$15/Hour Wage, Tuition, Hoagies: How Employers are Attracting New Hires
As retailers and businesses struggle to hire employees, they're offering all kinds of incentives from cash to tuition to free meals as they staff up for summer.
Many are even getting a head start on New Jersey's minimum wage law, not set to take effect for a few years, by raising their minimum wages to $15 an hour or more.
The challenge of new hires led Tim McLoone, owner of the McLoone Family of Restaurants, to increase wages to $15 per hour for his non-tipped "back of the house" employees like dishwashers, prep cooks and hosts after an increase to $13 earlier this year.
"We were asking a lot of them and they were making $12 an hour, which is not a living wage. So we went to $13. Our plan was to go to $14 in May and then $15 in June. What wound up happening was this strain of finding enough labor I was like 'the heck with it, let's do it now,'" McLoone told the Townsquare News Network.
McLoone was able to use some federal Paycheck Protection Program money to increase the wages.
"The words 'trickle down' never work. Maybe we can trickle ours down a little. We got some substantial support from the government so let's let the people who make the least amount of money get some of it," McLoone said.
Servers are not affected by the increase but said they have been well tipped during the pandemic by customers.
"The customers have been wonderful particularly last summer when they were over tipping. In many cases people who never tipped 20% before were doing 20,25,30%. Random people would do random acts of kindness. If they had a $50 check they'd leave a $50 tip," McLoone said.
Workers don't want to give up unemployment benefits
Many employers blame unemployment benefits that continue to get extended, along with weekly bonuses of $300 through early September. But McLoone has another theory on why it's become tough to hire new employees: everyone's hiring from the same pool.
"People who are cleaning houses. Baby sitters make $20 per hour in a lot of cases. The race tracks are open and they hire a lot of people. People doing lawn maintenance and construction. Have you ever seen as many buildings being constructed or under rehab construction in your lifetime? There's just a lot of other areas that people can go to for employment," McLoone said.
McLoone says that he believes that in the long run that he'll be OK once college students come home for the summer. He said some colleges pushed off their final day of classes until later in June meaning students are not available until early June.
New Jersey's minimum wage law
The increase to $15 per hour by McLoone comes three years ahead of an increase required by a law Gov. Phil Murphy signed in December 2019. The minimum wage increased to $12 per hour on Jan. 1 over the objections of the New Jersey Business & Industry Association, which wanted Murphy to delay the increases from taking effect until the pandemic state of emergency was lifted.
NJBIA CEO Michele Siekerka told us she is hearing from a wide variety of businesses about the struggles they are having with hiring for the summer without offering incentives or higher wages that are better than the enhanced unemployment benefits.
"Be it restaurant, seasonal, manufacturing, logistics, truck drivers, it is across the board. It is not just industry specific. Of course our priority attention right now is to shore up our tourism season because of all the money that rolls back to the state because of that and because it's only a season. We have to make sure we can support that season after a tough year last year," Siekerka said.
Violating labor laws; qualifying for seasonal unemployment
Siekerka said members are telling her employers are also telling her that some potential hires will accept a job only if they are paid under the table.
"That's an exception to the rule and I don't want to say a lot of people out there looking to violate the rules. But the challenge right now is getting people to come back to work because the $300 extra enhancement with unemployment is attractive for people to stay home and take a skip," Siekerka said.
People who arrange for a job interview and then don't show up are also a big part of the problem, according to Siekerka, who said employers can help solve the issue by reporting the no-shows to unemployment.
"We never ever want to take money away from people who are truly in need of unemployment insurance. But when you have people who are passing on the opportunity to come back to work and stay on unemployment our system can't afford that and our economy can't afford that if we don't get people back to work," Siekerka said.
Siekerka said Morey's Pier in Wildwood also had to increase their hourly wage for some despite "hurting significantly" to attract a workforce for the season despite a tight financial situation. Some businesses already hurting are having to use their own personal savings and take the calculated risk that the investment will pay off.
"Remember they've been at limited capacity if at all able to operate over the past year. We're down 33% in small business across the state of New Jersey. We're the highest unemployment in the nation and we have businesses not turning revenue in order to reinvest in their companies," Siekerka said.
"Let's not think that New Jersey businesses are rolling in dough right now," Siekerka said.
She also has a message for seasonal workers who are taking the unemployment over a job.
"People who work during the season and are then eligible for unemployment in the off season have to work at least 20 weeks to be eligible once the season is over. They don't clock those 20 weeks they're going to be ineligible for their unemployment," Siekerka said.
Prices going up for consumers
Murphy during his coronavirus briefing on Wednesday said he expected McLoone and other restaurants forced to increase wages to pass on some of the cost to customers.
"My guess is in fairness that they'll pass that on so the burger's gonna be an extra fifty cents or 75 cents more and that's probably a reality right now. Some amount of inflation feels inevitable," Murphy said.
The governor said that indications are people are "overwhelmingly" doing the right thing when it comes to collecting unemployment versus finding work.
"When we get the American Rescue Plan guidance a lot of that money is going to go into restaurants, bars, hospitality and small businesses," Murphy said.
It's not just seasonal employers who are hurting for a workforce.
Walmart, which said it employs over 22,000 people in New Jersey at 70 retail locations and two distribution centers, has signs in its stores offering incentives for job seekers but would not say if it was because of a problem with hiring.
"It is very important to understand that Walmart offers careers, not just jobs because we’re investing in our associates’ long-term success through a combination of wages, benefits, training and creating a ladder of opportunity. We will continue to invest in our associates to help them gain experience, reach their goals, and build careers at Walmart," the company said in a written statement.
"In February, we announced raises for the 425,000 digital and stocking associates across the U.S. – these are our two fastest growing roles and they are important to the future of retail because they support a great pickup, delivery, and in-store experience which is how customers want to shop. The starting wage for digital and stocking associates now range between $13 - $19 an hour. To be clear, these roles have a starting pay up to $19 an hour."
Wawa is another employer that offered incentives to potential new hires during its first hiring campaign of the year with a goal of hiring 5,000 new workers. The drive has been especially noticeable in stores with flyers in the windows, on the door and inside the store but did not say if the push was because of difficulties in hiring.
"While we are working hard to find candidates, our hiring continues to be strong as we are working diligently to grow the Wawa family right now. Our current hiring incentives include a $500 new hire bonus for most positions and a $300 incentive for the COVID-19 vaccine as well as a bonus of $500 for current associates who refer candidates who we subsequently hire," spokeswoman Lori Bruce told New Jersey 101.5.
Wawa employees are also being enticed with promise of hot or cold hoagie during their shift, a discounted menu and tuition reimbursement.