t blame them, I don’t blame anyone for doing this and I get it.”

Raboin raised salaries and sought to offer other perks like free yoga classes at a local studio, but that didn’t lead to an influx of new applicants. Recently, she says, she received a job application that was posted for three weeks.

“We find that turnover is costing us more money than if we had to just suck and work many more hours,” she said. “We are prepared to be more patient than just hiring to hire.”

Raboin said she expects hiring to be difficult for the foreseeable future, especially in her industry, especially as larger companies in other industries offer more and more potential workers.

“As the economy grew in various specific sectors, people were able to find better jobs,” she said. “My mum was a waitress and my dad was a bartender, those were really good paying jobs in the 80s and you could raise a family on that, but things didn’t get better for those people.

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