Kim Beebe is part of the three-person executive director team of the Ellsworth Area Chamber of Commerce. In her job she has been hearing from businesses about the impact of the past year.
"What I’m hearing is that for the most part hiring is still a challenge," Beebe explained.
The story is similar in New Richmond. The area chamber director, Rob Kreibich stated, “It really is the tale of two worlds. We've got some businesses that have had their best years ever. And we've had on the other end of the spectrum, businesses that are, are struggling very much to deal with it.”
According to the Job Center of Wisconsin, the average unemployment rate in Pierce County in 2019 was 3.4%. In 2020, the unemployment rate in Pierce County jumped to an average of 7.1%. While the unemployment rate fluctuated by a percentage point or two throughout 2019 depending on the month, 2020 saw a jump from 4.1% unemployment in March and 15.6% unemployment in April. By September, unemployment numbers in the county began returning to what was normal before the pandemic.
In Red Wing employers are working to find employees, specifically in the manufacturing and hospitality industries, according to Chamber Director Patty Brown. But while these needs may have been expedited by the pandemic, they were not uncommon in the community before March 2020.
“We’ve had workforce shortages long before COVID arrived,” Brown said.
Brown added that at the beginning of the pandemic some companies had to lay off employees.
“Now it’s back to trying to figure out how to get things running again,” explained Brown.
It is too early to have a full understanding of the unemployment rate in 2021. What we currently know is that there are companies in the area looking to hire individuals currently looking for jobs and individuals who gave up and left the market. So, why does this apparent paradox exist?
Locally there are numerous theories. Kreibich suggested that the extra $600 in unemployment encouraged more people to stay home. He said that in the first few months of the pandemic there were “manufacturers begging for people and they couldn't find employees. Because it was easier to take the unemployment, stay home. You didn't have day care costs, those sorts of things. You didn't have gas, commuting costs. When that ended, there was, you know, more people looking, coming in and getting hired.”
Beebe also hypothesized that for many individuals it was easier to stay home than return to work. One thing she pointed to was children attending school online. Beebe stated, “virtual school and all those kinds of things that parents really appreciated being able to work from home when their job allowed them to, it was still hard and stressful, they don’t know how parents who have to go to a job everyday, how that’s happening.”
Beebe also theorized that people may be out of the job market because of uncertainty about the market, virtual work availability and the health risks of COVID-19 as reasons people may be slow in returning to Ellsworth area jobs.
One thing that may impact employers inability to find employees in 2021 was a factor last year and years before that: a shortage of workforce housing.
As of Thursday, Feb. 11, the popular real estate website Zillow showed only seven houses in Ellsworth that were up for sale. The average price of those homes was $266,690. Meanwhile in Red Wing, only 27 homes were listed on Zillow.
The Minnesota Department of Employment and Economic Development reports that the unemployment paradox in Red Wing and Pierce County can be seen throughout Minnesota. In September, analysts with the department pointed to three reasons why this paradox may exist:
“In July, only 5.9% of claims in Northeast Minnesota were reported as permanent indicating that the vast majority of claimants still expected their unemployment to be temporary. Workers who are waiting to be called back to their old job might not be interested in looking for something else.”
Individuals may be waiting until the end of the pandemic to return to their job or the job market due to health concerns.
“A third option could be that individuals were waiting to see if an additional stimulus check or enhancement to unemployment benefits were going to be implemented.”
While employment numbers are beginning to return to what it was before the pandemic, it is important to remember that not every part of society has been impacted the same way. Data from a September Pew Research Center report shows that the pandemic impacts people differently by race, ethnicity and income.
The report stated, “one-in-four adults have had trouble paying their bills since the coronavirus outbreak started, a third have dipped into savings or retirement accounts to make ends meet, and about one-in-six have borrowed money from friends or family or gotten food from a food bank. As was the case earlier this year, these types of experiences continue to be more common among adults with lower incomes, those without a college degree and Black and Hispanic Americans.”