NFIB warns of ‘serious problem’ in Indiana as labor shortage worsens

(The Center Square) – The head of Indiana’s largest association of small businesses said this week the lack of workers to fill jobs in the state is a “serious, serious problem” that may result in many more business closures.

“How can they grow and recover from the pandemic if they can’t find workers?” said Barbara Quandt, Indiana’s state director of the National Federation of Independent Business. “At some point, I think you’ll see more that will fail in the next year.”

In the NFIB’s latest poll of its members, 51% nationwide said they had job openings in September they could not fill – a point higher than in August and a record high reading for the third straight month.

“This is a serious, serious problem,” said Quandt. “It is now the No. 1 concern for businesses.”

Gary Brammer, the owner of a restaurant called The Bank in Pendleton, a small town northeast of Indianapolis, said he’s struggling to find enough servers to hire to wait on tables.

“This is the first time we’ve seen anything like this,” he said.

The shortage of people willing to work is affecting his business in several ways.

“I’ve got people I’ve got to move past, but cannot, because I have no one to take their place,” he said, adding that he can’t discipline employees for showing up late, or not showing up for their shifts at all.

But one of the worst things about the labor shortage, he says, is the people he takes the time to interview and hire, but who never show up for work because they were just going through the motions of a job search to be able to continue getting their unemployment checks.

“They have no intent to come to work. They’re just checking that box,” he said.

Meanwhile, business is booming.

“Servers in my restaurant are making more than I’ve ever known them to make because customers are tipping so well,” he said.

In several places in the state, McDonald’s restaurants are displaying banners advertising $15 per hour starting pay for people willing to work evenings and weekends. It’s more than twice the state’s minimum wage, which remains at $7.25 an hour, the federal minimum. Small businesses are forced to up their wages to lure workers. And it’s often not working.

In Bloomington, several restaurants have been forced to limit their hours and even close some days as there are just not enough workers to cover all shifts. It’s something that most college towns have never experienced as there are typically more students looking for jobs than job openings.

“Where are the workers? I don’t know. Are they going to come back? I don’t know,” says Brammer.

The survey also shows business owners are less hopeful about the future business climate than they were earlier this year.

The NFIB maintains something that it calls the “uncertainty index” – which looks at business owners’ answers to six questions about whether they expect to hire and invest and see their business grow in the next 3-6 months. That index increased 5 points in September, meaning 5% more small businesses than the month before answered they were “uncertain” or “don’t know” if they’ll be able to grow.

“Small-business owners are the most optimistic people on the planet, and if they’re not optimistic, it really doesn’t bode well,” said Quandt.

The supply-chain issues are also a serious problem for many businesses.

Brammer says for restaurants, it’s been a struggle lately to get chicken. His restaurant typically orders whole chickens, and also breasts and wings.

“We put orders in every day, but we don’t know if we’re going to get all of or any of that product until delivery,” he says. If they don’t get everything they ordered, he has to send someone out to the store to buy it.

In the NFIB survey, more than 35% of small-business owners said supply-chain disruptions have had a significant impact on their businesses. Another 32% reported a moderate impact and 21% reported a mild impact. Only 10% of business owners reported no impact from supply-chain disruptions.

The NFIB survey data is national data, but Quandt says she’s confident the numbers apply to Indiana.

“The numbers here are really across the nation, and they are really consistent no matter what state you’re in,” she said. “Indiana’s in a good position, but we’re still going to face some headwinds if we can’t solve some of these problems.”

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