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Help Wanted: Labor Shortage Affects Marine Businesses

You see the signs everywhere you go in Maine: “Help Wanted” or “Hiring Now.” Businesses in every sector of Maine’s economy have found it difficult to hire the number and type of workers they need, whether the business is a local restaurant or a major manufacturer. The problem has become acute in the businesses that supply lobstermen with their traps and other equipment.

“Sadly we’ve been calling customers to ask if they could live without new traps,” said Stephen Brooks, co-owner of Brooks Trap Mill in Thomaston. “We told them they could get them later or next year. Many cancelled their orders. I’ve been in this business all my life and I have never experienced anything like this struggle to get workers.”

The labor issue also is affecting marine businesses outside of Maine. Riverdale Mills, a wire mesh manufacturer in Northridge, Massachusetts, currently is advertising for everything from forklift driver to welding machine operator to keep its three shifts in production. The company is even offering new hourly employees a $700 hiring bonus.

Stephen Brooks and other Maine business owners are dealing with increased cost for materials and an acute lack of workers. MLMC photo.

“We’ve reached out to get workers back but some have just disappeared. Our production level is half or less than half of what it was last year,” Brooks added.

Maine’s Department of Labor took note of the labor shortage earlier in the summer and established the Back to Work grant program, which provided companies with funds to give bonuses to newly hired full-time and part-time workers. A full-time worker could receive $1,500 if he or she took a job and stopped receiving unemployment benefits for two months or more.

By late July, 100 companies had applied for grants to entice approximately 300 workers to fill empty positions, according to the Department of Labor. Given the broad range of companies seeking employees, however, 300 people employed appears to be a drop in the bucket.

Workers across the nation left or lost their jobs due the COVID-19 pandemic last year. In Maine, the unemployment rate shot up in early spring 2020, reaching 5.8% in June 2020. Many of those jobs were held by retail, hospitality, and manufacturing workers whose companies closed during the height of the virus in 2020 and during the surge this past winter.

With businesses fully reopened now and the unemployment rate at 4.8% in June, businesses are begging for additional employees.

“We stayed busy last year and were OK at the beginning of this year but things just kept getting worse,” Brooks explained. “Most lobstermen place their orders at the end of the year for next year. We had the orders and everything all scheduled out but then we started losing people. And it just never stopped.”

Many commentators point to the extra $300 in federal unemployment benefits that began in December, 2020, as the culprit in the current labor shortage. That amount, combined with state unemployment benefits, is thought to motivate people to remain unemployed because the total in benefits is greater than what they would receive once employed.

Others see a more complex cause for the acute labor shortage. James Myall at the Maine Center for Economic Policy at the University of Maine noted in a recent paper that Maine has long had a shortage of workers. “Maine’s prime working-age population (25-64 year-olds) peaked at just under 745,000 in 2006. Since then, that number has steadily declined to just over 703,000 in 2019, according to the US Census Bureau’s American Community Survey,” Myall wrote.

Those who lost their jobs may face new obstacles to getting back to work, among them childcare. According to the Maine Department of Health and Human Services, approximately 100 child care facilities closed during the COVID-19 pandemic, and the rest operated at reduced capacities. A survey by the U.S. Census Bureau in late May found that thousands of Maine parents were either out of work or working reduced hours because their child’s daycare or school was closed.

Freight costs are up, adding additional expense to many marine supplies. Image courtesy of Forbes.

Brooks, like many other business owners, has a limited number of options available to entice employees. “We try to have competitive wages for our employees plus health benefits which are equivalent to $3 per hour. Then there are bonuses and vacation time and holidays. If we raised wages for some, then we would have to raise them for all to be fair. But we don’t know how long we could sustain that. What happens in the long term?” he said. Currently the company pays each worker who comes to work as scheduled all week an extra dollar per hour for that week.

The Department of Labor estimates that as of June, the state had 25,100 fewer jobs than before the pandemic began. Yet the labor participation rate in the state remains low.

The labor participation rate is the percentage of the population that is either working or actively looking for work. In February 2020, that rate was 62.6% of the state’s population. In February 2021, that figure had dropped to 59.9%, rising to 60.2% by June. One of the reasons that the labor participation rate in the state is relatively low compared to other states is that so many in Maine’s population are over 65 years old. Older Maine residents are less likely than younger ones to be in the labor force.

Fewer people looking for work depresses unemployment figures. The Department of Labor states that “If participation in June was as high as it was 16 months earlier, the number of unemployed would be 26,400 higher and the unemployment rate would be 8.4 percent.”

Stephen Brooks is not only concerned about finding workers, he’s also deeply worried about the rising cost for the materials he uses in his business. “Everything we sell has increased in price at least once, sometimes up to five times. Literally everything in our traps costs more,” he said. A recent shipment of wire imported from overseas came with a whopping surprise: a $12,000 freight cost on top of the normal $5,000 fee. Some other containers which used to cost $5,000 for delivery are now $25,000 to $28,000 for freight. “It doesn’t matter where it comes from, whether its buoys out of Texas or wire from Italy,” Brooks said. “Our shipping costs are up to five times more than they were in the past, and some items aren’t even being shipped.”

Maine will end the extended federal unemployment benefits on September 6, which may lead to an uptick in job applicants. For Brooks, getting through the rest of the year without losing more customers is his primary worry. “There will be no new investments, that’s for sure. We’re going to hunker down and work through it. Summer is busy in most parts of Maine with seasonal jobs so we might see an influx of job seekers this winter. But it is a scary time,” he said.

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