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It has become common to visit a restaurant, gym, hotel or car care center and read a handmade sign stating that due to a shortage of staff, the facility will be only able to be in operation for a limited number of hours. The labor shortage is widespread throughout the country, including in our state of Minnesota where I operate three Subway restaurants. Without comprehensive legislative solutions, many small-business owners will be forced to close.
The labor force in Minnesota has not fully recovered to reach pre-pandemic levels, and for those who own franchises, it’s no different. “Across the first seven months of 2021, the state’s labor force declined by 2.9% in comparison to the first seven months of 2020, a loss of nearly 90,000 workers,” according to a report from the Minnesota Department of Employment and Economic Development. “Data show that every region [in the state] has a smaller labor force than one year ago … . Jobs are available, but so far, the workers to fill them are not.”
Even in strong economic times the scarcity of available jobseekers is a long-term issue, and it has only been exacerbated by the pandemic. Since 2020, I have seen a 20 to 25% reduction total in staffing from my stores. Some of my employees have resigned out of fear of COVID and its variants; others would rather receive unemployment compensation than return to work. In fact, several former employees told me they can make more on unemployment and, in some instances, they will have made more than through a full-time job.
Projections made prior to the pandemic show that the long-term forecast of Minnesota’s labor force is expected to slow even more, down to an average of only about 7,500 new workers per year over this decade. Clearly, the effects of the pandemic may decrease that number even further.
In these unprecedented times, small-business owners like me are doing everything possible to support our businesses. For example, I have raised my hourly salary from $11 up to $14 per hour. Depending on performance, some of my team members do make more. From my estimates, the raise is an increase of 30% and, in some cases, nearly 50%. Still, I am finding it difficult to fully staff my restaurants.
A recent study cited by MinnPost showed that the state’s labor force participation rate — “which measures the percent of the population age 16 and up that is working statewide — has dropped from more than 70% pre-pandemic to 67.9% in September. That’s the lowest it’s been since the late ’70s when fewer women were in the workforce.”
When I plan for 2022, I am concerned that the labor shortage is unsustainable, ultimately causing small-business owners to close their doors for good. Without solid federal policy solutions that would increase the workforce, many small businesses will continue to suffer. Changes to immigration policies, tax incentives for both individuals and businesses to promote employment, and less costly government regulation will help spur the economy and put people back to work. As a constituent, business owner and job creator, I call on Minnesota’s legislators to support us and create long-term solutions to get people back to work.
Bill Mathis is a Subway franchisee owner and board member of the Coalition of the Franchisee Association. He lives in Breezy Point, Minn.