Life won’t be easy for work-hungry US companies this summer

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Loading passengers onto the Giant Dipper, California’s oldest roller coaster and the main attraction of the Santa Cruz Beach Boardwalk, wasn’t what Karl Rice had envisioned spending his summer.

But Rice, whose family runs the amusement park in Northern California, started hiring workers later than usual after it reopened in April after a year-long shutdown sparked by the coronavirus pandemic. Of the approximately 1,900 employees who are needed for the busy summer season, he has only scratched about half of them so far.

The 114-year-old amusement park is buzzing with customers reveling in their freedom after the lockdown and with the season’s biggest-to-date crowds expected over the July 4th holiday weekend, “all hands on deck,” Rice said.

All executives are working at attractions or food stands at least once a week this summer, and Rice, the president of the boardwalk, does two eight-hour shifts a week, usually helping guests get on and off the Dipper, a historic roller coaster.

As the United States nears its Independence Day celebrations, which the Biden administration hoped would mark the country’s symbolic emergence from the pandemic, the economy is both back to normal and, as Rice’s experience shows, very far away from it.

The mask wearing and social distancing rules of the last 15 months are largely gone. Full sell-out at major league baseball stadiums and waiting lists for restaurants are back in fashion.

But there is such a thing as a speed limit for economic recovery. The $ 93 million in North American box office sales for the top 10 films last weekend was the best performance since Valentine’s Day in 2020, before the pandemic hit the crisis, according to IMDB.

“Who would have thought the reopening would be as difficult as it has been before?” Richmond Federal Reserve President Thomas Barkin said Monday as he enumerated just a few of the anomalies in the economy: theme parks limit their working hours because they cannot hire enough workers despite high unemployment; Car factories are slowing production due to supply bottlenecks in an era of record sales.

Because of production alone, the United States has recovered. According to the Atlanta Fed’s most recent estimate of the GDPNow model, the economy has surpassed its pre-pandemic level of $ 19.3 trillion. However, when it comes to jobs, there are still more than 7 million down the drain and it will likely be many months before something like a full recovery in the labor market is achieved.

Unusually for a recession, people have money to spend from an unusual source: the government. Ongoing unemployment insurance payments, the expansion of child tax breaks and other federal aid keep households fit. It is unclear when or whether private sector wages will fill the gap after the aid ends.

And consumers are spending. Spending on services – the lion’s share of household spending which makes up 70% of the economy – has increased, especially in recent weeks. Many restaurants are overcrowded and the owners complain of difficulties in setting them up.

But the entire leisure and hospitality industry is still missing 15% of the jobs it had before the pandemic. In contrast, finance jobs have virtually returned to normal at just over 99% of pre-pandemic levels.

As the number of new COVID-19 infections declines in the United States, people are eating out and sitting back to pre-pandemic levels, data from OpenTable shows.

Business at Farley’s, a coffee shop in San Francisco, is brisk; Sales are around 70% of pre-pandemic levels but are expected to increase in July once co-owners Amy and Chris Hillyard hire enough staff to reintroduce pre-pandemic hours. At their larger facility, Farley’s East in downtown Oakland, sales are only about 40% of pre-pandemic levels.

Chris Hillyard is expecting a surge next week after Bay Area Rapid Transit employees resume work three days a week at their Oakland headquarters around the corner from Farley’s east, but he predicts monthly losses through the fall if he does hopes more office workers will return.

U.S. air traffic has steadily declined but is only around 75% of 2019 levels, largely due to the slow recovery in international and business travel. TripActions, a travel management company, said air, land and hotel bookings have more than quadrupled since early 2021, but were only 60% of pre-pandemic levels. International business travel is 18%.

The job market is anything but normal.

Although there are several million more unemployed than before the pandemic, US companies are also reporting a record number of job vacancies. Corporations want workers, and workers are quitting their jobs in large numbers, presumably to take others who are more rewarding. But net employment growth has been slow compared to the numbers needed to return to pre-pandemic levels.

Governors in Republican-run states have attributed the sluggish job-to-worker match to enriched federal unemployment benefits, which they believe are encouraging people to stay home, and have decided to cut those extra payments.

William Spriggs, an economics professor at Howard University and chief economist on the AFL-CIO working group, suggested a different explanation: Skilled workers in industries that are slower to recover are waiting to resume careers and are not feeling compelled to take on an upcoming job .

Commercial workers in the entertainment industry, he said, “don’t want to work at McDonald’s,” but wait for Broadway shows, live concerts and film production to resume. Analysts who assume that the unemployed can be compared one-to-one with the current vacancies “are off the mark compared to the market”.

On the boardwalk, the pandemic shutdown and lack of large advance notice of the reopening resulted in seasonal adjustments starting months later than usual that year. When this was the case, competition for workers was fierce as all local businesses were up at the same time.

Applicants rose after the park offered a $ 300 bonus every two weeks for those who worked 30 hours or more per week, said Sabra Reyes, boardwalk director of human resources. The limiting factor now is how quickly they can train and attract new employees for their jobs.

“We are in full swing,” said Reyes, who oversees the amusement park’s cave train ride each week. “But it was and still is a fight.”

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