As private sector jobs growth has showed signs of a slowdown in July, some small-business owners fear that the continuation of COVID-19 assistance from the federal government, including the renewed eviction moratorium and enhanced unemployment benefits, will only further exacerbate the hiring challenges created by the recent labor shortage.
According to the Committee for a Responsible Federal Budget's COVID money tracker, the federal government has spent at least $4.5 trillion in COVID-related funding as of Aug. 2, including $633 billion in unemployment benefits and $46.6 billion in rental assistance.
"I think [the eviction moratorium] is just going to prolong the current status quo of people not wanting to come into work," Guy Chemical president Guy Berkebile told FOX Business on Thursday.
Due to staffing shortages, the Somerset, Pennsylvania-based chemical plant says it has been unable to operate its 18 production lines at full capacity, causing delays with its shipments to customers.
"We used to put an ad out for production workers and we would get dozens of responses. Now, we're lucky if we get four, five, six responses," Berkebile explained. "And out of these applicants, some of them will respond. And I would say half of them won't show up for the interview."
In addition to staffing shortages, Guy Chemical's administrations manager, Terri Mitchell, says there has been a wave of high absenteeism among the newest hires in its workforce of 180 employees.
"You can have anywhere from 10 to 15 [employees] call off per shift," Mitchell said. "The turnover is just unbelievable. They might last for two to five days and then they just stop coming in."
Loycent Gordon, who owns Neir's Tavern in Woodhaven, Queens, told FOX Business that his bar has been unable to fill an open manager role for the last three months. To date, fewer than 10 candidates have applied for the role, which Gordon attributes to the continuation of enhanced unemployment benefits.
"The money that's being paid to people for unemployment is competing with what we're paying. So now we have to find ways to raise prices and cut other costs to match and exceed what the government is paying," Gordon explained. "When you don't have enough people to work, you can't expand your hours and you can't serve as many customers as you would like to serve to pay all the business expenses that come with operating a business."
In addition, the coming vaccine mandate in New York City for indoor activities could also impact hiring, Tyler Hollinger, owner of Manhattan's Festival Cafe, told Neil Cavuto on "Coast to Coast" Friday.
"It's incredibly tough for a government that's currently paying people way too much on unemployment so they don't come back to the workforce to now put restrictions on the workforce that they have to all get vaccinated," Hollinger said. "Think of the businesses who have unvaccinated employees. Come Sept. 13, they're going to have to fire all these people. So now you're even harming the workforce even more."
Chad Miller, who owns McGraff's American Grill in Loveland, Colorado, told FOX Business that the staffing shortage has gotten so bad at his restaurant that employees have been forced to take on double and triple their normal duties.
"People will come together and do the hard thing for a while, but people are people," Miller said. "You're going to burn them out."
While Miller has offered monetary incentives like bonuses and raises to keep his employees motivated, he warns that the government needs to take a step back and let people go back to work.
"If you just dole out cash to people incentivizing them not to work, you're not going to replace the coffers with FICA and tax money and it's just going to spiral. That's completely, obviously unsustainable," Miller said. "You can print as much money as you want, it's just going to accelerate inflation."
Additionally, Gordon says that the White House and lawmakers on Capitol Hill need to "get their act together" on messaging, arguing the inconsistent and rapidly changing rules during the pandemic on everything from COVID-19 restrictions to vaccination requirements has made it difficult to maintain a sustainable business model and an aggressive hiring approach.
"We can't operate in silos. We have to do this together" he emphasized. "We've learned that, if we don't, things get worse. This is a collective effort. Anything less will prolong this pandemic."