Jobs in New York: Why businesses are facing a worker shortage amid COVID-19

Mario Marroquin
New York State Team

Loosening COVID-19 restrictions across New York are bringing a measure of financial relief for businesses. Now they just have to find the workers. 

A combination of labor shortages across the state prior to the pandemic and enhanced unemployment benefits is now keeping some workers from looking for work, according to New York business owners struggling to fill jobs.

“When the [enhanced unemployment benefits] came out, it became kind of a different labor relationship with the employees,” said John Carr, owner of Adirondack Brewery in Lake George. 

“There were a lot of them that, not because they were afraid of COVID or anything, were just like, ‘Why go to work if I can stay home?’”

Andre "Tank" Arce of Binghamton at work at ECK Plastic Arts in Binghamton on Wednesday, May 5, 2021. Arce was hired through a temp agency but will soon be a full-time employee of ECK, as both he and ECK have been happy with the his work.

New York doled out billions of dollars in unemployment benefits to workers throughout the COVID-19 pandemic, mainly in the food, hotel and tourism industries. The state has yet to recover many of those jobs: New York is down 823,000 private jobs from the start of March 2020, according to the state Department of Labor.

While business owners across much of New York say job availabilities are increasing on a monthly basis, data from the Bureau of Labor Statistics shows the Northeast has seen the slowest rate of hiring this year.

According to the Department of Labor, New York saw an increase in private sector jobs of 67,300 in March.

However, the unemployment rate in the state (8.5%) was 2 percentage points above the national average (6%) that month and was the second highest unemployment rate in the country. 

While states like Florida and Texas have turned the corner and appear to have reached pre-pandemic levels of unemployment, New York has been one of the slowest states to recover from the pandemic.

Carr said he lost half of his over 100-person workforce in one year. And after briefly pivoting his brewery to manufacture hand sanitizer, he continues to have a hard time competing with enhanced unemployment benefits.

“I guess the one good part [of the worker shortage] is it's maybe putting a lot of wage pressure out there on employers to maintain higher wages,” he said. “The flip side of it is we're experiencing pretty aggressive inflation right now.”

Job fairs go virtual

Last month, the Greater Rochester Chamber of Commerce held a drive-thru job fair to try to fill 200 jobs.

Only four applicants showed up, according to Robert Duffy, the group's president and CEO and the state's former lieutenant governor.

"Nearly every business is struggling with finding workers," he tweeted. 

Job fair participation has varied across the state. 

Organizers of a Chemung-Schuyler-Steuben Workforce job fair held virtually April 29 said over 132 businesses participated with more than 3,000 job openings available, and over 660 job-seekers registered to attend.

"I think the 660 was a good amount of registrants," said Phyllis Balliett, the deputy director of Chemung-Schuyler-Steuben Workforce New York.

“I think we've seen an increase in numbers due to ease in being able to attend from your home."

In Tompkins County, a job fair was smaller, as it was held outside and in person. Around 15 businesses attended, and organizers said about 100 job-seekers showed up.

Brad Walworth, a representative for Cayuga Addiction Recovery Services, said there were fewer people than normal at a recent job fair the organization held.

"I have represented CARS at previous job fairs (before the pandemic), and would say (the) job fair on the Ithaca Commons received less people than we expected to see," Walworth said.

Walworth cited potential inclement weather as well as other factors for the potential decrease.

"With the increased use of virtual forums during the pandemic, along with changes in people's relation to tech overall, I am wondering if in-person job fairs are not as effective as they had been because of the increasing prevalence of virtual job fairs,” he said.

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Manufacturing and the pandemic

Brett Pennefeather, right, president of ECK Plastic Arts, on Wednesday, May 5, 2021. Despite competitive wages and benefits, the Binghamton company has had a difficult time recruiting qualified employees.

Brett Pennefeather, CEO of parts manufacturer ECK Plastic Arts in Binghamton, says despite his business being deemed essential at the onset of the pandemic and his company retaining workers, hiring during the pandemic has been difficult.

Pennefeather said he believes businesses in New York are competing with unemployment insurance benefits, which have been boosted by an additional $300 a week by the latest federal stimulus package through September.

However, he said the real issue has been about retention. 

“We've had issues like where temps come in to work ... they're there for one day, and things appear to be OK, then they have their 9:30 break the next day and we just don't hear from them and neither the temp agency or I can get a hold of them,” Pennefeather said.

“It's happened probably four or five times in the past six, seven months.”

Pennefeather said Eck Plastics offers cost of living raises every year and that the company has absorbed rising health insurance costs.  

However, the CEO said he expects it will take at least 45 days before he can fill three machine operator roles that start at around $31,000 per year.

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A new normal 

The exterior of the Cambria Hotels White Plains - Downtown, pictured May 4, 2021.

Sean Meade, general manager of the Cambria Hotel & Suites in downtown White Plains, contended it's a disservice to attribute the increased worker shortage to unemployment benefits.  

“People that were laid off, and furloughed, that was no fault of their own and to think that they don't want to come back to work because they're on unemployment might be a really small case,” Meade said.

“We’re finding that the same leisure demand that is filling our hotels right now ... that so too do people want to start getting back to work if they can.” 

Meade said that after cutting 49 out of 55 staffers at the hotel due to declines in business travel and overall uncertainty last spring, the hotel is now operating with over 20 full-time employees. But finding workers has only gotten tougher since then.

“The job market has always been tough in Westchester County as hoteliers,” Meade said. “We need to add value to our applicants.”

Across the state, restaurant owners have reported similar issues with attracting workers and retaining them as they begin to see restrictions lifted, with some even having to delay reopenings or cut down on hours opened to contend with their depleted labor force.

More:Yet another restaurant crisis: finding help. What that means for your dining experience

The big picture 

Brett Pennefeather, right, president of ECK Plastic Arts, jokes with an employee on Wednesday, May 5, 2021. Despite competitive wages and benefits, the Binghamton company has had a difficult time recruiting qualified employees.

Stacey Duncan, president of the Greater Binghamton Chamber of Commerce, and Gina Mintzer, executive director of the Lake George Regional Chamber of Commerce, agreed that last year has been a mixed experience with its workforces.

Duncan — who is also part of the Broome County Industrial Development Agency, the agency that negotiates tax incentives with private businesses — said the regional chamber's health care and small business members are looking to add workers.

However, finding the right candidate remains harder now than it has been in recent memory. 

"About 30% of our employment base is looking to add workforce," she said. "But the most significant challenge that they're having is finding the right individuals to be trained for a position." 

Duncan said that besides enhanced unemployment benefits, the outmigration of workers and the long-standing narrative that New York is losing workers may be playing a role in hiring shortages.

On the other hand, Mintzer said reservations for travelers and businesses are stronger than in 2019. 

And while employers were also forced to find new efficiencies due to the pandemic and the ongoing worker shortage, Mintzer said there may be a degree of mistrust in government among workers that is also keeping them from committing to a job that may be shut down again.

"There is a level of distrust and it's not even so much from the employer. It's to our elected officials; why was this industry deemed safe compared to another?" she said.

"We're still feeling the effects of that."

Mintzer said the Lake George area, like many parts of the state and the nation, is also being affected by a shortage of workers with J-1 student visas, a federal program that allows foreign workers to travel to the U.S. on an exchange basis.

President Donald Trump had put the program on hold for much of his presidency.

And while there is an expectation among business owners that more workers are coming back this year compared to 2020, she says the total number of workers on exchange visas is expected to be lower than in previous year.

"We have some employers who have been told their J-1 exchange students are coming, yet not in the numbers that the area has enjoyed in past years," she said. 

"In 2019, the Lake George Area hosted close to 1,000 J-1 International Exchange Students, which adds to the economic workforce."

MORE:NY economy lags across state despite signs of recovery. What's happening in your region

Includes reporting by Tom Passmore of the USA TODAY Network's Southern Tier newspapers.

Mario Marroquin covers real estate and economic development. Click here to see his latest stories. He can be reached at mmarroquin@gannett.com or @mars3vega