Rod Darby has a great location for The Trailside Pub & Restaurant, overlooking the Youghiogheny River in West Newton.

Diners can sit on the deck watching hikers, bikers and runners travel the Great Allegheny Passage, the popular trail connecting Pittsburgh with Washington, D.C.

Attracting customers to his business has not been a problem, but what Darby lacks are the people to make meals and serve food and drinks. It’s a frustration he shares with employers of all kinds, whether they are in the hospitality industry, manufacturing or construction.

“(The workers) are my biggest asset. They are like gold. They’re irreplaceable,” Darby said of his staff.

Unfortunately, there are considerably fewer of those “irreplaceable” employees in the seven-county Pittsburgh region than there were last year, despite the economy being more open than in pre-covid vaccine times of 12 months ago. The labor force — those working and looking for work — shrunk to 1.185 million in July in the seven counties, about 26,000 fewer workers than during the height of the pandemic in July 2020, according to the state’s Center for Workforce Information and Analysis.

What’s more telling is that there were 40,000 more workers in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties just two years ago, and 48,000 more in July 2016.

Gaming the system?

“Where did all of the workers go?” wondered Frank Gamrat, executive director of the Allegheny Institute for Public Policy, a Castle Shannon-based think tank.

Economists and labor experts blame it on a host of factors — the population drop in Southwestern Pennsylvania, the aging workforce, the fear of covid that pushed some out of the labor market and others into an early retirement, a lack of immigration and the failure to retain international students who come to Pittsburgh for a top-flight education.

The elephant in the room, when considering there are about 78,000 unemployed in the seven counties who are not taking jobs that employers are begging to be filled, is the extra federal unemployment benefits that expired Saturday. That includes the $300 per week under the Pandemic Unemployment Compensation, which had been reduced from $600 a week last year. The extra weeks of jobless benefits under the Pandemic Emergency Unemployment Compensation, as well payments to gig workers and the self-employed who got aid through the Pandemic Unemployment Assistance, also have ended.

Bill Naser, owner of Naser Foods in Oklahoma Borough and Pleasant Unity, said he has seen the number of applications increase in mid-August as the expiration for the extra federal benefits neared.

“In my opinion, it is why we are getting more applications,” Naser said as he sat at his desk at the Oklahoma Borough store.

Darby is among the legion of critics who believe the federal government’s well-intended covid-relief efforts to help those who lost jobs during the pandemic resulted in sapping the incentive for workers to return to the labor force when businesses reopened.

“People know how to game the system. They apply for a job but do not show up for the interview,” allowing them to prove they conducted a job search so they continue to get benefits, Darby said. Workers accustomed to making factory-level hourly wages apply for jobs he knows they don’t want. Others make appointments for interviews and never show.

“It was really challenging before, because the government was paying people to sit at home,” said Naser, a certified public accountant and an attorney who has been in the food business since 1975.

Retirements in play

“I don’t think you can put it on just one thing,” said James Futrell, vice president of market research and analysis for the Allegheny Conference on Community Development in Pittsburgh.

Many workers close to retirement age probably dropped out of the labor force when the covid pandemic hit last year, Futrell said. They probably decided their 401K retirement plans had grown from the boom in the economy and thought, “Why do I need to keep doing this” and risk being infected with the coronavirus, Futrell said.

The Pittsburgh area would have been impacted more by those early retirements than other regions, Futrell said, because roughly 15% of the region’s labor force in 2019 was between ages 55 and 64, compared with 13% nationally.

It is not certain yet if those older workers who stepped away from the labor force because of the covid pandemic are gone for good, Gamrat said.

The long-term slowing of population growth in Southwestern Pennsylvania also has impacted the labor force, said Risa Kumazawa, a labor economist and associate professor of economics at Duquesne University in Pittsburgh.

“The deaths are exceeding births and the number of people immigrating” to the region, Kumazawa said.

There are fewer immigrants coming to the United States, and, for whatever reason, the Pittsburgh region is not a landing spot for immigrants who do come, Kumazawa said. Nor is it a place where international students who are attending Pittsburgh’s universities remain once they graduate. They are going to Washington, D.C., or New York City or returning to their native country, Kumazawa said.

Impact of tax credit, covid weighed

The child care tax credit under the American Rescue Plan also might play a role in the labor force not rebounding to pre-covid levels, particularly for those sectors of the economy such as hospitality that often rely upon mothers of young children. Under the relief plan Congress passed in March, the tax credit for children ages 6 to 17 was raised from $2,000 to $3,000, and an additional $600 for children younger than 6. Beginning in July, those eligible taxpayers were able to get up to $300 per month for each child ages 6 to 17.

Even with the child care tax credit, some workers might be unable to find suitable child care, and “that may be a reason a lot of workers are not going back to their jobs,” Kumazawa said.

The pandemic had a greater impact on the labor environment for low-wage workers, Kumazawa said. Workers lost their jobs when businesses closed or saw their hours cut because of pandemic-related limits placed on how many people could be at a worksite. The extra money received by some workers who have yet to return to their jobs might not be the entire reason they have not gone back to work.

“You can’t separate the financial reasons from how much is due to the fact that they have health concerns,” Kumazawa said.

Allegheny Institute’s Gamrat agrees, saying “some of the folks may be inclined to get back to work” as more people get vaccinated and there is less fear of contracting covid.

Covid might have put a crimp in the workforce, making it harder for businesses such as Carol and Dave’s Roadhouse Restaurant in Ligonier to hire more people.

Co-owner David Cassler wants to hire four or five more employees but has had no luck, despite offering competitive wages and benefits.

He has been able to keep his business open seven days a week over the summer, but that will be a challenge in the future because he is losing younger workers who are returning to school. He said he needs workers now, rather than a few months from now, when winter sets in and business is slower.

“I may have to close down a day” without more workers, Cassler said.

The lack of seasonal workers, particularly teenagers, has kept businesses such as amusement parks and swimming pools from remaining open as long as they wanted to this summer.

Steve Zumoff, owner of the former Double Wide Grille along Route 30 in North Huntingdon, is hoping to get enough workers to open a few days a week. He is in the process of converting the Double Wide Grille into the PepperMill Restaurant, but has yet to be able to hire a staff in large enough numbers to open seven days a week despite the “help wanted” sign on his message board along Route 30.

Zumoff wants to open soon but has yet to set a date. He is aware of the competition for workers in the same area, as businesses up and down Route 30 — including corporate-backed franchises such as McDonald’s, Wendy’s and Arby’s — are advertising that they are hiring.

Neither Cassler nor Darby believes the region’s labor shortage will end soon.

“I don’t think it will open up until the spring,” Cassler said.

“For the restaurant industry … I think it will be another six, nine, 12 months before we can even out,” Darby said of the imbalance between jobs and those seeking them.

Naser, on the other hand, believes the labor market will rebound this year as more people will have to return to the work force. He has about 100 employees between the two stores and enjoys a rather stable work force, he said.

The Mon Valley Unemployed Committee’s Barney Oursler has a different perspective on what will happen now that the $300 weekly payment from the federal government ends. The nonprofit has helped workers navigate the complexity of the unemployment system since the early 1980s.

“People are going to be really desperate,” said Oursler, who was one of the group’s founders.

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