It’s crunch time on the Kenai Peninsula for businesses who need more employees before the summer tourist season. The problem is that a lot of them can’t find any.
Kathy Musick is the co-owner of Jersey Subs and manages the Soldotna location of the chain. She said she has barely received any applications for the estimated 20 open positions the sandwich shop needs to fill across its three locations before the summer.
Musick puts the blame on federal unemployment assistance, which she says allows workers to make more money than they would working at her business. She said one former employee told her that he was quitting because he could collect more in unemployment. Musick said some of them make more per week than she does.
“Honest to God, when you’re making $600 a week on top of unemployment are you going to go to work?” Musick said in an interview with the Clarion.
Terry Johnston, the owner of Firehouse BBQ in Soldotna, also said he has faced a labor shortage. He said he’s had to change his business model due to the circumstances. Firehouse has stopped serving breakfast, canceled its affiliation with DoorDash and is now open five days a week instead of seven.
Johnston has been active on his restaurant’s Facebook page, posting about business changes and job openings.
In one video he announced cutbacks on business hours. “I apologize for any inconvenience, but this was the only other step besides closing for good,” Johnston said to his Facebook followers.
Firehouse BBQ is now open from 11 a.m. to 7 p.m. Tuesday through Saturday.
In another Facebook video on May 8, he said he had to close shop because he couldn’t find anyone to work.
During an interview with the Clarion, Johnston said he can’t really think about business during the summer season yet. “I’m just looking at next week,” he said. “The government is killing us.”
Ideally Johnston would like to hire around 13 more people at Firehouse BBQ.
The normal unemployment benefit amount in Alaska is $370 per week plus $24 for each dependent, the dependent amount maximizing at three people, Patsy Westcott, director of the division of employment and training services at the state’s Department of Labor and Workforce Development, said.
The most Alaskans are usually granted through unemployment benefits is $442 per week, which is $1,768 per month or $21,216 annually. The poverty line for a four-person household in Alaska is $33,130 per year, according to the Department of Health and Social Services.
The minimum wage in Alaska is $10.34 per hour, which would total to $413.60 in a 40-hour workweek before withholding taxes.
Throughout the majority of the pandemic, Alaskans were given an additional $600 per week in unemployment benefits. Westcott said that in late December 2020 the pandemic unemployment benefits were reduced to $300 per week, on top of the normal $370 and $24 per dependent. On Friday, Tamika Ledbetter, the commissioner of the Alaska Department of Labor and Workforce Development, announced that the state will cease the weekly $300 supplemental pandemic unemployment compensation.
Many industries have suffered since pandemic began last year. A report from the state’s department of labor stated Alaska’s job losses “remain historically large.”
More than $1.2 billion of federal and state COVID relief benefits have been granted to Alaskans since March 2020, according to the state department of labor. There are currently 32,000 pandemic unemployment filers across all available programs.
The department, however, is investigating unemployment fraud of individuals alleged to have refused suitable work. Westcott said the department of labor is encouraging the employment community to report any potential unemployment fraud to the state.
“We’ve heard stories from around the state,” she said in an interview with the Clarion. “We want to know about it.”
Brian Miller, co-owner and manager at Soldotna Hardware, said finding new employees is “almost impossible” right now.
“Applications coming through the door have tapered off to a low point,” Miller said in an interview with the Clarion. He declined to provide the average pay rate, but said he offers “competitive wages.”
He has also decided not to extend business hours this summer because it’s not financially sustainable. Usually by now Soldotna Hardware would be open from 8 a.m. to 8 p.m., but Miller said he is only able to maintain his normal 9 a.m. to 6 p.m. business hours.
A lot of Miller’s employees who aren’t coming back are young seasonal workers who have been at Soldotna Hardware in the past. He is looking to fill cashier positions, as well as people for the warehouse and on the floor.
The employee shortage isn’t unique to the state or borough — it’s happening all across the country.
The Associated Press reported on Thursday that restaurants in some states are approaching pre-pandemic customer levels. Nationwide, employers were able to fill just 266,000 positions in April, out of the 8.2 million jobs that were available.
While some people may be staying home because of their ability to take in extra federal unemployment assistance, there may be other factors keeping workers home.
Some people are hesitant to return to work in industries where they have a higher risk of contracting COVID-19. Others have had to stay home with children who are in online school, the Associated Press reported last week.
Nationally, some businesses have responded to a worker shortage with higher wages. Amazon is just one of many companies that has boosted new-hire pay in an effort to find more employees. The tech giant is trying to add 75,000 employees, and has bumped up starting pay to $17 hourly with a $100 bonus for vaccinated individuals, the Associated Press reported last week.
Local business owners, however, continue to express frustration over the benefits. Chris Fallon, the Jersey Subs manager at the Kenai location, said he has emailed Alaska Sen. Lisa Murkowski requesting that she support legislation that cuts back on federal unemployment assistance.
“They’re getting paid too much money to stay home,” he said, emphasizing that when he moves to the Kasilof shop for the summer the Kenai location will be “in trouble.”