HIGH COUNTRY — To say that summertime in the High Country is one the most important times of the year for the local economy would be an understatement. However, as the summer season looms, many businesses are experiencing an alarming shortage in the available workforce.
Melissa Appleby, who owns and operates Absolute Comfort Hot Tub and Pool Repair alongside her husband, Dave, is one of the numerous High Country business owners who is looking for individuals willing and able to work. Appleby says that the difficulty in hiring new employees has persisted over the past year.
“Last year at this time we had seven people on staff, and as soon as Covid broke out it slowly dwindled away. You just couldn’t hire anybody because everybody’s drawing unemployment. If they’re drawing $1,000 a week, why would they work for us, you know? I’ve talked to electricians, plumbers and other types of service businesses and it’s the same thing. They can’t get any help. It’s ridiculous,” Appleby said.
Melissa and David serve more than 100 customers a week by performing maintenance work and balancing chemicals for hot tubs, saunas and pools, although staffing shortages have forced the business to cut back on its services. The couple’s staff now consists of themselves and their son, whom the family is working on sending off to college, and a cousin who is employed part-time.
“We’re down to bare bones. We basically have three people trying to keep the company afloat,” Appleby said. “We just got flooded with so many people in this area so fast, there’s more people that need services than there are people who are willing to work.”
The sentiment is mutually shared by businesses who serve the housing industry as well. Allen Jenkins, who owns and operates Jenkins Construction, says the number of employees at his business has dwindled over the past year, as generous unemployment benefits have incentivized people to stay home.
“I have three employees still out on Covid-19 checks right now. I think the problem is not the shortage of people but the shortage of people willing to come to work when they can sit at home and get free money. I definitely need 10 more guys right now, and I’m stuck with six,” Jenkins said.
Jenkins Construction specializes in residential construction, such as home repairs, remodels, room additions, windows, doors, deck and other general construction, yet the labor shortage has the business cutting back on projects for commercial construction. Moreover, the influx of new homeowners and residents in the area over the past year has placed an added strain on contractors since there are not enough workers to fulfill the demand for home repairs and other services.
“I’m turning people down,” Jenkins said. “We’re booked up until the end of the year already, but that depends on how many people I can hire. Everybody is moving up to the High Country to get out of the city, and they come up here wanting to remodel their houses or add on to their houses. The last two years have been the busiest years since the building boom in ’04 and ’05.”
In the restaurant industry, labor shortages have had to close local businesses. At times in the past year, fast food chains such as the Burger King in Boone, Bojangles in Boone on US 421 and the Hardee’s in Newland closed for short periods due to staff leaving to go on unemployment.
Darrin King, owner of the Western Sizzlin restaurant on Hwy. 226 in Spruce Pine, depicted a similar scenario at his business, as employees left or refused to come back to work in order to continue collecting unemployment.
“That’s what’s killing us, the unemployment and people taking advantage of it. That’s what’s hurting us, and it’s just the beginning. It’s going to get worse going into (summer),” King said. “Before the pandemic, we had 54 employees a year ago and now we’re running on 36. The sad part is I’ve lost a ton of servers and they make more than anyone in the restaurant, which makes absolutely no sense. For a four- or five-hour shift max, they’re making over $200, which is just unbelievable that you can’t find anyone. I guess people just don’t want to work face-to-face with people at the moment.”
King said that his business has been inundated with to-go orders, which has caused sales to increase dramatically and the business to be busier than ever, despite the pandemic.
“Our sales were actually up over March of 2019, which was a record March and we were up 28 percent this past March. Even with 50-percent capacity, our sales have been skyrocketing, and that’s everything we could do with almost half the staff. (To-go orders) are up 75 percent of what they used to be. It used to take two or three, but now it’s requiring five people in the kitchen, but you just can’t find enough people to fill the positions,” King said.
The labor shortage is not simply relegated to the High Country, but persists across the state. According to the North Carolina Department of Commerce, the most up-to-date figures show that unemployment is down to 5.7 percent as of February 2021 after having reached a high of 13.5 percent at the onset of the pandemic in April of 2020. For comparison, the unemployment rate the previous February was at 3.4 percent.
However, the rate of unemployment claims may provide a better indicator of the state’s labor situation. From March 15, 2020 to April 19, 2021, a total of 3,611,763 unemployment claims have been filed, which equals about 1,486,984 people filing these claims since a claimant may file multiple claims to receive benefits from various unemployment programs. Out of the number of people who have filed claims, 66 percent, or 983,165 people, have received payments, while the remaining 32 percent, or 484,222 people, were denied eligibility. For comparison, total employment for the state was at just less than 4 million in 2019, according to the US Census Bureau.
In total, North Carolinians have received more than $11 billion in unemployment payments as of April 23, with $6 billion coming from federal pandemic unemployment compensation. Federal funds were mostly made up of the $600 that people on unemployment received through the CARES Act each week.
Currently, the weekly federal allotment for those on unemployment is $300, which was made available through the American Rescue Plan and is set to expire on September 6. Moreover, the maximum weekly benefit amount in North Carolina is $350, meaning that as it currently stands, someone could be making up to $650 on unemployment each week. For comparison, a worker who makes $15 an hour and works full-time makes $600 a week before taxes. It is also worth noting that other pandemic unemployment programs, such as Mixed Earner Unemployment Compensation, the Increased Benefit Amount and the Lost Wages Assistance programs, all expired by the end of last year. These programs provided between $50 and $300 in additional weekly unemployment compensation.
The copious unemployment benefits were enacted to provide for those who lost their jobs due to the pandemic, as well as to encourage people to stay home and not spread the virus. However, with 38.1 percent of the state’s population at least partially vaccinated and 29.9 percent fully vaccinated and increasing each week (according to the North Carolina Department of Health and Human Services), there will come a point when the presence of the virus may no longer justify the government to pay people to stay home.
Gov. Roy Cooper and the General Assembly have already begun to act with this reality in mind, although recent measures will likely not do enough to motivate workers to return to their jobs. At the beginning of March, Gov. Cooper signed an executive order that established a “flexible” work search requirement for all new claimants who apply for unemployment benefits on or after March 14. Additionally, in Gov. Cooper’s budget, which he revealed in February, he called for the maximum duration of benefits to be increased to 26 weeks, as well as the maximum benefit to be increased from $350 to $500.
Nevertheless, it is not only Democrats who are pushing for an extension to unemployment benefits after 72 percent of those age 65 years and older, the population most vulnerable to COVID-19, have been fully vaccinated. A bill introduced by Republican Senator Chuck Edwards (Hendersonville) and signed into law by Gov. Cooper in late March allowed for back-to-back extended benefit periods for unemployment claims in 2021.
In spite of these actions, Appleby points out that the particular position that she has been struggling to hire for is not one in which employees are likely to be exposed to someone with the virus.
“The best thing about most of these jobs is that they’re outdoor jobs. People don’t have to have contact with people. What’s going on right now is people not wanting to work. Period,” Appleby said. “Unemployment is killing small businesses, killing it because you can’t get anyone to work. They’re opening a Bojangles in Newland, and I’m interested to see if they can even get enough staff to get it going.”
While unemployment provides a temporary fix to an economic problem, those on unemployment, as well as politicians who advocate for the expansion of government benefits for political purposes, typically do not take into account the money that low-skilled and entry-level workers miss out on in the future by choosing not to work for a year or more. As Economist Thomas Sowell describes in his work “Economic Facts and Fallacies,” people do not tend to remain in particular income brackets throughout their lives. In fact, less than one percent of the US population permanently remains in the bottom 20 percent of income earners throughout the duration of their lives. Instead, income tends to increase with age and experience.
Appleby points out how this principle works in her own profession.
“The learning experience more than anything gives them opportunity to learn this area, for one, because you have to drive to all these different houses to do the services. If they want to start their own business as an electrician or a plumber or whatever, then they’ll know the area. They’ll learn it firsthand,” Appleby explained. “David would be good at teaching them electrical work or plumbing as long as they’re willing to learn. A lot of the high schools right now are pushing labor-type jobs, electrician, plumber, carpentry, because you can name your price right now. If you’re a kid graduating from high school and you get in under an electrician or a plumber and get your license, you can go out on your own and name your price.”
Jenkins pointed out that similar opportunities can also be found in the construction business.
“We pay time-and-a-half for overtime, five paid holidays a year, competitive pay based on experience and we’re training people. We don’t care if they have experience, as long as they’re willing to work,” Jenkins said.
Lastly, Appleby shared a worst-case-scenario related to the unemployment situation and how some people have gone about attempting to abuse the system.
“(We had one employee) who as soon as Covid-19 broke out went and filed unemployment, saying that we didn’t have work, and our work increased 33 percent when Covid-19 broke out, because we got flooded with people to the area. (The employee) lied about his income, so he’s having to pay back all the unemployment he drawed,” Appleby said. “He drew $15,000 in 16 weeks.”