Help wanted: Labor shortage plagues Vestavia Hills businesses

If you drive around Vestavia Hills, seeing “Help Wanted” signs is not an uncommon sight these days. Businesses across the city are struggling to find employees and maintain pre-pandemic service levels, owners said.

“We’re looking for a lot of employees,” said David Dawoud, who owns nine Domino’s pizza stores. “It’s putting more pressure on our employees.”

Domino’s, like several restaurants that spoke to the Vestavia Voice, said it has increased its pay to attract more employees, and is doing all it can to meet customer’s needs, Dawoud said.

“Our service is still maintained, but not like it used to be,” he said. “It’s a lot of work.”

Ben Meadows, an assistant professor of economics at UAB, said there is a “mismatch” of the labor that is being supplied by the workforce and the labor demanded by employers. Meadows said he believes, though admitting it is his conjecture, that the pandemic altered the “risk plus costs plus benefits” balance for many workers who exited the market.

Dawoud, along with other business owners, said federal stimulus checks and expanded unemployment benefits did not help. Alabama Gov. Kay Ivey ended the extra $300 unemployment benefits effective June 19, while federal stimulus checks ended, at least for the time being, in late summer.

“We thought when Alabama lifted (unemployment benefits), we’d see people flocking in,” said Katherine McRee, who owns The Lili Pad in Cahaba Heights.

McRee said she’s had cases of people being hired who quit before they ever work their first shift.

“It just means my sister and I are working more hours than we ever have,” McRee said. “We’re wearing a lot more hats.”

Meadows said while many people might be tempted to blame federal benefits, that likely does not explain the situation in Alabama.

“While this is a common scapegoat for the current market, it is unlikely that this currently motivates the Alabama situation,” Meadows said. “For instance, current unemployment claims and initial unemployment claims are at their pre-pandemic levels. Even more important, pandemic unemployment assistance statewide claims have been at zero since July by design.”

The numbers back that up. Continued unemployment claims have fallen since late July in the state, according to the U.S. Employment and Training Administration, and the unemployment rate in Jefferson County in August 2021, the latest available data, was at 3.6%, down from 8.3% in August 2020, according to the Alabama Department of Labor.

In Vestavia Hills specifically, the unemployment rate in August 2021 was 2%, down from 3.8% in August 2020.

While unemployment claims are down, Meadows said the state’s labor participation rate, which was at 56.6% in August, the latest available data, is back at pandemic levels, meaning people aren’t filing for unemployment at rates seen during the height of the pandemic, but they also aren’t re-entering the labor force either.

“That suggests that something is holding folks from re-entering the labor market. It could be child care, health care responsibilities, or possibly a re-shuffling of the labor market,” Meadows said.

Lower staffing means less of an ability to serve customers, some owners said.

Jamie Black, owner-operator of the McDonald’s restaurant on U.S. 31 across from the Vestavia Hills City Center and president of Black Family Restaurants, said while the restaurant has not had to close early or close the drive-thru, it isn’t able to serve customers as well as it would like, and employees are not coming back to work after the pandemic.

“I don’t know where the labor force went,” Black said, adding her store has lost between six and 10 employees in the past 12 to 18 months.

Wages are up 10 to 11% across the board, a move that “had to” happen in order to keep the restaurant competitive with other employers, Black said.

McDonald’s also offers tuition assistance and is currently offering $500 bonuses after an employee works 500 hours. Entry-level employees start pay now at $12 or $13 an hour, Black said.

Having fewer workers than McDonald’s likes to have might impact the “fast” part of fast food, Black said.

“The customers may have to wait a little bit longer in the drive-thru line,” she said.

The restaurant is working to improve its mobile app, which should help customers place their order ahead of time.

McRee said her store has “competitive” pay, along with bonuses that come if employees hit monthly goals, which pushes average pay above $15 an hour. Bonuses have been given every month for at least eight months, McRee said.

“We’ve been really blessed with the staff we do have,” McRee said. “We haven’t had to cut operating hours.”

Staffing has also been a problem at Milo’s Restaurants, primarily in their ability to hire new employees and the issue of excessive absenteeism, CEO Tom Dekle said.

“Both are problematic, but the lack of dependability may be the biggest of all,” Dekle said. “When scheduled team members don’t show up for work, it throws off our entire service model, and it degrades our ability to give our loyal customers what we promise. Luckily, we have a lot of great employees that have been with us for many years, but overall, we need more and more reliable crew for our restaurants.”

Staffing issues also impact the supply chain, which in turn affects his restaurants, Dekle said.

“Our manufacturer of our most beloved lemon and peach pies decided abruptly that they were no longer going to make these pies,” Dekle said. “We have had to introduce temporary packaging because our partners are going through the exact same struggles we are, and production is lower than they need it to be to keep up with demand. Our distribution partners go day-to-day not knowing if enough of their drivers are going to show up as scheduled to make daily deliveries. We depend a lot on fresh products and just-in-time inventory, but our partners are struggling with the same labor-based issues.”

Dekle expressed concern with the Biden administration’s proposed mandatory vaccine mandate for businesses with 100 or more employees, which includes Milo’s.

“It shows how out of touch Washington is with the true labor struggles,” Dekle said. “We’ve talked about the serious current struggles, but if this mandate goes through, the hourly labor force will experience even more turmoil. The more labor turmoil – the more exponentially exaggerated the problems we discussed earlier will become.”

Dekle said inflation is here and will probably increase over the next 12 to 18 months, with prices increasing across the board.

“We have a long road ahead of us, however, with our substantially increased hourly pay rates and new retention programs, I am hopeful that we can continue to build a strong employee base that adopts the culture of the company and enjoys serving our customers,” Dekle said.

Pay is not the issue, Dekle said, citing another often-referenced solution to the problem.

“Distribution and transportation companies where drivers can make $100,000 a year are having issues with staffing,” Dekle said. “I do not think you can attribute the shortage to a lack of opportunity or low pay today.”

Meadows said raising wages is part of the solution, and is, at the moment, possibly the “only lever employers can pull.”

Dan Moran, owner of Rocky Ridge Hardware, said while private business does have to compete with the government, which he said is paying people to stay home, paying employees well means getting better employees.

“I’ve got a good crew; I pay them well,” Moran said. “You pay for what you get. … A $20-per-hour employee is going to give me a better person than a $14-per -our employee.”

The question business owners have to ask, Moran said, is “what’s peace of mind for an employee that works hard and works well?”

However, addressing wages won’t solve the deeper issues affecting the labor force, Meadows said.

“A more nuanced picture would reference the structural reasons that folks have not reentered the labor force,” he said. “Child care, health care and other barriers to entry to the labor force will have to be faced.”