Former Executive Director, Communications and Strategy
July 01, 2021
This time of year, in the shadow of the iconic “Dolle’s Salt Water Taffy” sign on the Rehoboth Beach boardwalk, you would normally find a line stretching toward the sand in front of Thrasher’s french fry shop. A local favorite for many of the thousands of visitors who flock to this Delaware seaside town each summer, Thrasher’s has been dishing up fresh-cut potatoes for 92 years.
This year, there’s no line. No fries. No customers.
Because there are no workers.
Dean Shuttleworth, the general manager, says he temporarily shuttered the location—one of three Thrasher’s outposts in the Rehoboth area—because he cannot find workers to staff the shop. One of the other locations is fully open. The third is only opening on the weekends—again, due to too few workers.
Like many others in Rehoboth, Shuttleworth’s small business counts on help from temporary-visa workers, part of what’s known as the J-1 visa exchange program, to help meet summer demand. The visas were suspended last year during the pandemic, and while they have been reinstated, embassies overseas are conducting only limited interviews due to lockdowns, leading to a second-straight year in which that important stream of workers has been all but unavailable to Rehoboth employers.
“I think we’re gonna struggle,” Shuttleworth told WTOP.
Shuttleworth is doing what he can to mitigate the challenges. He has boosted hourly wages from $12 to $13 plus a $1.50 summer bonus (he’s also hoping elected officials will step up to help local employers by offering hiring bonuses, as well). Still, not enough workers are applying. As a result, he has hired only about 44 of the 60 employees he needs each summer. While about 20-25 of those workers are typically J-1 visa holders in any given year, as of last month, he had hired only one.
“There’s only so many Americans that are able to work,” Shuttleworth said.
Photo via Thrasher's Facebook Page
Next door, it’s a similar story.
Tom Ibach has run the famed Dolle’s Candyland store for 30 years. Recently, the Delaware News Journal called the 94-year-old shop’s renowned saltwater taffy the “unofficial candy of the Biden White House,” as President Biden and the First Lady keep a bowl of it in the outer Oval Office in the White House. The Bidens’ Rehoboth vacation home sits just a couple miles north of Dolle’s.
Every morning around 6 o’clock, Ibach starts mixing ingredients for the company’s renowned fudge, taffy, and other confections in large copper kettles. He used to make sure the shop opened promptly at 9 o’clock. But this summer, due to the worker shortage, Ibach has reduced hours and doesn’t unlock the doors until 11. He says this season—even more so than last year—could be the most difficult one since he started in 1991.
"I don't have any help,” says Ibach, whose son (who has another job) has started coming in early to help his father make candy. “It's a terrible situation. It's going to be very, very difficult with a skeleton staff.”
Photo via Funland Facebook Page
Thrasher’s and Dolle’s are hardly alone. The Rehoboth boardwalk is speckled with “Help Wanted” signs as small, independent businesses in this tourism-dependent town struggle to find and hire the workers they need to simply survive what should be the most prosperous season of the year. Just like Ibach and Shuttleworth, many employers have been forced to reduce hours and operations, or even close altogether, even as high numbers of tourists return to the beach eager to patronize them.
It’s a devastating and all-too-common narrative for small businesses in tourism-heavy towns that endured a lost summer in 2020 only to find themselves unable to return to full operations for a second straight year—this time, not because of occupancy restrictions and other health measures, but because they simply can’t fill jobs.
“The worker shortage is real—and it’s getting worse by the day,” U.S. Chamber of Commerce President and CEO Suzanne Clark said earlier in June. “American businesses of every size, across every industry, in every state are reporting unprecedented challenges filling open jobs. The worker shortage is a national economic emergency, and it poses an imminent threat to our fragile recovery and America’s great resurgence.”
U.S. Chamber analysis of federal labor data reveal the severity of the challenge employers are facing in Delaware and across the country. During the first few months of pandemic, the number of employed workers in Delaware dropped by roughly 73,000. While the economy has started to reopen and recover, the state has only recovered about two-thirds of those jobs, with still 24,000 fewer people employed in May 2021 than were employed before the pandemic began (February 2020).
Meanwhile, the First State’s labor market is historically tight. U.S. Chamber analysis earlier this last month showed there are now less than two (1.94) workers available for every open job in Delaware. While that’s a bit higher than the current national average (1.2), both are far lower than the national average over the past two decades, when there have typically been 3 available workers for every open position (watch the video below for a deeper dive into the numbers).
Why the shortage? In addition to the immigration challenges, there are several other contributing factors. A recent poll of unemployed Americans by the U.S. Chamber shows that inflated unemployment benefits and lack of childcare access has deterred significant swaths of workers who lost jobs during the pandemic from trying to re-enter the workforce. Others remain concerned about health and safety. Others say they may not rejoin the workforce at all.
Delaware, President Biden’s home state, remains one of a minority of states that continues to offer $300 weekly, federally subsidized supplemental unemployment insurance. Most states—some led by Republican governors, others by Democratic governors—have ended or announced plans to end the program amid mounting evidence that the inflated payments are discouraging some Americans from returning to work. Delaware Department of Labor Secretary Karryl Hubbard recently noted that her department has heard the concerns about unemployment benefits hindering hiring efforts.
In a recent editorial, Rob Martinelli, president and CEO of the parent company of the Delaware Business Times, wrote: “The federal enhancement is yet another body blow for small businesses.” He called on the governor to “take the lead and join other states in rejecting the additional federal benefits.”
To respond to this national economic emergency, the U.S. Chamber of Commerce and the U.S. Chamber of Commerce Foundation recently launched America Works, a nationwide initiative mobilizing industry and government to address America’s worker shortage crisis.
As part of the initiative, in addition to proven employer-led worker training programs, the Chamber has outlined federal and state policy recommendations that would help grow and upskill the U.S. workforce. The proposals include ending the $300/week supplemental unemployment program, doubling the cap on employment-based visas, growing federal investments in employer-led job education and training programs, and expanding access to childcare for working parents.
Photo via Grotto Pizza Website
The worker shortage is plaguing businesses across myriad industries in Rehoboth. Bars are shuttered because they can’t find bartenders. Gas stations are offering $100 signing bonuses to attract applicants. Golf courses are reducing operations, restaurants are jockeying for every available worker, and local home builders are capping the number of houses they can sell each month.
“I’ve been doing this for 20 years at the beach and this is hands-down the worst staffing crisis we’ve ever had,” Jeff Gosnear, vice president of Grotto Pizza—with 21 locations in Delaware and Maryland, including three in Rehoboth—told the Delaware Business Times recently. Grotto Pizza is reducing hours and closing restaurants in less high-demand areas on slower days. Gosnear said he may start to run employee shuttles across the state to help fill staffing gaps.
“It’s not just us,” Gosnear said. “It’s going to be a tough year for everybody.”
That includes Sean Martin, regional manager overseeing three Kohr. Bros. ice cream shops in Rehoboth, who told the Delaware Business Times: “We have the chance to somewhat have a normal year, and now we don’t have the help.” Heading into the summer, Martin said his shops had only about 25-35 percent of the workers they needed to operate at full capacity.
Chris Darr, the personnel manager at Funland, a family-owned amusement park on the Rehoboth boardwalk, said the park is operating at less than 20 percent capacity, in large part due to the worker shortage. That has had a dramatic impact on the company’s revenue at the worst possible time.
“From a financial standpoint, we’re in survival mode,” said Darr.
Sam Calagione, founder of Dogfish Head Craft Brewery, says his Rehoboth brewpub temporarily cut lunch service altogether and started closing its sister restaurant on Mondays because it could not find enough workers to staff both locations full-time. The company says it cannot find enough manufacturing workers to staff its beer factory, either.
Just a couple blocks from the boardwalk, Benjamin Gray, general manager of The Bellmoor Inn & Spa, told the local ABC affiliate that employers are now engaged in a “wage war” to compete for workers, with new employees “working for a couple days or two and then going to another competitor.”
That is, if they make it that far. In some cases, he said, “they’re not showing up for the interview at all. I’m told it’s because of the unemployment benefits they’re receiving.” Over the course of a single month earlier this summer, Gray said 17 people didn’t show up for a scheduled interview.
Photo via Flickr / Bill Walsh
Sadly, the stories in Rehoboth will sound familiar to small business owners from coast to coast, particularly for seasonal and tourism companies—large and small—that had been hoping for a great resurgence but are instead mired in a second straight summer of great reduction.
A Newport Beach, California restaurant owner says he’s 40 people short right now, and slow service problems have become so pervasive that the employees he does have are becoming the target of verbal abuse from patrons. A Rochester, Michigan hotel owner is turning away guests because he doesn’t have workers to service the rooms. A beachfront restaurant owner in Galveston, Texas says he is short about 125 workers, calling it “a much more challenging environment than in 2020.” Outside Acadia National Park in Maine, a local restaurant is closing early every night, losing key business from tourists.
Worker shortages at airports have grown so severe that a top executive at Dallas/Fort Worth International sent an email to all shops and restaurants urging them not to poach one another’s employees. Walt Disney World is offering $1,000 bonuses for new hires in labor-strapped positions, while neighboring Universal Studios recently increased starting wages. Las Vegas casinos are holding weekly job fairs to try to keep their resorts, restaurants, and blackjack tables open.
Back on the Delaware coast, Rehoboth Beach-Dewey Beach Chamber of Commerce President and CEO Carol Everhart summed it all up by saying: “It’s an employee drought. I’ve never seen anything like it.”
Carrie Leishman, president and CEO of the Delaware Restaurant Association, used even stronger language: "There's an all-out crisis when it comes to workforce recruitment right now.”
An all-out crisis, indeed. It’s time our nation’s elected leaders start treating it that way.