A stifling worker shortage threatens Nashville's recovery

Friday, May 21, 2021, Vol. 45, No. 21

NASHVILLE (AP) — In downtown Nashville, honky-tonks rattle back to life, peddle taverns crowd the streets and bartenders can't pour fast enough.

The post-pandemic business boom arrived as expected. But one big, unexpected challenge stands in the way of a full recovery: There aren't enough workers to keep up with a national surge in demand.

"I'm working in the kitchen today," said restaurant and bar owner Barrett Hobbs, who ordinarily spends his days filing paperwork. "We don't have enough cooks to pull off a normal lunch, My family has owned businesses here since the '50s and none of us have ever seen anything like this."

Hobbs raised wages and offers incentives like sign-on bonuses and raffles for paid vacations, but still spends his days recruiting and troubleshooting problems around being understaffed.

He has lots of company.

There were 166,704 unemployed Tennesseans and more than 250,000 advertised jobs in April, state labor officials reported.

The nationwide worker shortage hasn't just left the hospitality and tourism industries short-handed at a crucial time. Many other industries lag well behind 2019 production and a quick fix is elusive.

Only a quarter of the number of expected hires were made across the country in April. The U.S. Department of Labor recorded 266,000 jobs added, well below the anticipated 1 million.

"We're nowhere near the pace we need to be," said economist Marianne Wanamaker, a University of Tennessee professor. "We are way behind predicted employment recovery."

The mismatch between available workers and economic demand is quickly driving up prices because consumer spending has held strong thanks in part to federal stimulus payments.

"If we don't get a faster pace of job growth, the Federal Reserve will have to raise interest rates before the end of the year," Wanamaker said. "They really don't want to do that but you can't let inflation go forever."


While the challenge is hitting industry leaders across the country, it's especially threatening to Nashville's thriving hospitality scene.

"It can have a more dramatic impact on our level of business because we rely on Southern hospitality as part of the charm," said Nashville Convention and Visitors Corp. CEO Butch Spyridon. "In New York, you don't necessarily expect over-the-top hospitality. But in Nashville you do."

Gov. Bill Lee announced last week that Tennessee would opt out of the weekly $300 federal unemployment boost July 3, phasing back to the standard $275 check-per-week in Tennessee.

Tennessee follows Montana, Alabama, Arkansas, Mississippi and South Carolina in refusing the cash. They expect it to motivate residents choosing not to go back to work because of the higher government payments.

"We have a quarter million jobs in this state that are unfilled," Lee said, in a statement. "And we do have employers all across the state who desperately need workers. We know that people want to work, and we want to make that pathway for them. We're working on a number of initiatives through our Department of Labor and Workforce, but we analyze the data and we think this is the right move for the state."

President Joe Biden led Democrats in condemning the move, saying the root cause is lack of childcare and health concerns.

"We'll insist that the law is followed with respect to benefits, but we're not going to turn our backs on our fellow Americans," Biden said, adding that he would incentivize businesses to rehire laid off employees and send payments to child care centers.

These political talking points belie a more complicated reality, economists say.


A confluence of challenges is slowing the return to work for many Americans.

School reopenings and daycares are on a different, often delayed schedule than most workplaces. Lingering uncertainty about health risks and job security are also prevalent. Many people moved during the pandemic to take advantage of less restrictive community rules or be closer to family. Others are still waiting for their pre-pandemic jobs to take them back full-time.

But the most challenging hurdle to overcome in the long term is the changing needs of workers and employers, said Laurel Graefe, senior officer of the Federal Reserve's Nashville branch.

"It's a mosaic of really complex factors driving folks to make decisions about which jobs to accept, and which roles employers will fill," Graefe said. "There seems to be a mismatch between the needs of workers and folks working fewer hours than they want to, and the needs of businesses."

Experts say the focus should be on job training and certification programs to prepare workers for an increasingly tech-centric world.

"We're in an economy that's transitioning rapidly," Graefe said. "I would like to see business investment in technology, innovation and human capital. Workers should make decisions around developing and supporting their skillsets."

The changes require an entrepreneurial mindset open to taking risks and thinking creatively, she said.

The pandemic laid bare the usefulness of unconventional work hours and methods such as working remotely.

"This past year has really shone a light on other elements of the economy where we have unrealized potential," Graefe said. "Are there folks who have caregiving responsibilities at home who need to work at nonconventional hours?"

Jenny Hunt hurries around a corner as she waits on patrons at Scoreboard Bar and Grill on Monday, May 17, 2021, in Nashville, Tenn.

In some cases, productivity needs are more straightforward.

Supply chain interruptions from business closures continue to stymie production.

The trucking industry is struggling to hire drivers quickly because the pandemic closed training facilities, creating a bottleneck now between need and available trained workers.

"We're running out of plastic cups," Hobbs said. "They don't have enough truck drivers out of Ohio."

Jack Cawthon, owner of Cawthon's Bar-B-Que restaurants, said he held onto most of his staff with competitive wages through the pandemic but is still hiring.

He's working to maintain employee morale in order to keep a high quality of customer service.

"We're spending time on employee training," Cawthon said. "We just want to make sure they're appreciating their customer because without them we won't need these jobs. We've got to live up to our name."