Lincoln County business owners have struggled to find the necessary workers to keep up with a busy tourist season this summer, and that trend may be indicative of a greater statewide labor shortage.
While the pandemic and its restrictions have taken their toll on Oregon’s workforce, it’s also exacerbated many existing problems that have been mounting for years, in Lincoln County and beyond.
According to a QualityInfo.org report by state economic analysts Josh Lehner and Gail Krumenauer, and information from regional economist Erik Knoder, there are three major factors that have had the greatest impact on Lincoln County’s workforce, two of which may be alleviated starting this week.
“The labor market of the spring and summer have been super tight and still are, and ultimately it comes down to a combination of many participation issues,” Knoder said. “That includes expanded unemployment benefits, child care and housing.”
QualityInfo.org is the state’s data site for all things related to employment, including data and reports related to the pandemic and how unemployment over the last year has measured up to other major events like the 2008 recession.
Most individuals who lost their jobs for reasons related to the pandemic qualified for federal unemployment benefits, which throughout the last year, were expanded and lengthened for many. However, as of Sept. 4, the federal unemployment benefits have been discontinued.
Oregon unemployment payments averaged roughly $370 a week and with the addition of $300 a week from federal pandemic unemployment benefits, that amount brought in more than what most people working full time at a $16.75 hourly rate would earn. Those on benefits were required to actively seek work and would lose said benefits if they turned down reasonable offers.
The county’s last reported unemployment rate was 7 percent, a total of 1,538 individuals, in July. That number is notably higher than July 2018’s unemployment rate of 4.2 percent, but far lower than July 2020’s unemployment rate of 14.1 percent during the height of the initial pandemic shutdown. Unemployment peaked in the county at 23.7 percent in April 2020.
With a glut of open positions and employers raising their offered wages, however, experts argue benefits would have a much smaller effect on the amount of workers available than one might expect.
“With ‘Now Hiring’ signs in many business windows and stronger wage offerings as employers compete for available workers, it’s unlikely that this benefit, in itself, is keeping a vast number of workers on the sidelines,” the QualityInfo report reads.
According to WorkSource Oregon’s Newport office, Lincoln County has also seen a 10 percent wage increase over the last six months in part due to the unemployment rate, bringing it close to an average $16 per hour.
Federal benefits were also offered to the self-employed during the pandemic, which skews the numbers significantly as those individuals are unlikely to re-enter the job market as regular workers, according to Knoder.
“I have a friend, for example, who is a self-employed business owner and has been for several years,” Knoder said. “It’s unlikely she’s going to drop what she’s been working on for these years to go work as someone’s employee.”
Another major contributor that will be alleviated was the lack of in-person schooling that kept children across the state at home last year. In Lincoln County, the new school year begins this week for most, meaning some parents who have been preoccupied with child care may now be free to work.
That only partly solves the issue, however, as parents with children not old enough for school are still facing issues finding child care, a pre-pandemic issue that has only been exacerbated by COVID restrictions.
According to a 2019 study by Oregon State University, Lincoln County was a “child care desert,” with only 428 open child care slots for children up to age 5, less than a quarter of the child population at 22 percent. Any county with less than 33 percent is considered a child care desert. Due to COVID restrictions, Lincoln County’s available child care slots are expected to have declined significantly as well.
“Many daycares shut completely, and those that didn’t have severely reduced capacity,” Knoder said. “A lot of others just went out of business during this time.”
Affordable housing has been an issue in Lincoln County since long before the pandemic, and the last year has only added to the county’s housing difficulties.
Knoder said many business owners in the area have said their employees have been “priced out” of the area, and without a place to live, they’re also unable to work.
The county acknowledged these issues in its 2019 housing development plan, as well as several possible contributing factors, such the cost to build on the coast and the increasing amount of vacation rental properties in the county.
“We have heard repeatedly that there is a need across all types and prices of housing in Lincoln County,” Lincoln County’s 2019 housing plan reads. “Many interviewees noted that the market tends to take care of housing at the upper end, while workforce housing at or below $250,000 for a home is sorely needed. Low achievable rents mean that multifamily housing is particularly unlikely to be built without subsidy, and there has been very little apartment construction in Lincoln County in recent decades.”
The county and several cities within it have been working to address the issue over the last year, with new housing project proposals underway in Toledo and Lincoln City, to name a few. But at best, many of those projects would be several years out.
Some business owners are taking to housing their workforce themselves, but in such a competitive housing market with incentives to rent at more lucrative rates, such as a vacation rental, it may not be the most profitable course of action for many business owners to take.
“I spoke with a business owner in the county about how the high cost of housing drove out two of his employees,” Knoder said. “As a vacation rental owner, he then let one of his employees rent the house, but as the economy began to reopen, he also wanted to move them out to reconvert the property to a vacation rental.”
Knoder expects the labor market to remain tight for the foreseeable future, despite the end of federal unemployment benefits and the return of in-person schooling this week. He added that September is usually the beginning of a slow hiring season that often lasts through winter until spring.
The slow season may curb any significant gains from unemployment ending and school resuming, but Knoder says there is a possibility that many employers will hire and retain employees over the winter, possibly to prepare for next summer.
In the meantime, some Lincoln County business owners have come up with creative ways to alleviate their hiring issues, from shortening hours to creating places for their employees to live.
Dozens of restaurants and other businesses across the county were forced to limit hours or services this summer.
Others have turned to offering new, less work intensive services or their own employee housing solutions. Local Ocean, a Newport fish market and restaurant, started a popup beer garden called Localito, to take pressure off its kitchen staff by offering appetizers and alcohol in a spot adjacent to its restaurant.
Drew Roslund, owner of Fireside Motel and Overleaf Lodge in Yachats, is working with the city of Yachats to designate part of his property for temporary RV housing to help house workers employed during the busy season who might otherwise not find a place to live in Lincoln County.