The website for Sugar Shack doughnut shop in Saginaw, Mich. doesn’t immediately show off colorful hand-baked sweet treats. Instead, the landing page darkens and a pop-up message tells visitors, “We are hiring! Apply online and join the Sugar Shack team today!”
Labor shortages are becoming increasingly problematic for small business owners and publicly-traded companies alike. There are still some 10.4 million job openings in the U.S. and some 7.4 million people unemployed, according to the latest figures from the Bureau of Labor Statistics. “But that did not happen,” he said. He only saw “a small uptick in applications.” To lure more applicants, Hartwell recently raised the starting pay for his shop’s 18 job openings to nearly $12 an hour from $10.75 an hour.
But he can’t match the $15 an hour that the nearby McDonald’s MCD, +0.49% and the fast-food chain Culver’s offer. “I’ve had people come to my company, apply for the job, and they say ‘I want to make $15 an hour.’ I have never seen this before in my life.”Hartwell says he has rewarded loyal employees with cash bonuses, but he cannot afford to pay his entire staff $15 an hour starting wages.
If labor shortages continue and supply costs rise, many small businesses will be forced to close in the next year, Wade said. “It’s a terrible circumstance to face for small businesses who made it through the height of the pandemic with already limited resources,” she said. “Policymakers could ease the issue somewhat by increasing parents’ access to quality, affordable childcare and seeking reasonable immigration reforms that will help address the labor shortage,” Day added.