Take This Job: Labor Shortage Hits East End Businesses Prepping for Busy Season

Good help is hard to find, as the saying goes, but businesses across the Hamptons and North Fork say finding workers is a lot harder than usual as the summer bustle nears.

That’s because the coronavirus pandemic has caused a national labor shortage that has local companies from the hospitality sector to the trades struggling to staff up in time for the peak season. Experts and employers say the causes range from new travel and visa restrictions to increased housing demand and how the pandemic has disproportionately affected women in the workforce. Some say businesses may have to raise prices to afford increased compensation to attract new hires.

“The reality is in a resort community, labor is always an issue, but I think this year it’s exponentially worse because of COVID,” says Mark Smith, managing member of the Honest Man Restaurant Group, which is hosting its first-ever job fair to find new recruits for the company’s five East End eateries. “It’s not just the restaurants. All of the industries … we’re all competing for the few people that are out here.”

Other resort communities, such as Newport Beach in Rhode Island, are similarly bracing for a higher-than-usual shortage of seasonal labor. The shortage comes as Suffolk County’s unemployment rate increased to 6.1 percent in March, up 1.8 percentage points from a year ago, according to the New York State Department of Labor (DOL). The state’s rate was 8.5% and the national rate was 6.2%. 

The number of private sector jobs on Long Island decreased over the year by 89,200, or 8%. All nine private industry sectors lost jobs in March compared to a year ago—including education, professional services, and manufacturing—while the government sector shed 5,700 jobs over-the-year, according to the DOL.

“Our labor force has shrank due to the pandemic and a lot of that has to do with women, who have been hit particularly hard by the pandemic,” says Shital Patel the DOL’s labor market analyst for the Long Island region. “They’ve been the ones to drop out of the labor force to care for their children as schools went remote and also as daycare centers closed. While labor demand is coming back, the supply might not be 100% available to return.”

Since many schools are at least still partly remote, the childcare issue persists for parents. 

“These structural issues around childcare and women in general in the workforce, it’s going to take a while to unwind from this pandemic,” Patel adds. “It’s not quite as easy as flipping a switch.”

Martin Cantor, a Long Island-based economist, agrees that women are disproportionately affected by the economic downturn that COVID-19 caused, and adds that the impact varies across industries.

“Those who are skilled and can work at home are doing well,” he says. “Those who have to show up have been really devastated.”

Cantor notes that some industries are raising prices to compensate for the increased cost of doing business. The consumer price index jumped 0.6% last month, the largest gain since August 2012

Cantor adds that some people are discouraged from seeking work due to the $300 weekly bump in state unemployment benefits enacted amid the pandemic.

“Government is providing more money to the unskilled labor than they would get if they showed up to work,” Cantor says. “So more people are staying home.”

Employers and advocates say the coronavirus-related restrictions on work visas has also reduced the number of workers from abroad that often fuels the East End economy.

“Everybody’s working as much as they can and everybody’s trying to hire more people,” says Bill Fox, a Hamptons landscaping company owner. “They’re not letting anybody in because of the coronavirus. We’re just sort of maxed out.”

The Biden administration will set aside 6,000 seasonal guest worker visas for people from Guatemala, Honduras and El Salvador in the coming months, the U.S. Department of Homeland Security (DHS) said on April 20, a small step toward establishing more legal pathways to the United States from the region.

The 6,000-visa allotment would be part of an additional 22,000 H-2B visas made available to employers in the current fiscal year, which ends on Sept. 30, DHS said in a statement. The increase has been sought by business groups but opposed by labor unions amid high unemployment related to the coronavirus pandemic. The extra H-2B visas would be in addition to the annual allotment of 66,000 visas for the fiscal year, a tally that was exhausted in February. The visas are used for landscaping, food processing and hotel work, among other seasonal jobs.

“It’s definitely having an impact,” says Minerva Perez, executive director of OLA of Eastern Long Island, a nonprofit group that advocates for the region’s Hispanic residents. 

“We have many DACA folks out here as well,” she adds, referring to the Deferred Action for Childhood Arrivals program that allows undocumented immigrants brought to the United States when they were children to avoid deportation for the time being. “They are in limbo. Masters candidates, town employees, etc.”

Smith, of Honest Man Restaurant Group, has seen many immigrant workers at his five restaurants as well.

“Over the years we’ve always had an influx of people, whether it was from Ireland at one point, then Eastern Europe, and now the Latin American countries,” he says. “With the people not being able to travel back and forth, that’s another factor.”

Also playing a role is the difficulty in finding a place to live on the East End since so many people have fled to the region to escape the pandemic.

“Housing is always an issue, but with the backdrop of COVID and what housing is available is just so overpriced because of the demand, for hourly workers the equation is no longer sustainable in terms of how much they make versus how much it costs to live,” Smith says.

And with some economists predicting the labor shortage may persist until 2024, the issue may not be resolved anytime soon.

-With Reuters