A 19-year-old fast food boss says he expects to lose half his staff in the next few weeks, as the labor shortage continues to hammer restaurants

A fast food restaurant manager wears a black t-shirt and baseball cap while sitting at a high table.
Cabrera said that he has matured quickly since taking on the general manager role.

  • Jason Cabrera, 19, is the general manager of Layne’s Chicken Fingers in Texas, earning $50,000 a year.
  • Cabrera said that his biggest problem is finding enough workers in the labor shortage.
  • He expects to lose 11 members of staff in the next few weeks as they go off to college, he said.
  • See more stories on Insider’s business page.

A 19-year-old manager of a Texas chicken restaurant told Insider that he expects to lose half of his staff in the next few weeks.

Jason Cabrera runs the Allen, Texas, branch of the Layne’s Chicken Fingers restaurant chain, which promoted teenagers to management roles because of a severe staff shortage. Cabrera, who earns a $50,000 salary, estimates that he’ll need to replace 11 of his 22 junior employees in the coming weeks, with many going off to college out of state.

The labor shortage was the biggest challenge he faces as the restaurant manager, he said.

Garrett Reed, CEO of Layne’s, told Insider in a separate interview that he would “usually have at least a handful of seasoned managers, people in their late-20s, early-30s” running his eight restaurants, but the labor shortage led him to promote three workers who are 18 or 19 to manager roles, including Cabrera.

Reed has found it “tough to compete” with places like Walmart and McDonalds, which can afford to offer higher wages, and many of his workers have left to join bigger companies, he said.

Read more: Leaked documents show how McDonald’s plans to win the 2021 chicken-sandwich wars. Here’s everything we know about the looming fast-food battle.

Cabrera took on the role a week after his 19th birthday in January.

He told Insider that he’s “huge on recruitment” and uses hiring service CareerPlug to find workers.

“I always refresh that page every day,” he said.

“I’m always looking for someone and there’s days I won’t get any, there’s days I’ll get five.”

In recent months, restaurants have struggled to find enough workers to keep up with customer demand, leading some owners to hike wages and offer large sign-on bonuses to entice employees.

Hiring appears to be picking up: Food services and drinking places added 194,000 jobs in June, accounting for more than half of all job gains in leisure and hospitality industries that month, per Labor Department data. However, three in four independent restaurants are still struggling for workers, according to a recent poll.

A fast food worker prepares fries for the deep fat frier in the restaurant kitchen.
Jason Cabrera told Insider that he expects to lose 11 members of staff in the next few weeks as they go off to college.

Cabrera insists a lack of staff has not led to a drop in standards. “I make sure when I do my interviews and whatnot, people know that I have high standards,” Cabrera told Insider. He said that he looks for staff who care about the quality of service, and work with urgency.

Cabrera’s annual earnings are far above the $9.50 per hour “learning wage” that Reed said his entry-level employees receive, and the $28,860 per year the average 16 to 19-year-old can expect to make in the US, per Labor Department data.

His salary doesn’t include any performance-linked bonuses general managers might receive at the end of the year.

Cabrera said that he has struggled in past jobs to be taken seriously due to his young age, but has embraced the responsibilities of his new role.

“Just knowing that anything that happens inside of that store is on me,” he said. “Anything that goes wrong, anything that goes right, it all comes back to me.”

Cabrera told Insider that he’s saving up so he can open his own Layne’s franchise. “I just want to see how fast I can get there,” he said.

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3 in 4 independent restaurants are still struggling to find staff, even as the hospitality industry adds hundreds of thousands of jobs, according to a poll

A server carries drinks to a table at P.J. Whelihan's restaurant and pub in Spring Township
Restaurants top Alignable’s list of┬ásmall business sectors that are still in the midst of the labor shortage.

  • Restaurants are struggling to find staff more than other small businesses, a poll found.
  • 74% of independent restaurant owners say it’s harder to find workers now than before the pandemic.
  • Four in five small businesses told Alignable that their supply costs are higher, too.
  • See more stories on Insider’s business page.

The leisure hospitality industry appears to be on its way to recovery after adding 343,000 people payrolls in June, making up 40% of total US job gains – but independent restaurants say they still can’t get enough staff.

Seventy-four percent of independent restaurant owners say it’s harder to find employees than it was pre-pandemic, according to a survey conducted by small-business network Alignable in the first half of July.

As a result, restaurants top the list of small business sectors that are still in the midst of the labor shortage, according to Alignable.

Read more: These 9 food tech startups are capitalizing on the labor crunch with tools that help franchisees hire or automate the restaurant workforce

The lack of available workers is having huge effects on some restaurants across the US. Some businesses have been forced to reduce their hours because they can’t get enough staff, and half said that they struggled to pay rent in May.

After restaurants, the transport sector was the second-worst hit by the current labor shortage, according to Alignable’s survey, with two-thirds of small business owners in the sector saying they’re struggling to find staff. This was followed by the automotive industry at 63%, manufacturing at 62%, and the beauty sector at 59%.

Overall, half of the 5,911 small business owners that responded to Alignable’s survey said it’s more difficult to hire now than it was before the pandemic.

The labor shortage is forcing businesses to push up wages and roll out better perks to attract more workers. In Alignable’s poll, 44% of small business owners said they were compensating their staff more than before the pandemic.

It’s not just wages that are rising. Inflation is pushing up the price of goods, too. Four in five small businesses told Alignable that their supply and inventory costs had risen. Just over a quarter said that these costs were up by more than 25%.

“It’s killing my profit and it’s about ready to cause me to close my doors permanently,” an unnamed small business owner in the construction industry told Alignable.

The owner of Brady’s Restaurant in Maine told Insider that her food suppliers were hiking prices and substituting some orders for different brands or quantities. She said that she wasn’t able to get pineapple juice for around three weeks, and that her supplier substituted an order for 8-ounce burger patties with 2-ounce ones. Because of the ingredient shortages, she’d been forced to cut the restaurant’s opening hours, she said.

Businesses can get around the higher costs of goods and staff by putting their own prices up – but small businesses are reluctant to make big price changes, the survey shows. Forty-one percent of small businesses said they raised their prices during the pandemic, but only 7% had raised them by more than 25%.

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The US economy could have 28 million more jobs over the next decade than the federal government thinks

Now Hiring Sign
A pedestrian walks by a now hiring sign at Ross Dress For Less store on April 02, 2021 in San Rafael, California.

  • The US could reach even higher than expected levels of full employment over the next decade.
  • A new paper from the Roosevelt Institute finds the employment-population ratio could be 68% by 2031.
  • To do this, the authors looked at gaps in employment by race, gender, and education.
  • See more stories on Insider’s business page.

As the US continues to recover from the pandemic, a new paper finds the number of Americans with jobs could potentially eventually be far higher than before the crisis took a toll on workers and businesses.

The Roosevelt Institute just released a paper that looks at what full employment could look like in a decade by looking at how much additional job growth is needed to close gaps by age, race, education, and gender.

Based on their research, the authors find the employment-population ratio could be 68% by 2031, higher than ratios reported since 1948. The authors note this is about 10 points higher than the Congressional Budget Office’s projections of maximum employment.

Closing the employment gaps for race, gender, and education could mean the US reaches 190 million workers by 2031, or about 28 million more jobs than CBO’s projections, the authors found.

“Moving toward true full employment will have tremendous benefits – not just more growth, but a more equal economy,” Lauren Melodia, deputy director of macroeconomic analysis at the Roosevelt Institute and one of the authors, said in a press release. “With strong public investment, we can greatly reduce the employment gaps between Black and white workers, women and men, and those with more and less formal education.”

“If full employment means that everybody who wants to work and is able to work has a job, we were very far from that in 2019. And that suggests that we potentially have space for much faster growth if we can sustain demand over the next decade than a lot of people are expecting,” J.W. Mason, a fellow at the Roosevelt Institute and one of the report’s authors, told Insider. “So the larger story here is the possibility of a real historic boom in the coming years.”

The employment-population ratio took a hit during the pandemic, reaching a record low of 51.3% in April 2020 as people left the labor force or had their jobs cut. The ratio is now back up to 58.0% as of June 2021, still below pre-pandemic rates.

But the new paper argues that there needs to be “sufficient demand” to help get more Black Americans, women, and less-educated Americans into jobs and to reach full employment.

For example, take the employment gap over time for Black and white workers. The authors write that gap widens during recessions but narrows during tight labor markets.

“Because less-favored groups – Black workers, women, those with less formal education, those just entering the labor market – are generally last hired and first fired, the gaps between more- and less-favored groups vary systematically over the business cycle,” the authors wrote.

There aren’t enough jobs for everyone, Mason said, so some people don’t get hired while some are more “systematically favored in the labor market,” making it harder for some Americans to get hired even if they’re a qualified candidate.

“The data shows employment prospects for disadvantaged groups are more dependent on labor market conditions than for more privileged groups,” the authors wrote. “Employment gaps by age, education, and especially race are strongly responsive to current labor market conditions, as reflected in the unemployment rate.”

The unemployment rate for Black workers is 9.2% and 5.2% for white workers as of June 2021. Right before the pandemic, the difference between these two unemployment rates was three percentage points.

“When there aren’t enough jobs to go around, the people at the front of the line get hired and the people at the back of the line don’t,” Mason said. Historically, this includes Black Americans, women, and less educated workers. Mason notes we also need to improve childcare to get women back in the labor market, as care disproportionately falls on women.

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Some restaurants are temporarily closing because they can’t find enough workers. One said diners have gotten ruder amid the labor shortage and even made staff cry.

server at a restaurant in California
Some restaurants say the worker shortage is making it harder for them to pay rent.

  • Some restaurants are temporarily closing or cutting their hours because of the labor shortage.
  • One opened for an hour less each day after staffing fell by nearly 50% compared with normal years.
  • A third of former hospitality workers said in a Joblist poll that they won’t return to the industry.
  • See more stories on Insider’s business page.

Some restaurants are cutting down their opening hours or temporarily closing for days on end because they simply can’t find enough workers to serve diners, amid the huge labor shortage hitting the hospitality industry.

One even shut down for a day after rude diners swore at staff and made them cry.

Central City Tap House in Kalamazoo, Michigan, said it was closing its doors “until we can find a full enough roster in our kitchen to re-open to our customers,” and urged people to apply for jobs at the company, Fox 17 first reported.

Fisher Lake Inn in Three Rivers, Michigan, also shut down Thursday and Friday “due to a staff shortage,” it said on Facebook.

“I’m about 80-85% staffed up for my summer season, so we are making it work,” Jeff Trickey, the restaurant’s owner, told Fox 17. “Periodically though, staff can’t work, and if I don’t have enough staff to operate the business then I can’t open.”

Read more: These 9 food tech startups are capitalizing on the labor crunch with tools that help franchisees hire or automate the restaurant workforce

Restaurants in Astoria, Oregon, were also forced to slash their operating hours after struggling to find enough staff, according to a report by The Astorian. This includes the Bridgewater Bistro, which closed its restaurant Tuesdays and Wednesdays, as well as between 3 p.m. and 4 p.m. on other days, to give current staff a break after it couldn’t find enough new cooks, servers, and dishwashers.

In Boothbay Harbor, Maine, Brady’s Pub and Taka Mediterranean Bar and Grill are also closing two days a week at what should be their peak season, while nearby seafood restaurant McSeagull’s shortened operating hours by an hour each day in the spring after its staffing fell by nearly 50% compared to normal years, The Boothbay Register reported.

One restaurant in Brewster, Massachusetts, even shut down for a “day of happiness” last week after rude diners swore at staff and made them cry.

Brandi Felt Castellano, co-owner of Apt Cape Cod, told The New York Times that diners seemed unprepared for the longer wait times and limited menus associated with the current staffing and supply shortages.

But not all the rudeness was caused by the labor shortage, Felt Castellano said. She told The Times that one group of diners threatened to sue the restaurant after they didn’t get the specific table they had requested.

Another customer got angry at a young employee who told him they could not take his breakfast takeout order because the restaurant hadn’t opened yet.

One in 3 former hospitality workers don’t want to return to the industry

The US is suffering from a severe shortage of workers which the US Chamber of Commerce has called a “national economic emergency.”

Joblist CEO Kevin Harrington told Insider that hospitality workers are leaving the industry “in droves,” in search of better pay and benefits. A third of former hospitality workers said in a Joblist poll that they wouldn’t return to the industry, and Harrington said that is primarily driven by people in entry-level, hourly-paid, and customer-facing jobs.

Some are hiking up wages because of the shortage, which is pushing menu prices up. Some restaurants say the worker shortage is making it harder for them to pay rent, too.

The Federal Reserve said the labor squeeze could last months – but Bank of America expects the job market to recover by early 2022.

Read the original article on Business Insider

Papa John’s is giving its pizza makers bonuses of up to $400, as restaurants cling onto staff in the labor shortage

FILE PHOTO: The Papa John's store in Westminster, Colorado, U.S. August 1, 2017.  REUTERS/Rick Wilking
The Papa John’s store in Westminster

  • Papa John’s is handing out bonuses of up to $400 to many of its employees.
  • Existing staff can get up to $400 in increments, and $50 for referring a new hire.
  • Staff at corporate-owned restaurants are eligible. It didn’t say how it would decide exact bonus amounts.
  • See more stories on Insider’s business page.

Papa John’s is paying bonuses of up to $400 as the restaurant industry scrambles to retain workers amid a huge labor shortage.

About 14,000 staff at company-owned restaurants, and in its supply chain, can get up to $400 paid in increments over the next six months. Papa John’s didn’t say how it would decide how much each staff member gets.

It’s also rolling out referral bonuses to recruit more staff. Staff can get $50 for each new hire they refer to the company – and new starters can get a $50 hiring bonus, it announced Thursday.

The bonuses apply to staff at the chain’s nearly 600 company-owned restaurants, which represent nearly a fifth of its restaurants in North America, alongside its quality control centers (QCC). Across the corporate restaurants and QCCs, Papa John’s employs about 14,000 people.

Read more: These 9 food tech startups are capitalizing on the labor crunch with tools that help franchisees hire or automate the restaurant workforce

The pizza chain said the staff benefits it introduced during the pandemic were now permanent. These include expanded health, wellness, paid time-off, and college-tuition benefits.

Papa John’s said that its bonuses, alongside extra investment in full-time staff at its higher-volume company-owned restaurants, would cost it around $2.5 million by the end of 2021.

“The incredible hard work and commitment of our team members, which powered Papa John’s tremendous performance and transformation over the past 18 months, is just as important to our sustained long-term growth,” Rob Lynch, CEO of the pizza chain, said in a statement.

“Similar to programs being offered by our franchisees, these new bonuses for our team members in our corporate restaurants and quality control centers reflect the value we place on growing, retaining, and supporting our dedicated team.”

The US is suffering from a severe shortage of workers, and restaurants have been especially hard hit, with a third of former hospitality workers saying in a Joblist poll that they won’t return to the industry.

The US Chamber of Commerce has called the national labor shortage a “national economic emergency” and warned it could hold back the recovery from the pandemic.

Together with rising ingredients costs, the labor shortage is pushing menu prices up at some restaurants. Some are struggling to pay rent.

Fast-food chains are trying perks to attract new hires and to cling onto existing staff. One McDonald’s restaurant said it would give iPhones to new hires while another handed out $50 to anyone who showed up for an interview. The company is also raising wages in its corporate-owned restaurants by an average of 10%.

The Federal Reserve said that the labor squeeze could last months – but Bank of America expects the job market to recover by early 2022.

Read the original article on Business Insider

Remote jobs in the US are becoming accessible to more people, with a growing number of postings not requiring a college degree

remote work
More workers are re-evaluating their careers following the pandemic.

  • 4% of US job postings in May were for remote roles not requiring a college education.
  • According to LinkedIn data, customer service and admin roles are going remote.
  • The uptick reflects greater desire for working remotely globally.
  • See more stories on Insider’s business page.

The number of remote roles that don’t require a college education has increased.

In May just under 4% of all US job postings were for remote roles that don’t require a college education. This figure is up from 0.6% of all roles for the same period last year, according to LinkedIn data.

Some of the roles that have proven most popular among applicants include customer service representative, salesperson as well as administrative and data entry roles.

The trend reflects a general rise in the availability of remote roles since the beginning of the coronavirus pandemic.

Adverts for roles requiring a college degree also rose in the US, from 2% last year to 7% in May, according to the findings.

On a global scale the share of remote jobs posts grew 2.4 times between May 2020 to May 2021, Mariano Mamertino, EMEA Economist at LinkedIn told Insider. Job posts labelled as remote or that include keywords such as “work from home” now represent 14% of all job posts.

“This comes as companies rethink how they operate in the future and increasingly look to offer employees greater flexibility which many crave after the past year and a half of working remotely,” said Mamertino.

More people want to work from home and it is easier for them to do so

The rise of services like Zoom and Slack has allowed people to easily adapt to working remotely.

There has also been a growing acceptance among employers that people are able to work remotely, and that many want more flexibility from their job roles.

A Microsoft survey from March found that 73% of employees wanted flexible remote options following their pandemic experience. Some 40% said they were considering changing roles, and 46% of those said they were planning to move now that remote work was a possibility – admittedly many of these respondents hold a college degree.

Some industries in the US – including hospitality and ride-hailing apps – have been struggling to fill vacancies for months, a situation the US Chamber of Commerce labelled as a “national economic emergency” in a June report.

According to latest figures from the Bureau of Labour Statistics, 3.6 million Americans voluntarily left their jobs in May, a trend fueled by a mixture of stronger out-of-work benefits and the fact that people are reassessing their careers or retiring after the pandemic.

While it’s possible that some remote jobs will revert back to in-person roles, Mamertino says that for many the shift to remote will be permanent.

“With companies across every industry considering their future workplace policies, the changes implemented will impact workers at all levels, giving more people greater flexibility than they have ever had before.”

Read the original article on Business Insider

A Disney dancer, a chef, and a bartender quit their jobs to become software developers. They say it offers flexible working and better security during uncertain times.

Aaron Kolatch bartender making dr
Before the pandemic, Aaron Kolatch had been working as a bartender in New York City. He’s now looking for a job in software development.

  • Three workers told Insider why they started new careers in software development during the pandemic.
  • A former bartender said the pandemic made him realize how little time he spent with his wife.
  • An ex-chef still does part-time restaurant work to “scratch that itch” to work in a kitchen.
  • See more stories on Insider’s business page.

Massive lay-offs, remote working, and caring responsibilities have forced thousands of Americans to consider switching their careers during the pandemic.

Some were forced out of their roles because their employers downsized or even shut down during the pandemic. Others have been “rage quitting” in search of better pay and conditions.

People were suffering from work fatigue too, according to Shaun McAlmont, president of career learning at lifelong-education company Stride. The pandemic gave people the opportunity to change “their entire work circumstance,” he said.

Read more: The 22 best side hustles to start that could earn you 6 figures or more, and how to get them off the ground quickly from experts who have done it

Insider spoke to three workers about why they swapped their jobs in the hospitality and entertainment industries to get into software development during the pandemic.

Melanie Anderson wears a green blouse while smiling at the camera
Melanie Anderson decided that she wanted a job with security.

The Disney dancer

Melanie Anderson had been working at Disneyland in Anaheim, California, as a parade dancer, and her career path was “pretty much set.”

Then the performing-arts sector collapsed during the pandemic, and it became clear she needed to look for other options.

So she enrolled in a bootcamp from Tech Elevator, which consisted of live remote classes alongside careers support.

After graduating in February 2021, she was “at a crossroads again” because the vaccine rollout had given her hope that the performing-arts sector would bounce back. But she wanted a job with security – and started working for the American Automobile Association (AAA).

Anderson said mass layoffs and furloughs across the industry had forced former colleagues to make career changes, too. Some taught classes online, while others got retail jobs or made their side jobs full-time.

Anderson said she hoped to return to performing arts part-time: “In their hearts, everyone is very much hoping for the performing arts to come back.”

The bartender

Before the pandemic, Aaron Kolatch had been working as a bartender in New York City, most recently at the NoMad Hotel in Brooklyn.

“I made a really good living as a bartender,” and was “hyper-qualified” in the industry, he said.

But he had got married in December 2019, and found his job at odds with married life. He told Insider that he worked evening shifts and often went to bed at 4 a.m. – making it difficult to spend time with his wife, who worked in an office.

“When all the bars in New York shut down, it was probably the first time in the five years we’ve spent together that I’d actually got to see her on a day-to-day basis,” he said.

“I think a lot of people in hospitality for the first time got to experience what the rest of the world experiences.”

When lockdown first started, Kolatch looked into alternative careers, and stumbled upon software development while learning how to modify a video game.

He decided to sign up for Hack Reactor‘s bootcamp. He’s now looking for a job in software development while working for Hack Reactor.

The pandemic “made it easier than it would have been” to switch careers, Kolatch said.

Drew Hall next to his computer
Drew Hall, a chef turned software developer.

The chef

Drew Hall had worked in the restaurant industry in Philadelphia for 18 years, including 10 as a chef, before the pandemic struck.

He sometimes worked 80 hours a week, and had even missed vacations and weddings for work, but said: “I loved what I did, even the hours.”

Hall had considered changing jobs before the pandemic, but wasn’t sure how he’d find time to return to education.

But his restaurant shut down during the pandemic and he had “tons of time” to take part in Tech Elevator’s bootcamp.

Hall now works as a software developer for PNC, but spends three days a week working as a butcher at a restaurant. “It scratches that itch that I have to still be in a kitchen,” he said.

He has no regrets about switching careers and is already planning three summer trips.

Read the original article on Business Insider

Teenagers aren’t taking all the jobs anymore

A restaurant worker wears a facemark while holding a tablet to take customer orders.
A Texas-based restaurant chain has promoted young workers to manager roles amid a labor shortage.

  • Teenage employment in June dropped close to pre-pandemic levels, after trending higher in the spring.
  • This suggests they won’t be taking as many jobs this summer as they did in the spring.
  • Workers in industries largely staffed by teenagers, like restaurants, are hiring more, at higher wages.
  • See more stories on Insider’s business page.

While the June jobs report exceeded expectations, adding 850,000 payrolls, it also blew up a developing narrative that teenagers were helping solve the country’s labor shortage.

According to Bureau of Labor Statistics data, teen unemployment rates in April and May were at 12.3% and 9.6%, respectively, signaling that in the spring, teenagers were jumping into the labor force. But the unemployment rate for the 16-19 age group sat at 9.9% in June, suggesting the trend might not continue throughout the summer.

The New York Times economics reporter Ben Casselman wrote on Twitter that in the spring, teen employment was well above pre-pandemic levels, but with their employment level in June fairly close to the pre-pandemic level, teens likely won’t be boosting labor supply.

The following chart shows employment for 16 to 19 years old in May from 2015-2021:

The following chart shows employment for 16 to 19 years old in June from 2015-2021. Employment in June 2021 seems to be similar to levels seen in 2019.

US business owners have been flocking to hire teens amidst a labor shortage, according to a Wall Street Journal report in early June, as teen unemployment rates in the US were at their lowest level since 1953 following the May jobs report, and the number of teens in work had reached the highest rate since 2008.

The labor shortage had given teens the opportunity to cherry-pick for the best-paying jobs. As Ric Serrano, CEO of Serrano’s Mexican Restaurants, told the Journal, “It’s a perfect storm for them.”

Another restaurant owner, Ben Eli – who owns Doris Metropolitan steakhouses in Houston and New Orleans, told the Journal that he had been significantly struggling to find workers, and he’s only been able to hire teens.

“I’ve never seen anything like this,” he said. “They are 100% of my staffing right now.”

Employees are definitely coming back to work, though, and restaurants may not have to rely on teenagers to keep service afloat. June’s jobs report revealed a 343,000 payroll gain in just the leisure and hospitality sector, largely thanks to increased wages for those workers in the industries that teenagers had mainly staffed.

And President Joe Biden saw this as a promising sign moving forward in economic recovery.

“More jobs, better wages – that’s a good combination,” Biden said during his remarks on Friday. “Put simply: Our economy is on the move, and we have COVID-19 on the run.” While this may be true, teens may not be leading the charge after June.

Read the original article on Business Insider

Southwest will pay flight attendants double overtime as it struggles with a staffing hole over the July 4 week

A gate agent wears a Southwest Airlines mask
A Southwest Airlines agent in Los Angeles.

  • Southwest is paying some staff double for overtime shifts in the first week of July, CNBC reported.
  • The airline said the extra pay would boost staff levels and reduce the number of flight disruptions.
  • Demand for travel is rebounding fast but the aviation industry faces a staffing shortage.
  • See more stories on Insider’s business page.

Southwest Airlines is doubling overtime pay for some staff over the July 4 week as it eyes a huge bump in travel, CNBC reported.

Flight attendants, ground-operations agents, and cargo agents will earn double for picking up extra shifts in a bid to avoid disruptions over the Independence Day weekend, per CNBC.

Demand for travel is rebounding fast as the US economy reopens but the aviation industry faces a staffing shortage after letting too many pilots and flight attendants go during the pandemic.

Meanwhile, Southwest has been hit by a series of flight disruptions caused by technical problems and bad weather. It delayed nearly 4,000 flights and canceled hundreds more over a three-day period in mid-June because of a glitch in weather data and a computer-system outage. It also canceled hundreds of flights over the weekend and Monday after airports were hit by severe thunderstorms.

Read more: Forget flying commutes – these aviation startups are taking off by moving cargo by air

In a memo to staff Monday, reported by CNBC, Alan Kasher, executive vice president of daily operations at Southwest, said: “We have heard from many of you who are frustrated with our network reliability and irregular operations created by summer storms across many parts of the country.

“To address the situation for the short term, we will be incentivizing our Ops Employees during this busy holiday travel week by increasing overtime pay from July 1 through July 7.”

Flight attendants will get double pay for picking up open shifts over that week, Sonya Lacore, vice president of inflight operations at Southwest, wrote in a separate staff memo Monday, per CNBC. A spokesperson told the publication that ground and cargo operations staff would also get double pay for overtime shifts.

Southwest did not immediately respond to Insider’s request for comment.

The Transportation Security Administration screened 2,066,964 passengers on Monday – 84% of the number it screened on the same day in 2019.

But Southwest is struggling to find enough staff as demand for flights returns. As well as doubling overtime pay, the airline is bumping up its minimum wage to $15 later this year, which it said would boost paychecks for around 7,000 staff.

Still, some pilots who were on leave during the pandemic have yet to be retrained before they can return to work.

“We have about 900 pilots who are coming back from extended time off that are being trained in June and July and we’ll probably slip into August,” Casey Murray, president of the Southwest Airlines Pilots Association (SWAPA), told WFAA.

“We have the pilots,” he said. “We just don’t have the pilots trained currently.”

SWAPA told members Monday that Southwest had also offered double pay for pilots during the July 4 week, which it called “inadequate”. The union said that it had not come to an agreement with the airline on pay, CNBC reported.

“It has been clear (since spring!) that our operation was on track for a brutal summer caused by overselling a schedule that they absolutely cannot fill,” SWAPA told members.

“This [July 4] weekend coming up is going to be a true test for the entire breadth of Southwest Airlines,” Murray told WFAA.

Read the original article on Business Insider

Only about 2 out of 10 people are leaving unemployment for work. It should be at least 3 out of 10, former Obama economists say.

now hiring
A car drives by a ‘now hiring’ sign that is posted outside of the soon-to-be-open Marin Ace Hardware store on November 30, 2011 in San Rafael, California.

  • Former Obama economists Jason Furman and Wilson Powell III said only 24% of the unemployed are returning to work.
  • One would predict 34% would return, they wrote, resulting in 1 million more unemployed finding jobs per month.
  • They said the shortfall is likely temporary and comes down to unemployment benefits and health concerns.
  • See more stories on Insider’s business page.

As the economy is beginning to recover from the pandemic, there’s a record number of job openings, but that’s not the big story, former Obama economists wrote in a paper released Monday.

The big news is that so many of the unemployed are exiting unemployment, but not for jobs. That isn’t normal.

Jason Furman, chair of the Council of Economic Advisers under President Barack Obama, and Wilson Powell III, former research economist at the council, released a paper for the left-leaning Peterson Institute, looking into the unemployed who aren’t returning to work despite a record number of job openings. It found that since September 2020, transition from employment to unemployment has been lower than the norm, most recently at 24%.

Based on the historic relationship between job openings and the transition from unemployment to employment, they wrote, about 34% of the unemployed in April 2021 should have transitioned to employed in May 2021, resulting in 1 million more unemployed people finding jobs per month.

“This is notable because normally one would expect the transition rate from unemployment to increase as more jobs became available, as measured by the job openings rate,” Furman and Powell wrote. “In fact, the current transition rate is closer to what one would expect with an openings rate of 3 percent, only about half of the current openings rate.”

The economists added that “at the very least, there is no reason the transition rate should not be around, say, 29 percent, the 80th percentile of its historical value.” At that level, an extra 500,000 people would have transitioned from unemployed to employed each month.

So what are the causes of this shortfall?

Insider previously reported that President Joe Biden’s $300 weekly unemployment benefits could be disincentivizing the return to work, although COVID-19 health concerns, lack of childcare, and workers holding out for higher wages can’t be discounted as other factors.

Furman and Powell wrote that the low transition rate is likely temporary, thought. Similarly, Insider’s Ben Winck has reported on the potential benefits of the record number of people quitting jobs, suggesting a future of higher wages for workers and increased productivity.

“The good news is that most of the factors holding back transitions from unemployment are probably temporary, and if the rate at which people are leaving unemployment for jobs returns to what would be expected given the overall strength of the economy, the pace of job growth could rise to 750,000 or more a month,” Furman and Powell wrote. “There may be a speed limit on job growth, but it is likely to be well above the recent pace.”

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