Why Salem employers are having a hard time finding workers despite high unemployment

A ‘Now Hiring’ sign in front of the Boon’s Treasury McMenamin’s location on Monday, April 26. (Amanda Loman/Salem Reporter)

When the pandemic first hit Oregon over a year ago, Patricia Callihan-Bowman, the owner of local staffing firm Express Employment Professionals, worried that a lot of businesses would just not be there anymore. 

A year later, Callihan-Bowman has a different concern: she has dozens of jobs in food processing, office services, accounting and human resources management that need to be filled. Even with Salem and Oregon’s unemployment rate above normal, she said someone could walk into her staffing firm and walk out with a job that day. 

Callihan-Bowman said she’s heard similar stories from other employers across the country who’ve had a difficult time finding workers.

As Salem and the rest of Oregon continues its slow and unsteady economic recovery from the pandemic-induced downturn it now faces a new confounding problem: the unemployment rate remains high but employers are struggling to find workers. 

While the pandemic caused historic job losses, some industries were barely touched by the downturn or recovered quickly. They need workers. 

“Not all businesses, but many businesses are thriving,” Callihan-Bowman. “And when they thrive, they need additional people.”

Economists and employers say more generous unemployment benefits, safety concerns about the virus and the lack of childcare are all keeping workers on the sidelines. While there’s optimism the employment mismatch will be resolved later this year clearing the way for full recovery, some economic issues from the pandemic are expected to linger. 

In March, the unemployment rate for the Salem area was 5.8%, slightly below the statewide rate of 6%. The same month, nearly 4,000 residents of Marion and Polk counties filed continuing claims for unemployment insurance. 

Yet a study from the Oregon Employment Department found that there were roughly 7,000 job vacancies at any given time in the mid-Willamette Valley with an average hourly wage of $17.53. Statewide, there were 44,400 vacancies at any given time in 2020 and 54% of employers reporting having a hard time finding people, according to the department. 

According to numbers provided by the department, there were roughly 8,800 help wanted ads posted online ads in March, an increase of 860 from last month. From last year, the total volume increased 63%.

After the pandemic first took hold in Oregon a year ago, the state’s 3.5% unemployment rate shot up nearly 10 points with the Salem area following a similar course. 

But a year later, the Salem area has added back most of the lost positions. In March there were 167,200 jobs in the Salem area, 3.2% fewer than a year ago, according to the Employment Department. 

Pat O’Connor, Employment Department regional economist, said the leisure and hospitality industry as well as healthcare were particularly volatile early in the pandemic and accounted for most of the job losses. 

“It’s been really specific industries that have borne the brunt,” he said. 

However, department numbers show that other industries saw fewer job losses and have recovered more quickly. 

For instance, there are currently 11,300 manufacturing jobs in the Salem area, only 600 less than a year ago. 

Other industries have added jobs. With a hot housing market, the construction industry added 300 positions from a year ago, bringing the total number of jobs to 12,600. Similarly, there are 6,900 jobs classified as transportation, warehousing and utilities, up from 700 a year ago. Information and financial services jobs have been largely unscathed. 

Callihan-Bowman recalled people lining up looking for work after the recession of 2008. With employers now needing workers, she said she’s been proactive, taking out ads and dusting off contacts of people who previously applied for jobs. 

A NORPAC-branded truck transports frozen vegetables in Oregon. (Courtesy/Oregon Department of Agriculture)

The positions Callihan-Bowman’s firm has open include accountants, human resources directors, receptionists and other office jobs, as well as welder, assembly line work and food processing. 

While some jobs, such as welder or forklift operator, require additional training or certification, she described food-processing as entry-level work that pays $13 or $14 an hour. 

Food processing facilities have been linked to some of the largest workplace outbreaks in the state and nationally. Callihan-Bowman stressed that while companies she recruits prioritize the safety of their workers, these jobs have been hard to fill. 

“I think some of that comes from the different programs that are out there to help people through these really hard times that provide them with enough money that they don’t necessarily have to go get a job,” she said. 

Recent studies by economists at the University of Chicago and elsewhere have painted a complex picture of the pandemic labor market and suggested that more generous benefits haven’t impacted workers’ willingness to return to jobs. Employers’ difficulty finding jobs has sparked criticism that the real problem is that too many jobs don’t pay enough

Personal income in Oregon is about 15% higher than before the pandemic, according to a paper recently published by Gail Krumenauer, Oregon Employment Department economist, and state economist Josh Lehner. They attributed the rise in income to federal stimulus efforts, including the added $300 payments to weekly unemployment benefits. 

Krumenauer and Lehner point out in their paper that the average unemployment payment with added benefits is $670. That pencils out to $16.75, or $34,800 a year, below Oregon’s $50,712 median earnings. 

“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,” they said. 

O’Connor said the added benefits likely have more of an effect on lower-wage wage workers from whom getting an additional weekly $300 would be like winning the lottery but not higher-wage workers. 

But O’Connor, as well as employers and other economists, said there are other reasons workers are staying home. 

With Oregon seeing a fourth surge of Covid and under a third of the state’s population vaccinated, economists and employers say some workers (particularly those with underlying health issues) are reluctant to rejoin the labor force. 

There’s also childcare. While Salem-Keizer schools have reopened for in-person instruction, it’s only part-time, making it difficult for parents to arrange work schedules. The pandemic also caused dozens of child-care providers in Salem to close. Last year, the state’s childcare capacity shrunk to 21% of what it had been before the pandemic, according to a recent study from Portland State University and Oregon’s Early Learning Division.

O’Connor also said there are also workers whose skill set may not match up with available jobs. 

“Workers are not totally interchangeable widgets,” said 

Dean Craig, business services director for Willamette Workforce Partnership (a federally funded workforce development nonprofit), said he’s heard from construction, manufacturing and other companies having a hard time finding workers. 

He said someone looking for a career change could break into manufacturing or construction if they can show up on time and pass a drug screen. But he said some unemployed people remain deeply ingrained in their past jobs because they’ve been in it for a long time, making decent money and are immersed in its culture. 

Kim Parker-Llerenas, executive director of Willamette Workforce Partnership, said things could change later this summer. Additional unemployment benefits are slated to expire in early September and schools are expected to open for full-time instruction.  

“We anticipate our work to get much much busier,” she said. 

The most recent state economic forecast anticipates the economy will recover by 2023. But challenges will remain as the economy adjusts. Krumenauer and Lehner wrote that they expect the labor market to remain tight as the pandemic wanes with the pool of workers remaining low. 

Parker-Llerenas said that the loss of childcare providers could also be a huge barrier along with any other concerns people have about going back to work. 

“We are in such uncharted territory,” she said. 

Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.

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