These should be salad days for Careforce, a Lynnwood company that provides in-home nursing and care services in the greater Seattle area. With local baby boomers getting older — and with hospitals shifting to less expensive outpatient care — demand for the home care is soaring.
But like other local providers, Careforce can’t hire fast enough to meet that rising demand, despite bumping starting wages for some positions to $17. “It’s a huge problem for us,” says Geoff Meinken, a Careforce senior executive. “We’re leaving a lot of potential revenue out there because we just don’t have enough people.”
Seattle’s home-care labor crunch has several causes. The job is physically and emotionally taxing. It also requires extensive training: Aides need a 75-hour state certification course before they can work in a field that, as Meinken notes, often pays less than a pizza deliverer earns.
And that’s a problem, because when Meinken goes recruiting, he’s competing against not only other healthcare providers, but also pizza places, grocery stores, Amazon warehouses, Uber and Lyft, and nearly any other business that relies on low-wage workers, but can’t find enough of them.
Today in King, Pierce, and Snohomish counties, employers that rely on entry-level workers have around 24,000 unfilled positions, according a monthly estimate by the state Employment Security Department.
All are “competing for basically the same pool of workers,” says Anneliese Vance-Sherman, a labor economist who covers the Puget Sound region for the state Employment Security Department.
It’s not just a Seattle thing: Nationally, a dearth of low-wage workers has helped push unemployment down to a nearly 50-year low. But the shortage is especially sharp in fast-growing metro regions like ours.
A troubling case in point: At SeaTac International Airport, the Transportation Security Administration faces a 90-percent turnover rate among screeners, despite temporarily raising wages from $15 to $20. “In my time at Sea-Tac, TSA has never had the staff to open every single screening lane at our airport,” Lance Lyttle, the airport’s managing director, explained during Congressional testimony Tuesday.
Winners and losers
All this hot demand has been good news for low-skill workers, a group that missed out on the region’s tech-fueled economic boom.
“There are so many agencies looking for home care aides now,” says Isatou Gassama, a 29-year-old home care aide who was recruited by Careforce just a few weeks ago.
That increasing demand has showed up in wages that are often well above the minimums mandated by Seattle ($16 an hour for large employers) and the state ($12).
Hotel workers in King County average nearly $19 an hour, according to state data. Fast food wages are also rising. At Taco Time Northwest, which runs dozens of Puget Sound locations, frontline workers and shift leaders make up to $17.50 and $20.87 an hour, respectively — up 17 percent and 28 percent since 2015 —says company co-president Chris Tonkin. Some employers have also offered better benefits packages — for example, assistance with childcare or college tuition.
But there are limits to wage and benefits growth, which employers must either absorb or pass along to their customers. That has left many employers in a labor limbo. Many now face chronic understaffing and higher overtime expense. High turnover is the new norm. Managers often spend months filling positions, only to see the new hires jump ship after a few weeks — or, in some cases, before they even start.
“They call it ‘ghosting’,” laments Jeff Morgan, director of operations at Hop N Drops, a regional restaurant chain that operates outside Seattle and pays starting cooks at least $2 above the state minimum wage of $12. “They don’t show up or they show up for the first day and don’t come back.”
Employers have tried some creative responses. Some offer hiring and referral bonuses and other incentives. (At Taco Time Northwest, new hires who stayed at least six months last year were entered into a raffle for a new car.)
Other employers are trying to help expand the long-term supply of workers. Home-care providers are lobbying state lawmakers to streamline the health-aid certification process. The Washington Hospitality Association, a hotel and restaurant trade group, is working with state agencies on programs to recruit teens, veterans, and part-time students via job fairs and other hiring events.
There are also programs to hire what the state calls “hard-to-place” job seekers — for example, people on public assistance and even ex-offenders. Under a federal program administered by the state, employers who hire an ex-inmate can earn a tax credit of up to $2,400 and be bonded against losses associated with the employee. The state is “trying to light up new pockets of potential labor” through such efforts, says Suzi LeVine, commissioner of the Employment Security Department.
The real problem: housing
Yet while such efforts are helping, they miss the more fundamental problem in the Seattle-area job market: Even with recent wage hikes, this place is simply too expensive for entry-level workers.
During Seattle’s earlier booms, labor shortages were less severe because lower-skill workers from outside the area could more easily move to town and fill the vacancies, says Jacob Vigdor, a University of Washington labor economist. By contrast, today’s boom appeals disproportionately to the higher-skill, higher-wage newcomers who can afford our housing costs — and whose earning power helps keep those costs high.
That snowballing unaffordability shows up in the city’s changing education mix. According to a recent Census report, the share of Seattle residents without a four-year degree has fallen from 53 percent in 2000 to 27 percent in 2017 — a smaller fraction than in any major other U.S. city.
For all the debate over wages or benefits packages, the real story behind Seattle’s labor shortage, Vigdor says, “all boils down to what happens to housing.”
Housing also helps explain why higher wages alone won’t solve the labor shortage.
In the Seattle area, employers must pay $18 or $20 or $22 an hour not merely to woo entry-level candidates away from competing employers, but also to persuade those workers to commute in from the neighborhoods where they can actually afford to live.
“The type of people who would take these jobs are really living in the outskirts because Seattle is just too expensive,” says Tom Wolf, general manager of the recently opened Hyatt Regency Seattle downtown. Many of Wolf’s recent hires commute daily from Federal Way, Tacoma, Everett, or Mill Creek. “That’s a solid hour and 20 minutes each way,” he says.
And those distances, in turn, help explain high turnover rates. According to Vigdor, “one of the strongest predictors of whether someone is unhappy with their life is whether they face a long commute.”
The robots are coming … but not for a while
Given the obstacles to fixing the region’s affordability crisis, the only realistic way to solve Seattle’s low-wage labor shortage may be simply to wait. Eventually, market forces, either in the form higher wages or a cooling regional economy, will re-balance the local labor market.
In the meantime, employers are left to try other, less expensive fixes.
Some restaurants are buying more pre-prepared foods instead of hiring prep cooks, or are asking their patrons to bus their own dishes.
Employers are also stepping up efforts to automate—with everything from self-service check-in kiosks at hotels to the Starbucks’ smartphone app. (Earlier this year, the new Embassy Suites by Hilton in Pioneer Square tested out a robot that might someday deliver room-service meals or linens to guests.) In each case, says Vigdor, “you’re taking a certain job category and you’re just writing it out of your business model.”
But, he adds, this so-called labor “substitution” only works for some job categories: “We’re not to the point where we can have robots clean hotel rooms.”
Or provide home healthcare, a task that demands not just physical strength and skill but a lot of emotional intelligence and empathy, as well. “You can automate retail, but we’re still decades off from being able to automate care providers,” says Careforce’s Meinken.
Instead, homecare providers are left to look for workers the old-fashioned way — by aggressive, relentless recruitment. Meinken says turnover today is so high — the state average is around 37 percent in the first three weeks, he says — that he needs hire 10 new aides every month.
That’s a pace that will be increasingly difficult to sustain, Meinken says, given how rapidly cities like Seattle are becoming both grayer and more expensive. He says, “it’s going to be a real problem if something doesn’t change in the next 15 years.”