BENTON HARBOR — The labor force has shrunk, and it’s a trend that’s here to stay.
At a media roundtable with Kinexus Group, at the end of August, Al Pscholka, vice president of public relations and government affairs, presented a report showing a decrease of more than 4,000 workers in the labor force from June 2019 to June 2021.
These numbers were present at the beginning of the summer. However, it was still unclear whether the gap would close.
Now, Pscholka said, the 4,000 worker decrease is a stubborn trend.
“This is no longer a blip,” Pscholka said.
This shortage is forcing businesses in Berrien, Cass and Van Buren counties to adapt, especially in manufacturing, health care, hospitality and agribusiness.
Pscholka said manufacturers are increasingly looking to automation as a fix for hiring woes, and restaurants are closing on certain days or closing their dining rooms.
“People are changing their business model to try to get at this labor market shortage,” Pscholka said.
Increased wages, hiring bonuses and other incentives have not reaped the hires employers hoped they would. Pscholka said small businesses are especially suffering as their payroll budgets can’t compare to their corporate competitors.
From May to June, the tri-county area saw some labor force gains of 1.3 percent, but the growth was smaller than the seasonal jump of years past. From 2017 to 2019, the gains averaged 1.4 percent.
The tri-county’s unemployment rate of 5.7 percent is slightly higher than the statewide rate of 5 percent, but the report attributed this to Berrien, Cass and Van Buren’s high labor force participation rate.
Active unemployment claims have declined steadily since April, the report said.
Pscholka said southern states that ended the additional federal unemployment benefits early did see some gains in labor force participation that have since died down.
“That’s probably less of a factor than we thought,” Pscholka said.
The report focused on the labor shortage’s effect on the health care industry, which had a nursing shortage prior to the pandemic.
“Nurses are experiencing psychic trauma and burnout, leading them to walk out of their jobs mid-shift,” the report stated.
Additionally, physicians are also bearing a mental burden.
The report stated 20 percent of physicians surveyed either knew a colleague who considered or attempted suicide, or considered or attempted suicide themselves.
“The delta variant poses an existential threat to health care systems in low vaccination coverage areas...” the report stated. “(The tri-county area), unfortunately, is an area also characterized by low full-vaccination coverage levels.”
With short staffing, hospitals could struggle to handle the number of cases.
Additionally, more leisure and hospitality workers are leaving the industry permanently. Pscholka said they’re citing rude customers as a reason why.
“The customer isn’t ‘always right,’” stated the report. “And their post-COVID behavior is impacting workers’ mental health.”
The report stated 38 percent of former hospitality workers will not return to the industry. A staggering 69 percent said no incentive would entice them to come back.
With numbers like these, Pscholka said the industry will have to rebuild its workforce.
“You’ve got burnout in the workforce,” Pscholka said.
‘The time is now’
Lily Brewer, executive director of Michigan Works Berrien, Cass, Van Buren, said those who have been sitting out of the job market should step up now.
Michigan Works offers in-person and virtual resources for those needing help to enter or re-enter the workforce.
June 2021 had the second-highest unique job posting number since Kinexus started to collect data. Additionally, more job postings are only requiring a high school diploma.
“The time is now,” Brewer said.