July 5, 2022

Finance & Economy

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‘I can pay $40 or $45 an hour and still can’t get anybody!’ But salary isn’t only thing on workers’ minds

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Editor’s note: This is the first of a three-part series on the challenges employers now face in finding workers. Next week: The challenge of hiring seasonal and temporary workers for the holidays.

Ralph Magliocchetti at II Villaggio in Carlstadt on Thursday, September 16, 2021. Magliocchetti says he’s been unable to find help, even at $40-$45 an hour for cooks in his high-end Italian restaurant.John Jones | For NJ Advance Media

After four decades in the restaurant business, Ralph Magliocchetti says he has never seen anything like it.

The owner of the elegant II Villaggio in Carlstadt cannot find waiters or kitchen help. Pay is not an issue, he said, pointing to the fact an experienced candidate can practically name their price.

There just aren’t applicants.

“I’m killing myself. I’m working 90 hours a week in the kitchen, doing the jobs of three people,” Magliocchetti, 72, said. “I can’t get a cook for any price. It’s not the wage. I can pay $40 or $45 an hour and still can’t get anybody!

“I don’t know where we’re heading,” he said. “I don’t see this getting any better.”

Magliocchetti, who estimates he has spent $20,000 on online wanted ads in the past 6 months, is hardly alone.

The nation is going through a great awakening and what many believe will be a once in a generation shift in how we work — and how we view work. This death of work as we knew it is playing out across the country and across virtually every industry as the start-again, stop-again Covid recovery stumbles along, presenting complex questions about life choices, core values and how we can be happier at work.

But this much already seems clear: Workers are demanding and getting more, and that’s not limited to salary. Schedule flexibility, work from home options, better benefits, more work-life balance and developing more diversity in the workplace are just a few things workers now expect.

And so today, it’s impossible to pick up dinner order downtown or log into Facebook without seeing pleas for help. Restaurants. Landscapers. Warehouses. Factories. Supermarkets. Hospitals. You name it, they’re searching for workers.

Labor Department figures show nationally 10.9 million open jobs. Incredibly, that’s more positions than the estimated 8.7 million unemployed who actively are seeking jobs. Workers in some industries seem to have literally vanished, especially low-wage earners who make their livelihoods in public-facing roles in hospitality, food service, tourism and retail. Those industries have been hit especially hard here in New Jersey.

As a result, restaurants have cut back hours, hotels and entertainment venues are operating at reduced capacity and retailers are struggling to hire holiday workers.

Employment experts said the desire for a clearly defined career path and high-quality job experience have supplanted paychecks as a priority for hourly service and essential workers, as well as many white collar professionals fortunate enough to work remotely from home.

Consequently, hourly workers and affluent professionals alike are on the move, willing to change companies, switch employment sectors, join the gig economy or set up their own businesses.

“We are going to be studying the Covid recession for generations to come because never before have we been hit like this,” said Jane Oates, president of the non-profit WorkingNation and one-time senior adviser to former New Jersey Gov. Jon Corzine.

“Part of that is the salary or hourly pay, but they are also looking at the flexibility,” she said. “People want to see that there is a pathway for them to get a better job title and away from the job that they are in now.”

Our new attitudes about work were illustrated in a recent poll that found 6 in 10 jobseekers – both the employed looking for new jobs and the jobless looking to rejoin the workforce – were open to changing careers because of the pandemic, according to the Morning Consult survey.

“The pandemic was emotionally impactful,” said Greg Dell’Aquila, a commercial real estate developer and president of the Hoboken Business Alliance. “What the employees are saying is, ‘I want you to be nice to me and not treat me like a cog in this machine.’”

“This has been such high anxiety that people have a PTSD related to Covid and what it did from shutting down the United States to the fear of the unknown of getting this virus,” he said. “Can I come back to work? Can I afford my bills? How long is this going to last? It was all anxiety.”

Perhaps the most dramatic change is underway among entry-level hourly wage earners.

There are an abundance of job openings that pay at least $15 an hour, an amount embraced in recent years as the model minimum wage and adopted by several states. In New Jersey, there are sectors in which the state’s $12 minimum wage has become virtually obsolete post-Covid.

Still, even higher salary offers have gone unanswered and the end of generous federal unemployment benefits earlier this month has not prompted a widely anticipated stampede of workers back into the job market – not yet, at least.

“Our hiring efforts are abysmal,” said Kris Ohleth, owner of Garden State Kitchen in Orange, which rents commercial cooking space to caterers and restaurants. “We hire cleaners and dishwashers to keep the kitchen ready. We are now offering $20 an hour to start, and still not getting many replies. It’s crazy!”

Almost monthly, big box retailers – Target, Walmart, Amazon, Staples and others – have attempted to attract employees with splashy announcements of hikes in starting pay, benefits and perks like retention bonuses and college tuition reimbursements.

Even so, some of the most lucrative offers still have few takers, forcing businesses to up the ante to find indispensable workers. For instance, Coach USA is offering bus drivers a $5,000 signing bonus, and other incentives for cleaners and bus mechanics.

“The days of companies making people work long hours for little pay are over,” said Jim Kirkos, CEO and president of the Meadowlands Chamber. “Businesses are going to have to get creative to give employees more meat on the bone, an increase in the wage together with more career opportunities and benefits.”

Kirkos, whose group sponsored a job fair for 15 businesses this past Friday, said the hospitality industry has been devastated by fewer moonlighting performers since Broadway went dark and a dramatic decline in new immigrants, a traditional source of hospitality workers. They have been blocked from entry to the U.S. by Covid visa restrictions or fled the Trump administration’s tough immigration policies, he said.

“I don’t want to sugarcoat it. I think a lot of people will lose their life’s work,” said Oates, also a former Obama administrator labor official. “It’s going to become increasing difficult for small businesses to find the talent they need.”

The turn of events has put withering pressure on small businesses like Magliocchetti’s Italian eatery, where he said the full range of Covid era employee challenges played out in his kitchen and elegant banquet rooms.

Magliocchetti, who built the white glove restaurant 43 years ago, said some of his employees have worked at the restaurant for decades. He said many did not return after last year’s Covid lockdown. Their reasons varied.

Some feared contracting the coronavirus and earned more collecting $600 in weekly unemployment benefits. Others lacked child care so they opted to work a few hours weekly driving for ride-share services transporting people, and delivering food or goods for major retailers. Still others left the restaurant industry altogether for jobs at warehouses or big box retailers that pay less than II Villaggio, but offer benefits and steady daytime hours.

Magliocchetti said he is near his breaking point.

“Maybe it’s time to shut it down and call it quits. This has crossed my mind,” he said. “If I lose a couple of more people, I’m done.”

George E. Jordan writes a weekly column on business and development in New Jersey. He may be reached at [email protected].