In some circles, the small business community’s call for help in hiring has been met with a familiar refrain:
“Just pay more. Problem solved.”
Unfortunately, those who think the solution is that simple aren’t seeing the full picture, said NJBIA President and CEO Michele Siekerka.
“What many people don’t realize is that most small business owners, in fact, do want to pay more to be competitive and to have the best workers for their products and services,” Siekerka said. “They pay what they can and those that can afford to pay above the minimum wage do.
“However, every business model has a budget that is based on competitive pricing – and with that comes obvious limits on what they can afford to pay their employees, absent raising prices, decreasing overall positions or cutting back other benefits, if offered. Every business is different, but no one goes into business to lose money or to dip into personal savings to survive.”
Siekerka said many smaller businesses are even more vulnerable to higher wages after their bottom lines were impacted by over a year of shutdowns and restrictions.
At the same time, others are raising their wages and offering incentives – only to find that their jobs remain open.
In a New Jersey Business Coalition town hall on Monday, Bhavesh Patel, chairman of the New Jersey Restaurant & Hospitality Association, said some hotels are paying up to $20 an hour for housekeeping jobs and $25 an hour for front-desk jobs and “we still can’t get workers to come in.”
In an NJ.com story this week, multiple business owners explained how they were unable to hire enough workers, with many candidates requesting to be paid under the table as they collected an additional $300 from the federal unemployment insurance program.
To address that, Siekerka has led the call for Gov. Phil Murphy to take a different approach. She has suggested considering a lump sum payment upfront for individuals returning to work now, and tax credits to those businesses who are struggling to raise wages to be more competitive.
“The federal program ends in September,” said Siekerka. “That’s going to be too late for many small businesses who are entering what should be their peak season.”
