Summer Worker Shortage Means Things Will Be Closed. Again.

The shortages push up labor costs, adding to inflationary pressure on items including airfares and beach menus. That could hold back consumer spending, the engine of the U.S. economy.

The scarcity of available workers first emerged a year ago as Covid-19 vaccinations became available, businesses reopened and the economy rebounded. Many economists said more workers would join the labor force and fill open roles as Covid-19 fears eased and pandemic-related government stimulus faded. Now, shortages are not only persisting, in some cases they are deepening, at a crucial time for many businesses that depend on a summer boom.

Two key factors are at play. First, employer demand for workers remains red-hot, with job openings double the number of unemployed individuals looking for work. Second, workers continue to switch jobs and quit lower-wage industries including restaurants at high rates, leaving businesses scrambling to fill vacant positions, economists say.

People are quitting and jobs are going unfilled at higher rates than before the pandemic, especially in low-wage and seasonal industries such as recreation and accommodation.

Quits rate vs. job-openings rate, by industry

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation and food services

Arts, entertainment and recreation

Industry’s rates

higher than

total nonfarm

Accommodation and food services

Arts, entertainment and recreation

Industry’s rates

higher than

total nonfarm

Polar Cave Ice Cream Parlour in Mashpee, Mass., a Cape Cod town, is struggling to find workers to scoop its dozens of ice cream flavors, including the shop’s popular Death By Chocolate.

“We knew we were going to have a busy summer. But no employer that I know—and I know lots of them—could’ve dreamt that it’s like, ‘what, no one is applying?’ ” said Mark Lawrence, owner of Polar Cave. “When you think it can’t get worse, it just gets worse.”

On a warm weekend in mid-May, customers waited in line for roughly 45 minutes because Mr. Lawrence didn’t have enough workers to call in for additional help. “Which is scary for what’s to follow,” he said, referring to his peak summer season, which starts in June. “If it was like this now, what’s it going to be like when school is out and people are coming for their summer vacations?”

The summer economy has a rhythm of its own. With roughly 30 million workers and creating about 10% of U.S. gross domestic product, it runs from June to August when most Americans take breaks from work and school. It’s especially dependent on sectors such as restaurants, hotels and summer camps that are having a particularly hard time filling jobs.

This year’s expected shortages are likely to cause frustration for consumers confronted with limited services, waiting lists and higher prices. At the same time, workers, especially those with limited skills who traditionally fill summer jobs, are likely to have multiple options and receive higher pay.

Brewster Fish House in Cape Cod, typically open seven days a week during the summer, is struggling to stay open for five due to labor shortages, the restaurant’s owner Vernon Smith said.

Demand is strong, he said, for the restaurant’s cioppinos, lobster bisque and fish and chips, in part because many second homeowners have been working remotely from Cape Cod during the pandemic. But there aren’t enough workers to fill roles such as line cooks due to limited affordable housing in the area, Mr. Smith said. And many of the people who respond to the restaurant’s job advertisements don’t follow up or disappear, a practice known as ghosting.

“They say they’re going to come for an interview and then they just never show up,” he said.

Restaurants and bars have brought back many of the jobs lost earlier in the pandemic. But employment in the sector is still 6.4% below February 2020. Meanwhile, demand is hovering near prepandemic levels, according to OpenTable restaurant reservation trends.

Foreign-worker interest in U.S. summer jobs is higher than in previous years, according to jobs site Indeed. That could help compensate for the lack of domestic interest this year. The share of U.S.-based job searches for seasonal roles on April 10 was down 16.9% and 27.6% from the same date in 2021 and 2019, respectively, according to Indeed’s analysis.

The Biden administration this spring said it would make an additional 35,000 seasonal-worker visas available to employers ahead of the summer hiring season, on top of 66,000 visas allotted each year. Those numbers are dwarfed by the 11.5 million unfilled jobs in the U.S., although not all of those are seasonal.

SeaWorld Entertainment Inc.

and

American Hotel Income Properties REIT,

which owns a number of Holiday Inn and Embassy Suites hotels in the U.S., on earnings calls in May said that they were hiring more international workers due to the challenging labor market.

Even though seasonal work is traditionally on the lower end of the wage scale, pay is rising as employers compete for workers. Heading into the summer months, annual wages for workers at restaurants, hotels, golf courses, fitness centers and summer camps were all increasing at a faster rate than they were last summer.

Some employers who raised wages are still finding it difficult to staff up. Officials in Calvert County, Md., raised the pay rate for lifeguards to $14.46 per hour from $13.32, but still didn’t get enough applications. Candidates didn’t show up for interviews or they declined positions, according to Calvert County Parks & Recreation Director Shannon Nazzal. As a result, the local pool won’t open to the public this summer in Huntingtown, Md., a town near the Chesapeake Bay an hour’s drive south of Baltimore.

That came as a disappointment to Lindsay Galyon, a stay-at-home mother who lives near the pool and whose 3-year-old son is learning to swim.

“We were really looking forward this summer to spending more time in the pool,” the 30-year-old said. She called it frustrating, since visiting the pool is an easy activity with her toddler.

Ms. Galyon said there are less appealing alternatives. There’s a nearby water park with entrance prices she finds too high; a public pool located a roughly 30-minute drive across the county; and a public beach on the Chesapeake Bay with reduced opening times this season.

Job postings for amusement park and arcade roles were up 54% in April, on average, from a year earlier, and postings were 15% higher for positions at hotels as well as RV parks and summer camps, according to jobs site

ZipRecruiter.

Andy Pritikin, owner of Liberty Lake Day Camp in Mansfield Township, N.J., said before the pandemic, 85% of his advertising budget went toward attracting campers and 15% went toward attracting staff. “That’s completely switched this year,” he said. Demand for spots for campers is “off the charts,” he said.

The camp is competing for young workers with employers in retail, amusement parks, warehouse distribution and food-delivery apps, which are all boosting wages faster than the camp. Liberty Lake is trying to find workers by turning to the traditional places it uses to advertise for campers, such as roadside billboards and social media.

At hotels overall, employment was down 20.7% in March compared with the month before the pandemic hit.

“Hotels hit pause on hiring during [the wave of the pandemic variant] Omicron and were unable to keep up as demand surged back in February and March,” said

Sourav Ghosh,

chief financial officer at

Host Hotels & Resorts Inc.,

during an earnings call in early May. The company owns more than 70 luxury hotels in the U.S. including a number of Ritz-Carlton and

Marriott

hotels. “While our hotels continue to fill open roles, a lag between demand and staffing levels still exists,” he said.

There were about 4.5 million more people who were out of the labor force, meaning they weren’t working or looking for a job, in April of this year compared with February 2020. That is a slight improvement from a year ago but still signals employers will likely struggle to find workers for months to come.

As many adults left jobs in retail, tourism and hospitality during the pandemic, teenage workers have become particularly essential to employers. Teens are now working at levels last seen in 2008, thanks in part to the allure of higher wages.

Alvani Generillo, 15 years old, has a sea of job options. Ms. Generillo, a Calvert County resident, is considering summer jobs at an events venue or at a bubble-tea cafe in Prince Frederick, Md., to supplement babysitting income. “I want to work at a place where I’m going to enjoy working, and I enjoy boba,” she said, referring to bubble tea.

Her mother, Valentina Vasquez, said one potential obstacle to her daughter working this summer is transportation. Ms. Vasquez mostly works from home but occasionally has to commute to her job as a deputy clerk at a court in Washington, D.C.

“Now prices are really high for gas, if the job is really far and she doesn’t get paid much, it could be a waste of time and also gas,” the 43-year-old said, adding that she thinks the limited bus routes and schedules in her area play a big role in whether teenagers can work.

Even if every teenager could work, they would only be able to fill so much of the labor gap. Teen workers account for about 4% of the overall labor force.

Mr. Lawrence of Polar Cave is spending more money for supplies, including ice cream ingredients, bowls and spoons, because of price increases. As a result of the higher costs for labor and materials, Mr. Lawrence has raised ice cream prices by roughly 20% compared with a year ago.

Though the shop has stockpiled many items, it continues to face product delays. Its brownie supplier recently shut down for several days because of an egg shortage, Mr. Lawrence said.

Write to Sarah Chaney Cambon at [email protected] and Harriet Torry at [email protected]

The shortages push up labor costs, adding to inflationary pressure on items including airfares and beach menus. That could hold back consumer spending, the engine of the U.S. economy.

The scarcity of available workers first emerged a year ago as Covid-19 vaccinations became available, businesses reopened and the economy rebounded. Many economists said more workers would join the labor force and fill open roles as Covid-19 fears eased and pandemic-related government stimulus faded. Now, shortages are not only persisting, in some cases they are deepening, at a crucial time for many businesses that depend on a summer boom.

Two key factors are at play. First, employer demand for workers remains red-hot, with job openings double the number of unemployed individuals looking for work. Second, workers continue to switch jobs and quit lower-wage industries including restaurants at high rates, leaving businesses scrambling to fill vacant positions, economists say.

People are quitting and jobs are going unfilled at higher rates than before the pandemic, especially in low-wage and seasonal industries such as recreation and accommodation.

Quits rate vs. job-openings rate, by industry

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation

and food services

Arts, entertainment

and recreation

Industry’s rates

higher than

total nonfarm

Accommodation and food services

Arts, entertainment and recreation

Industry’s rates

higher than

total nonfarm

Accommodation and food services

Arts, entertainment and recreation

Industry’s rates

higher than

total nonfarm

Polar Cave Ice Cream Parlour in Mashpee, Mass., a Cape Cod town, is struggling to find workers to scoop its dozens of ice cream flavors, including the shop’s popular Death By Chocolate.

“We knew we were going to have a busy summer. But no employer that I know—and I know lots of them—could’ve dreamt that it’s like, ‘what, no one is applying?’ ” said Mark Lawrence, owner of Polar Cave. “When you think it can’t get worse, it just gets worse.”

On a warm weekend in mid-May, customers waited in line for roughly 45 minutes because Mr. Lawrence didn’t have enough workers to call in for additional help. “Which is scary for what’s to follow,” he said, referring to his peak summer season, which starts in June. “If it was like this now, what’s it going to be like when school is out and people are coming for their summer vacations?”

The summer economy has a rhythm of its own. With roughly 30 million workers and creating about 10% of U.S. gross domestic product, it runs from June to August when most Americans take breaks from work and school. It’s especially dependent on sectors such as restaurants, hotels and summer camps that are having a particularly hard time filling jobs.

This year’s expected shortages are likely to cause frustration for consumers confronted with limited services, waiting lists and higher prices. At the same time, workers, especially those with limited skills who traditionally fill summer jobs, are likely to have multiple options and receive higher pay.

Brewster Fish House in Cape Cod, typically open seven days a week during the summer, is struggling to stay open for five due to labor shortages, the restaurant’s owner Vernon Smith said.

Demand is strong, he said, for the restaurant’s cioppinos, lobster bisque and fish and chips, in part because many second homeowners have been working remotely from Cape Cod during the pandemic. But there aren’t enough workers to fill roles such as line cooks due to limited affordable housing in the area, Mr. Smith said. And many of the people who respond to the restaurant’s job advertisements don’t follow up or disappear, a practice known as ghosting.

“They say they’re going to come for an interview and then they just never show up,” he said.

Restaurants and bars have brought back many of the jobs lost earlier in the pandemic. But employment in the sector is still 6.4% below February 2020. Meanwhile, demand is hovering near prepandemic levels, according to OpenTable restaurant reservation trends.

Foreign-worker interest in U.S. summer jobs is higher than in previous years, according to jobs site Indeed. That could help compensate for the lack of domestic interest this year. The share of U.S.-based job searches for seasonal roles on April 10 was down 16.9% and 27.6% from the same date in 2021 and 2019, respectively, according to Indeed’s analysis.

The Biden administration this spring said it would make an additional 35,000 seasonal-worker visas available to employers ahead of the summer hiring season, on top of 66,000 visas allotted each year. Those numbers are dwarfed by the 11.5 million unfilled jobs in the U.S., although not all of those are seasonal.

SeaWorld Entertainment Inc.

and

American Hotel Income Properties REIT,

which owns a number of Holiday Inn and Embassy Suites hotels in the U.S., on earnings calls in May said that they were hiring more international workers due to the challenging labor market.

Even though seasonal work is traditionally on the lower end of the wage scale, pay is rising as employers compete for workers. Heading into the summer months, annual wages for workers at restaurants, hotels, golf courses, fitness centers and summer camps were all increasing at a faster rate than they were last summer.

Some employers who raised wages are still finding it difficult to staff up. Officials in Calvert County, Md., raised the pay rate for lifeguards to $14.46 per hour from $13.32, but still didn’t get enough applications. Candidates didn’t show up for interviews or they declined positions, according to Calvert County Parks & Recreation Director Shannon Nazzal. As a result, the local pool won’t open to the public this summer in Huntingtown, Md., a town near the Chesapeake Bay an hour’s drive south of Baltimore.

That came as a disappointment to Lindsay Galyon, a stay-at-home mother who lives near the pool and whose 3-year-old son is learning to swim.

“We were really looking forward this summer to spending more time in the pool,” the 30-year-old said. She called it frustrating, since visiting the pool is an easy activity with her toddler.

Ms. Galyon said there are less appealing alternatives. There’s a nearby water park with entrance prices she finds too high; a public pool located a roughly 30-minute drive across the county; and a public beach on the Chesapeake Bay with reduced opening times this season.

Job postings for amusement park and arcade roles were up 54% in April, on average, from a year earlier, and postings were 15% higher for positions at hotels as well as RV parks and summer camps, according to jobs site

ZipRecruiter.

Andy Pritikin, owner of Liberty Lake Day Camp in Mansfield Township, N.J., said before the pandemic, 85% of his advertising budget went toward attracting campers and 15% went toward attracting staff. “That’s completely switched this year,” he said. Demand for spots for campers is “off the charts,” he said.

The camp is competing for young workers with employers in retail, amusement parks, warehouse distribution and food-delivery apps, which are all boosting wages faster than the camp. Liberty Lake is trying to find workers by turning to the traditional places it uses to advertise for campers, such as roadside billboards and social media.

At hotels overall, employment was down 20.7% in March compared with the month before the pandemic hit.

“Hotels hit pause on hiring during [the wave of the pandemic variant] Omicron and were unable to keep up as demand surged back in February and March,” said

Sourav Ghosh,

chief financial officer at

Host Hotels & Resorts Inc.,

during an earnings call in early May. The company owns more than 70 luxury hotels in the U.S. including a number of Ritz-Carlton and

Marriott

hotels. “While our hotels continue to fill open roles, a lag between demand and staffing levels still exists,” he said.

There were about 4.5 million more people who were out of the labor force, meaning they weren’t working or looking for a job, in April of this year compared with February 2020. That is a slight improvement from a year ago but still signals employers will likely struggle to find workers for months to come.

As many adults left jobs in retail, tourism and hospitality during the pandemic, teenage workers have become particularly essential to employers. Teens are now working at levels last seen in 2008, thanks in part to the allure of higher wages.

Alvani Generillo, 15 years old, has a sea of job options. Ms. Generillo, a Calvert County resident, is considering summer jobs at an events venue or at a bubble-tea cafe in Prince Frederick, Md., to supplement babysitting income. “I want to work at a place where I’m going to enjoy working, and I enjoy boba,” she said, referring to bubble tea.

Her mother, Valentina Vasquez, said one potential obstacle to her daughter working this summer is transportation. Ms. Vasquez mostly works from home but occasionally has to commute to her job as a deputy clerk at a court in Washington, D.C.

“Now prices are really high for gas, if the job is really far and she doesn’t get paid much, it could be a waste of time and also gas,” the 43-year-old said, adding that she thinks the limited bus routes and schedules in her area play a big role in whether teenagers can work.

Even if every teenager could work, they would only be able to fill so much of the labor gap. Teen workers account for about 4% of the overall labor force.

Mr. Lawrence of Polar Cave is spending more money for supplies, including ice cream ingredients, bowls and spoons, because of price increases. As a result of the higher costs for labor and materials, Mr. Lawrence has raised ice cream prices by roughly 20% compared with a year ago.

Though the shop has stockpiled many items, it continues to face product delays. Its brownie supplier recently shut down for several days because of an egg shortage, Mr. Lawrence said.

Write to Sarah Chaney Cambon at [email protected] and Harriet Torry at [email protected]