Jessica Dunker and Mike Ralston

May 14, 2021  | 27 min  | Ep 4838 | Podcast | Transcript

Podcast

On this edition of Iowa Press, Jessica Dunker, president and CEO of the Iowa Restaurant Association, and Mike Ralston, president of the Iowa Association of Business and Industry, discuss Iowa's economy, the job market and the ongoing pandemic impacts on Iowa restaurants and other businesses.

Joining moderator David Yepsen at the Iowa Press table are Kay Henderson, news director for Radio Iowa, and Clay Masters, morning host and reporter for Iowa Public Radio.

Program support provided by: Associated General Contractors of Iowa, Iowa Bankers Association and FUELIowa.

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Vaccines continue to roll out across the country as more businesses open up to customers. We dive into pandemic recovery issues in Iowa's business sector on this edition of Iowa Press.

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Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. Iowa PBS is supported in part by Wells Fargo. Fuel Iowa is a voice and a resource for Iowa's fuel industry. Our members offer a diverse range of products including fuel, grocery and convenience items. They help keep Iowans on the move in rural and urban communities. Together we Fuel Iowa. Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks. With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow. Learn more at IowaBankers.com.

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For decades Iowa Press has brought you politicians and newsmakers from across Iowa and beyond. Celebrating nearly 50 years of broadcast excellence on statewide Iowa PBS, this is the Friday, May 14 edition of Iowa Press. Here is David Yepsen.

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Yepsen: More than 400 days after a global pandemic wreaked havoc on daily life in America, our nation's business industry is still recovering, vaccines continue to roll out across the country as the CDC loosens its guidance on mask-wearing. But how much damage was done to Iowa businesses during this past year? And what lies ahead for restaurants, manufacturers, customers and employees in the months to come? We're joined today by Jessica Dunker, President and CEO of the Iowa Restaurant Association and Mike Ralston, President of the Iowa Association of Business and Industry. Welcome back to both of you. Thanks for joining us again.

Yepsen: Also joining us across the table is Clay Masters, Reporter and Host at Iowa Public Radio and Radio Iowa News Director Kay Henderson.

Henderson: Mike Ralston, this past week Governor Reynolds announced that on June 2nd will be the end of the extra $300 that unemployed Iowans were getting in an unemployment benefit. What is the data on how that will impact the job market?

Ralston: Well, there's a lot of data, Kay, on both sides of that issue, those who oppose it and those who favor it. We of course supported it. We hear all the time from members, manufacturers in Iowa that they can't find people. The supplemental federal support was meant to get people through the pandemic. By no means is the pandemic over, but we're certainly we think all of us on the other side. And so it's a time for people to get back to work and we're eager to have that happen.

Henderson: Jessica Dunker, what impact do you see in the data in your restaurant industry?

Dunker: So, the number one problem hindering recovery for restaurants today is the inability to find a qualified workforce. And our survey data shows that about 90% of operators cite enhanced unemployment as the number one reason they can't get people back. One of the things though that is really important about that is people have a false narrative that you make more money with enhanced unemployment. That isn't true in our industry, I'm sure it's not in any that Mike represents. It's just that the enhanced unemployment you made enough, you just made enough that you could make the choice to stay home.

Henderson: So you say 90% of restaurant and bar owners tell you that that's a problem. Does that mean 90% of them don't have the number of employees that they want to hire?

Dunker: Actually it's even a little higher, it's 92% don't have the number of employees that they want to hire. And more than half are operating at about 80% or less of what they need.

Henderson: So among the Association of Business and Industry members, what percentage of them are not at full employment?

Ralston: I don’t know anyone who is not looking for people. I don't know anyone who is at full employment. It doesn't matter the size of the company, doesn't matter where it's located, doesn't matter the industry. They're all looking for people.

Masters: Mike, at the same time long before the pandemic there were issues with finding a skilled workforce for jobs. What is the difference between now and say pre-pandemic May of 2019?

Ralston: You bet, Clay. I think the answer is that it has just exacerbated the problem. Certainly I've been in my job 16 years, on day 1 I heard that there weren't enough people. And so it's not new. But it certainly seems to be reaching an even more critical place.

Masters: Would you echo those sentiments?

Dunker: I absolutely would. And again, with the enhanced unemployment there were people and are people that are choosing to just ride it out until that goes away and then they'll be back in the workforce. But we're finding across the board that we can't find cooks, we can't find bartenders, we can't find servers, we can't find cashiers and the impact on business, 85% of Iowa's restaurants right now today will tell you our future growth plans are being impacted by our inability to find a workforce. So the economic toll -- at some point it will all catch up and we'd like to have the people there when the jobs are there and make it all come together in happy harmony, which we're ready for in the restaurant industry.

Henderson: The latest data from Iowa Workforce Development indicated that last Friday 26,000 Iowans were receiving an unemployment check approximately. Mike Ralston, if every one of them took a job today that still wouldn't address the workforce shortage, would it?

Ralston: No it wouldn't. I think there's something like 66,000 open jobs on the state's employment website. So that would take a third of them. We need more people in this state. Policy makers are trying to address that and we're all for it.

Henderson: So, Jessica, to that point that Mr. Ralston just made, if you don't have new people moving into Iowa can you address this workforce shortage because as I mentioned, 26,000 people are currently receiving unemployment benefits.

Dunker: So, yes, and operators in our industry need to get creative. It used to be that we were the place that 16-year-olds work. 16-year-olds aren't really working like they did, the levels are not the same. So we have to get creative as an industry to attract people into those first jobs. One in three people had their first job with us. We'd like one in three Iowans that are 16 today to have a job with us. In addition to that, we're seeing rapid growth in people 50 plus. And so we actually have more flexibility than other industries to attract people that might not be collecting unemployment to come in and work part-time, do a lunch hour, get some fun money, do something that is after school. And so some of the workforce we can tap is not reflected in the unemployment numbers. So there are layers. We are glad that the enhanced unemployment is going away, but we also know that we need to do what it takes to attract those alternative and flexible styles.

Masters: One of the biggest barriers that we hear from economists or people looking for work is lack of affordable child care or child care assistance. What can the state do, Jessica, to help incentivize more affordable child care?

Dunker: Well, I think that all the way around -- affordable child care has been an issue since I was the mom of five myself. And seeing anything that the state can do to not just provide either supplements or assistance to people, but help ensure that there's credentialing and professionalism in our daycare I think is probably the best answer. And we even have restaurants, honestly, that are doing things like helping partially pay for child care because they need people to work.

Masters: Are you hearing that that's a big barrier for people to enter the workforce as well?

Ralston: We are, Clay. We consider it a workforce issue. I'll echo what Jessica said, but also share the state is doing some things that they haven't been doing before, certainly offering incentives. There was a bill under consideration this session in the General Assembly that would help address that. Here's what is really happening though. Iowa employers and Iowa communities are getting very creative. I think at Fairfield, which has formed a consortium of employers, they're working with a community group to fund and staff a daycare. That is happening in other places too and those kinds of creative things are probably overdue in this state. It's great to see them happen.

Yepsen: Mike Ralston, in an earlier life you were a political operative for republicans. I want to ask about the politics of this thing. Cutting a benefit of $300 to essentially blue collar workers. Many of those same people voted for Donald Trump, Is this going to hurt republican changes in November of 2022 that they have alienated this segment of the workforce?

Ralston: David, that's a great question. I guess I'm not smart enough to know the answer. But I'll say this, it really, this can't be a political thing. It's got to be a way to help people get back to work not only to get a salary but to get benefits that they don't have currently while they're on unemployment. Iowans want to work. Iowans have some of the best work ethic in the nation. I think if we give them the right incentive they'll go back to work.

Yepsen: Well, but is that true even though this 26,000 figure that Kay used, that doesn't include workers, people who have just dropped out of the workforce, they're not even looking for a job. And so you're not taking $300 away from them, they can't get it in the first place.

Ralston: Those are folks that are dealing with some of the issues we're talking about this morning. They dropped out because they had child care issues. They dropped out because they needed to take care of other family members. They dropped out because they didn't have the right economic opportunity. Employers in this state are doing a much better job of providing that opportunity. There was an article, we're taping this on Friday, there was an article on the front page of today's Wall Street Journal that talks about the marketplace working, that wages are rising. I don't know of an ABI member that pays anywhere close to the minimum wage because if they do they don't have any workforce. All these things play a part in getting folks back to work.

Yepsen: What are they being paid in the restaurant industry?

Dunker: Same thing. In the restaurant industry we're seeing host positions starting at $11 to $12 an hour. We see cooks making $17 to $20 an hour. And yeah, you can't hire someone at minimum wage. But that was pre-pandemic. That isn't even pandemic. But the wage increases that we're seeing now are significantly more than pre-pandemic.

Yepsen: Mike Ralston, another political question here. Is Iowa turning off young people? This legislature and the Governor have opted to discuss limits on abortion, to talk about gay rights and rights for transgender and putting aside some social issues they're not talking about. Young people get put off by this. Say they get put off by this and this is not making Iowa an attractive place. In some states like North Carolina business stood up and said, we're not going to go there if you keep doing this. What's the situation in Iowa?

Ralston: I think the situation is similar in Iowa. The legislature certainly has addressed some of those things, David. But they have addressed other issues that are important to business. Business stood up and was counted when some of those issues were discussed. I think the bottom line is our organization is focused on economic opportunity for all Iowans. If we provide that we believe the state will grow and that's what we're focused on.

Yepsen: Yeah, but is the business community telling fellow republicans knock it off?

Ralston: I think there are a lot of discussions that take place, maybe not in the public arena, but they're certainly happening.

Henderson: Jessica Dunker, did the Centers for Disease Control put your industry in a pickle this week when it said if you're vaccinated and you're around fully vaccinated people you can be indoors without a mask? Now you have all of these business owners having to make these individual decisions.

Dunker: Yeah, one of the things that our research shows is that about one in four restaurants, every change that they made during the pandemic they're going to keep. So that would include having their staff wear masks, having six feet of social distancing between tables, doing enhanced sanitizing -- so there are just -- contactless payment, QR code menus. There are a lot of changes that one in four are going to keep. And so where the controversy has come, where the pickle is, is customers because customers don't want to be asked to wear a mask if they aren't required to wear a mask and we are looking as an industry at how do we recreate our Iowa hospitality promise into a hey, how about we be nice to each other promise. Remember Iowa nice? When you come to your favorite restaurant can you act that way? Because there has been such pent up demand in our industry for people to get out, they're happy to get out. We don't have enough people, we can't get products, the things that we need to have your favorite menu items we might not have. And we have frustrated customers who want what they want, always had, and they want to do it without a mask. And so, yeah, we are in a bit of a pickle because we're in the people pleasing business. That is what we sell. So I think you'll see creative solutions. Again, I think people will say, welcome with a smile or welcome with a mask, we welcome you either way, make your choice.

Masters: Mike Ralston, certainly a lot of companies across the state now are trying to figure out how to return people back to offices. Work from home was a big thing. A lot of video conference meetings took place across the country. With this new CDC guideline, if you're fully vaccinated you don't have to wear a mask. What kind of legal advice or advice are you giving your businesses that you represent when it comes to can they require people to be vaccinated because it would be a lot easier to follow CDC guidelines on that. What advice are you giving them?

Ralston: Clay, we've done a lot of research on that topic and no, we don't believe employers can require their employees to get vaccinated. Many employers are being pretty smart and creative about this offering incentives, paid time off to get the vaccine or some additional financial incentives, $100 if you get the vaccine or some are focusing on your workplace, if you get the vaccine you don't have to wear a mask and that's a huge incentive to some folks. And so you see a lot of different things. I'd say that Iowa manufacturers were very fortunate. Governor Reynolds made sure that for the most part manufacturers could stay open and whether they're in Jefferson or Lenox or wherever they are, they have. And that has been a big thing not only to them and their employees but to their communities. So that is what is happening, a lot of different things.

Masters: Do you think work from home is going to be a new incentive to attract people to want to work for Company X?

Ralston: I do. You know, we have members who are not manufacturers, large employers, and they sent their employees home early and they're still home. A lot of them brought some people back in a partial arrangement. A lot of them were talking about September to bring people back. But now they're talking about earlier, July, even next month in June and I think what we hear is you'll see a hybrid. People will come back to the office but there will be some people who will continue to work remotely.

Masters: What kind of effect has Amazon had on Iowa? You can make a lot more money working for Amazon than you can from different places. What has kind of been the Amazon effect as it continues to expand in Iowa? Jessica, do you want to take that first?

Dunker: Certainly we lost a lot of workforce to other industries. And in the same study that we did that showed 90% cited as their primary reason the enhanced unemployment, the second reason is we lost people to all kinds of industries and industries that were tip of the spear pandemic proof because when you're working and counting on income in an industry that gets shut down in one pandemic, you're probably going to be the tip of the spear in the second pandemic or the third pandemic. And there is just some worry in our industry that we're always going to be the place that people go. So we lost people, great customer service people, to phone jobs, to Amazon, to everyone because everyone was hiring and you love people with great people skills and that's us. So, we were easy pickings. I was talking to the Nebraska Restaurant Association yesterday. She had one restaurant member that lost every single full-time employee on one day because a company had come in and offered $1500 of incentive sign-on bonuses and took her entire full-time staff and they went to do customer service jobs for another organization. And so we're ripe for the picking because our people are out there and when you're getting a great service you might just say hey, I've got that job for you. So we're in trouble for more than Amazon.

Ralston: That's really the impact of Amazon, it's the marketplace. They pay great wages, they have great benefits, they have raised the wage scale in every community they're in.

Masters: You see the trucks all over too.

Henderson: Jessica Dunker, could you I guess update maybe the November report indicating how many restaurants sadly went under?

Dunker: Yeah, you know, it's interesting, I am going to have the reputation of the girl who cried the sky is falling because we have thought from day one we were going to lose 20%, we would lose 1,000 locations. And every piece of survey data that we looked at indicated that to us. I am happy to say I was wrong. But I wasn't wrong because it wouldn't have happened. I was wrong because the state of Iowa aggressively chose to save our industry. They did it with the first set of grants they did right at the beginning of the pandemic, they did it with the Restaurant and Bar Relief Program that they did, they did it with the roll out of first we had 77 counties open, then we had all 99 counties open. So we were allowed to do business at times that other states were not. We received state money that other states did not. And then we had the federal programs at our disposal too, the PPP program and now the Restaurant Revitalization Fund. And so we're projecting now that it's probably going to be closer to 700, which is more in the 12% range, and we'll take that, we'll take that. So we're feeling better. It's a good day. It's a good day. Even though we can't find anybody to work it's a good day in the restaurant industry. Masks are now truly a choice for business operators. There is pent up demand. Our biggest problem is we can't find people to work. But the customers are coming out and it's all the way around and summer is summer so we're optimistic.

Yepsen: What about the restaurant industry? As Mike state, you can't require an employee to get a vaccination. Same for you as well?

Dunker: Yeah, and when you talked about the political leanings of the young, we employ an awful lot of young people. Our largest segment of workforce is 18 to 34. They are not monolithic. And you can't be republican or democrat in the restaurant industry. You just have to be focused on customers and on employees. And we would just not be in a position where we could make a requirement like that and not have revolt with some segment of our either libertarian leaning or I don't want a vaccine leaning workforce.

Masters: What about -- we want to talk about John Deere as well. They have had an issue with a shortage as well and this is a really well known Iowa company. What is the reason for that? Is that because they want more job security? They're being paid a lot of wages and not wanting to be rehired again.

Ralston: I think that documents, Clay, that there is a huge problem. John Deere is not only a great Iowa employer, they are a great global employer. They too set the wage scale in communities they're in, they pay the best, they have the best benefits, everybody knows John Deere and it has been well documented this past week in the media that they're having trouble, as you point out, and when they're having trouble that means everybody is having trouble and that is certainly the case.

Yepsen: Well, one reason that they're having trouble, in those articles, is that workers, yeah they're offered $19 an hour but they can also be laid off at a moment's notice and that is just sort of part of the culture of Deere and Company, it has been for decades, but they don't like it so they'll go to work for somebody that pays less but provides more job security. What does Deere do?

Ralston: Deere is doing what they always do and they are providing an incredible workplace. They too have raised their wages, they're offering sign on incentives and bonuses. They're doing a lot of different things to attract folks.

Yepsen: We've talked about several different things here in the workforce, $300, vaccinations, child care. What other things should be on the prescription for improving Iowa's employment climate? Jessica?

Dunker: Well, from the standpoint of employment, I need to step aside -- from the standpoint of my industry we've got to have access to products. We need people to be driving trucks, we need wood to build palates to ship food, we need access to the things that we need. And I think that is the primary thing. I will say that wages and benefits, all of those things, the marketplace is taking care of, the private sector marketplace is taking care of most of that.

Ralston: Jessica really talks about the next biggest issue and that is supply chain. We had a board meeting yesterday, we had about 60 people and far and away the majority of those folks were manufacturers all over Iowa, many small communities in Iowa, they make all kinds of things and for the first time supply chain was really a huge issue, not just availability, but if they can get it the price has skyrocketed, or they can get it and the price has skyrocketed but the quality is bad. So supply chain is a real issue.

Masters: And certainly the supply chain has come up this week when the biggest small talk in Iowa is talking about gas prices. It has raised a lot of questions about cyber security. What are you advising your business interests about what to do about cyber security?

Ralston: That is something we've talked about for a long time. We're really fortunate in Iowa that manufacturers, well business in general, are really smart about those kinds of issues. This last week has made everybody really want to double down to make sure they're secure. But Iowa has been talking about cyber security for a long time and I can't imagine there's a manufacturer or business in this state that hasn't addressed it. It's something our folks talk about and they feel comfortable with where they are but it's something you always worry about.

Yepsen: Is this something that the legislature and the Governor need to address? Some business don't even report to the government that they have been hacked. Shouldn't they be required to do that so the country as a society can fashion a solution here?

Ralston: I don't think so, David. No, I don’t think so. I think what they need to do is to make sure that they're safe and that they have protected their business. I don't know that the government can mandate that but if they're smart they'll do it.

Yepsen: Well, somebody commits a crime on your property, you have to report that crime. What about the crime of cyber security?

Ralston: Oh, I see what you're saying. I misunderstood. Should they be forced to -- yeah, why not? If there is a crime they ought to report it.

Henderson: Jessica, there was a debate in the Iowa Senate this past month in which a representative of the Great Lakes area said one of the reasons that they're having a workforce shortage up there is because of the visa problem. What impact would visa reform and immigration reform have on this workforce shortage that Iowa is having?

Dunker: So it's interesting. This is one of the best examples of why the restaurant industry is neither republican nor democrat because we have always been very aggressive on the immigration issue both in the state and federally. We for years have been in support of a path for DACA, which represents actually a tremendous number of our workers as well as for the TPS, the temporary protected status. There are a lot of people in our industry that have that. We'd like to see that taken care of. In addition to that, you can make citizens, you can do that, but what we really care about is all those folks that want visas just to work, we'd like to let them work and we'd like to hire them. And we really, we employ a lot of folks that come from South American in our industry. I think people know that. And it's arrogant to assume they want to all be citizens. They don't. What so many want to do is send money home and eventually get home themselves. We would love to see a legal path, a better visa program that is just a work visa, a temporary work visa or something that gives them status, allows them to negotiate wages and to be hired in our industry.

Yepsen: Mike, just a few seconds. What is ABI's position on visas?

Ralston: People always seem to be surprised, we're very pro-immigration and certainly want the visa program to be fixed. People talk all the time about HB1 and they need to work.

Yepsen: We're out of time. Thank you both for being with us again. It's good to see you both.

Ralston: Thank you, David.

Dunker: Thank you.

Yepsen: And we'll be back next week with another edition of Iowa Press at our regular times, 7:30 Friday night and Noon on Sunday. For all of us here at Iowa PBS, I'm David Yepsen. Thanks for joining us today.

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Funding for Iowa Press was provided by Friends, the Iowa PBS Foundation. The Associated General Contractors of Iowa, the public's partner in building Iowa's highway, bridge and municipal utility infrastructure. Iowa PBS is supported in part by Wells Fargo. Fuel Iowa is a voice and a resource for Iowa's fuel industry. Our members offer a diverse range of products including fuel, grocery and convenience items. They help keep Iowans on the move in rural and urban communities. Together we Fuel Iowa. Small businesses are the backbone of Iowa's communities and they are backed by Iowa banks. With advice, loans and financial services, banks across Iowa are committed to showing small businesses the way to a stronger tomorrow. Learn more at IowaBankers.com.

Iowa Bankers Association
Associated General Contractors of Iowa