Low unemployment rate stymies city, county businesses in hiring

By Coleman Martinson

 

Unemployment rates across the country are near an all-time low, and the Rockbridge area is no exception.

 

Unemployment Rates in the Rockbridge area

And while low unemployment is a sign of a healthy economy, local business owners say they can’t find employees quickly enough — and that’s starting to become a problem.

 

“We do not have many applicants coming through our system,” said Autumn Smith, a shift leader at Hardee’s in Rockbridge County. The Hardee’s in Buena Vista pays more than the Hardee’s in Rockbridge County, she said, which might be a factor.

 

Rockbridge County’s 2.8% unemployment rate in July was half of what it was back in July of 2014, according to data from the U.S. Bureau of Labor Statistics.  In the City of Lexington, the unemployment rate was 5.7% in July 2019, nearly half the rate it was back in July 2009.

 

“We’ve been struggling to find qualified people,” said Holly Hopkins, the Southern Inn Restaurant front-of-the-house manager. “We haven’t had a huge response for people coming in.”

 

The restaurant, like other businesses in Lexington, is offering incentives and other benefits to try to get potential employees through the door. Southern Inn’s advertisement in the Sept. 18 issue of The News-Gazette said that it’s offering “signing bonuses, competitive wages, paid vacations, excellent health insurance.”

 

But one business owner said she doesn’t think money’s the problem.

 

“Big companies that start out at $20 an hour can’t get people,” said Tina Miller, owner of Walkabout Outfitter. “If they can’t get people, then there’s just not enough people to work. It’s a great thing for the country, but it’s tough on businesses.”

 

Miller said Walkabout Outfitter has been looking to hire for its location on Lexington’s Main Street for three months. All six of her stores across the state are trying to hire as well.

 

“We can’t pull people from this store to work this year because of the fact that we’re already spread thin,” she said. “With us going into our busiest time of year and we can’t get people to apply, that’s a stressor.”

 

With the low unemployment rate comes a tighter labor market, said Carl Kaiser, a professor of economics at Washington and Lee University.

 

“When the labor market is tight, the wages go up,” Kaiser said.

 

An economist at the Federal Reserve Bank of Richmond said he’s seeing the same thing across the state.

 

“Does it affect businesses? It does,” said Joe Mengedoth, who works on the regional economics team at the Fed in Richmond. “We hear from business contacts that it’s a tight labor market and that they’re being constrained from not having the ability to hire.”

 

Several area business owners said their biggest competition in hiring employees isn’t other small businesses, it’s the local universities.

 

“We’re competing with the university market because of pay,” said Jason Wavell, human resources and recruiting manager at Up to Par Management, which runs several businesses in Lexington, such as Rocca, the Robert E. Lee Hotel and the Sheridan Livery Inn & Restaurant. “The universities help us at times, but when students go home, it has its challenges, but it’s a positive challenge.”

 

Miller said that only one Washington and Lee University student has applied to work at Walkabout Outfitter in 23 years. Students, she said, are hard to employ because of their busy class schedules and absences during breaks. Neighboring Virginia Military Institute cadets have even busier schedules.

 

“You would think we would actually have a good employment pool here because of having two colleges and [Southern Virginia University] right around the corner,” Miller said. “It’s been a challenge for sure when the unemployment rate is as low as it is. You pretty much have to grab somebody from another job.”