Tahoe businesses struggle amid nationwide employee shortage
Tahoe Daily Tribune
SOUTH LAKE TAHOE, Calif. — Since closing their restaurant doors in March 2020 with the onset of COVID, Thai on Ski Run owners Oliver and Thanya Starr have not been able to get back to fully operational.
Their dining room remains shuttered, while Thanya works 80-hour weeks to keep up with take-out orders with a skeleton crew. Despite raising wages and offering housing for their kitchen workers, the couple can’t hire enough employees to fully reopen their South Lake Tahoe restaurant.
“This has substantially impacted our business,” says Oliver. “We can’t reopen our dining areas or offer table service because we can’t support it. Further, we’re typically at least an hour out for orders once the dinner hour starts as a result of failing to have the people we need,.
With a shortage of 8-12 employees, the restaurant now closes two days a week and between lunch and dinner to catch up on other work.
“We don’t have applicants and we have people simply not show up after being hired,” adds Oliver, who points to limited and expensive housing and the enhanced unemployment benefits as issues impacting the labor shortage in Tahoe. “We hear quite a few people saying they’re going to sit on the sidelines until their benefits drop in September.”
Across the United States, businesses are struggling to staff back up to pre-pandemic levels. Though 9.2 million job openings are available, the unemployment rate was relatively unchanged at 5.9% in June, the U.S. Bureau of Labor Statistics reported. Though certainly down from the recent highs of April 2020, 9.5 million people remain unemployed, well above the pre-pandemic levels of 5.7 million unemployed, or 3.5% unemployment, in February 2020.
Experts point to the weekly $300 unemployment benefits set to expire on Sept. 6 as disincentivizing people from returning to work, virus-related health concerns, pandemic-inspired career changes, a lack of childcare, and workers holding out for higher wages as potential reasons for the nationwide labor shortage.
Around the lake and its surrounding communities, business owners are feeling the impact as help wanted ads remain unanswered and interviews unattended.
Jason Derrer, owner of Raptor Pest Control in Minden, says he is months behind due to employee shortages.
“We’ve offered so much to try and get new recruits, however, even though we set up and confirm interviews, 90% don’t even show up,” says Derrer, illustrating a tactic some use to show they are still job searching in order to stay on unemployment.
It’s a familiar experience for Eric Roe, general manager at the Crystal Bay Casino, which recently shut down their Steak and Lobster House completely due to staffing shortages.
“They apply and you can never get ahold of them again. There have been a couple of occasions where they make it through the interview and we offer employment, but they don’t return phone calls,” says Roe. “As a property, we are about 40 people shy of our general July/August numbers.”
It’s a problem spanning all industries in Tahoe. At Sierra Tahoe Dental, Dr. Robert Rutner has not been able to hire enough dental hygienists to meet the needs of his practice.
“This causes us to have to limit our business because that’s our pipeline for dental treatment. It’s greatly affected our business,” says Rutner, adding that he now is forced to use people that work one or two days a week and temporary workers.
April Vadnais has owned Elements Day Spa in South Lake Tahoe for 15 years, but with only a couple employees working each day and massage rooms sitting empty as she turns away business, she may be forced to sell — or even just shut the doors for good.
“When I started out I had 12-14 people working for me and people dropping off resumes a couple of times a month. Now I have five people and literally no applicants on the horizon,” says Vadnais. “I’ve raised prices so I can raise wages. I’ve offered incentive bonuses. I’ve reached out to the school in Carson Valley for new graduates. I’ve exhausted every avenue I can think of.”
Vadnais has even heard of people attempting to poach employees from other businesses while they are working by offering a dollar or two more an hour than they currently make.
But raising wages has not seemed to help combat the issue that sets Tahoe’s employee shortage apart from much of the nation: limited housing and high rents compared to the average wage. A seller’s market has also resulted in the displacement of many renters as property owners take advantage of the high prices and frequent cash offers from out-of-town buyers.
Jen Stakich, chef and owner of Fuddhism in Truckee, opened in February 2021 and has struggled to keep her new restaurant running with a limited staff.
“Jobs that used to go for $18-$20 an hour are going for $22-$25 an hour. Our industry doesn’t have margins big enough to support that,” explains Stakich. “My goal is to continue to be known for being a good place to work where people are really respected and where we pay people decent living wages for this town, but I’m not sure that I can do that and be profitable.”
Labor costs amounting to 50% rather than the target 20-25% aren’t sustainable, especially during the shoulder season, she notes. Nor are the 16-hour days she’s working to make up for the employees she’s missing.
Despite offering higher wages, Stakich says she has an employee living in his car and another with a long-term reservation at a campsite sleeping in a tent.
“I don’t think it’s a simple problem, and I don’t think it has a simple solution,” adds Stakich.
The employment shortage is an issue that the Lake Tahoe South Shore Chamber of Commerce hears from members about regularly.
“I think a lot of it has to do with the cost of housing. A lot of people who were working here were asked to leave their rentals because the property owners were selling the home or using it themselves. It’s been a huge factor,” says Steve Teshara, CEO of the Tahoe Chamber. “People were working here or wanting to work here and now don’t have a place to live.”
Women, who make up a large portion of the jobs in the hospitality industry, were also often put in a difficult situation when schools turned to online learning and childcare became a barrier for work, adds Teshara.
“The housing situation is a really long term challenge because even an expedited [affordable] project like Sugar Pine Village [in South Lake Tahoe] takes a couple of years to get through the process, get constructed and be available,” Teshara said.
The 248-unit project near the “Y” was approved in just six months and is currently pursuing financing. The state of California selected Related California and Saint Joseph Community Land Trust to develop the project under Gov. Gavin Newsom’s executive order promoting affordable housing development. The project is expected to break ground in 2022.
And with the Tahoe Regional Planning Agency poised to adjust its development code to remove barriers for developing affordable housing, there is certainly momentum towards addressing the housing crisis in Tahoe. But the question remains whether these solutions will come in time to help Tahoe businesses as they struggle to stay afloat with limited employees.
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