It has been two years since Gov. Kim Reynolds ordered many businesses to close just before the start of the coronavirus pandemic. Though the government-mandated restrictions are long gone, the impact of the disruption remains.
The beginning was riddled with the uncertainty of temporary closures, limited hours and social distancing requirements that effectively limited the capacity of many public-facing businesses. Now there are labor shortages and the increased costs of recruiting new employees, retaining existing ones and buying supplies.
“It’s been a crazy rollercoaster ride,” said Mariela Maya, owner of Panka Peruvian restaurant in Des Moines, which was open about a year before the pandemic hit.
The first few days were easier for Maya, who was able to reduce her restaurant staffing costs when takeout orders were the only option. Now that people are expecting to eat out, it’s difficult to find enough workers and the lunch rush has become more of a trickle with so many people still working from home. Her restaurant is on Ingersoll Avenue west of downtown.
“The workforce continues to be the thorn in the side of every company, small, medium and large,” said Joe Murphy, executive director of the Iowa Business Council, a group representing 22 of the state’s top employers. “We are still 84,000 fewer people employed than when the pandemic began.”
Getting these people to return to work has proven difficult. Those who stop caring for their children at home may still face the challenge of finding childcare or overcoming the disruption to their careers, Murphy said. It has pushed companies to increase their starting wages and rethink the way they recruit employees.
For example, Pella Corp., a major manufacturer of windows and doors, has invested in a 190-seat day care center in Pella, among other things. The aim was to make the city in southern Iowa more attractive for its workers.
“Iowa leads the country in having both parents working outside the home, so the need for child care is arguably more acute here in our state than in any other state,” Murphy said.
Small companies can be disadvantaged in this respect as they cannot offer their employees the same level of benefits as larger companies. That’s true of Ronald Carrillo, owner of a janitorial, pressure washing, and painting business called Multiservices R&M in Mount Pleasant.
Carrillo has 42 business customers and employs 14 people, but aims to expand.
“We don’t compete well with big companies, especially in (health) insurance,” said Carrillo. “That’s the number one thing that’s asked for.”
He has raised his starting wages for employees from $12.50 an hour to $14.
Maya, the Des Moines restaurant owner, is also having trouble hiring and retaining employees. Before the pandemic, she had envisioned opening a second restaurant, but over the past two years there have been moments when she considered closing it.
She joked to her employees, “I think I’ll sell the restaurant and work as one of you guys. It’s less stress and more money.”
Maya increased her starting wage from $13 an hour to $15 for dishwashers and from $16 to $19.20 for kitchen help, she said. Despite this, she has problems finding reliable employees.
Maya said she recently interviewed 25 people for multiple job opportunities. She hired five of them, but only one showed up for work.
“And she only survived a day,” Maya said.
Report requests to update the Small Business Act
Federal lawmakers should update their small business support programs in light of the pandemic and the tremendous changes that have occurred in the two decades since the Small Business Act was last majorly reauthorized, a recent report by the Bipartisan Policy Center Goldman Sachs 10,000 Small Businesses Voices concluded .
The legislation regulates the Small Business Administration, which specifically handed out forgivable loans to small employers if they maintained their workforce through the worst of the pandemic. But it could do more to provide business credit — particularly for non-white business owners — and make it easier for small businesses to secure government contracts, the report says.
It also said tax credits could help level the playing field for salaries and benefits offered by larger companies, and childcare should be addressed.
“When Congress last sanctioned the Small Business Administration, Amazon was best known as the world’s greatest river, and the iPhone was seven years away from launch,” said Perlla Deluca, owner of Southeast Constructors in Des Moines. “It’s imperative that Congress redefine the role the Small Business Administration can play in revitalizing America’s economy with modernized programs, by providing small business owners the support they need to thrive today — not that.” now seemingly old economy from 20 years ago.”