THE CURRENT LABOR SHORTAGE CRISIS

The aftereffects of the pandemic continue to plague the hospitality industry in a number of ways—from businesses having to close down to the workforce shortages we are facing. Currently, for hospitality industry businesses to be back at full capacity in North Carolina, we would need as many as 50,000 more employees to fill the widening gap.

According to a new e-book published by Emsi/Lightcast, Demographic Drought: How the Approaching Sansdemic Will Transform the Labor Market for the Rest of Our Lives, there is a people shortage (a “sansdemic”) affecting higher education and businesses and it will only worsen in the coming decades. We continue to hear from a variety of sources that the labor shortage crisis is both pandemic-related and societal, but consider these key takeaways:

• In an average year, two million baby boomers retire. In 2020, three million baby boomers retired—with 11 million people exiting the workplace (gap can't be filled with declining birth rate).

• Shift in wealth—average household wealth of a retiring baby boomer household is $1.2 million with declining birth rates (four children per household to now two children per household). We stand to experience a major transfer of wealth on the horizon.

• Normally these Gen Xers and millennials of baby boomers would replace their parents in the workforce, but with the shift in wealth transfer and a change in values (lack of motivation, shifting career ideals, and work ethic, we aren't seeing that)

• In 2022, four million women left the workforce (wealth and children care and shifting work life values)

Right now, the US is at the beginning stages of the “sansdemic.”

• Between 2011 and 2021, nearly every county in the US saw declines in its working-age population.

• The 2020 census shows that 16 states saw net population decline over the past years—the worst numbers since the Great Depression.

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Idecades,nthemapsbelow,wehighlightsomeofthedramaticchangesthathaveoccurredoverthelasttwo bothinthepopulationofworking-ageadults,andinthepopulationofchildrenunderfifteen. MountainOverall,themapsshowhistoricpopulationcenters–thecoastsespecially–losingyoungpeople,whilethe West,Southwest,andsomepartsoftheSouthandMidwestmakerelativegains.Andinjustthelasttenyears,lossesofworking-agepopulationacrosstheboardhaveaccelerateddramatically.relativelyNoticehowtheworstlossesare localizedtotheMidwestonandSouth.Almosteverycounty populationbothcoastssawworking-age growth:between becoming2001and2011,ruralareaswere increasinglyelderly, inwhileyoungpeopleconcentrated countiesprosperousurbancenters.Most inWesternstatesalsosaw althoughtheirworking-agepopulationgrow,somecountiesinOregon,Idaho, theandNevadasufferedlosses.Texas,oneof largeststatesintermsofoverallpopulation, populationwasamixedbag,withsomecountieslosingworking andsomecountiesgaining.

Percentchangeinworking-agepopulationbycountybetween2001and2011

Percentchangeinworking-agepopulationbycountybetween2011and2021

• The combination of low fertility, low workforce participation, and longer life spans means two-thirds of the US population could be financially dependent on the remaining one-third by the year 2100.

All is not lost—the report outlines the steps we will need to take to survive the upcoming “sansdemic.” It’s no secret—we are going to have to start investing in and valuing people even more than we do now.

Employers and higher ed institutions will need to:

• Recruit beyond traditional demographics

• Invest in programs to reskill and realign the existing workforce

• Focus their efforts on retaining the students and employees they already have

NCRLA is working to re-engage people on the sidelines and help increase our labor force in the hospitality industry. Later this year, we will roll out an aggressive and comprehensive marketing campaign to attract workers to hospitality careers across the state.

The scope of the work will include branding and creative efforts showcasing positive attributes of careers in the hospitality industry. The campaign will be based on the input gleaned from both our employer and employee town halls and focus groups from last year. Recommendations will emphasize:

• The types of transferable skills employees can learn that will serve these individuals well if/when they move to different careers.

• The growth opportunities and prospects for rapid advancement for those choosing to stay in the industry.

• There are career pathways and hospitality is not a “deadend” job for people who lack skills.

• Real people from the hospitality industry to demonstrate these concepts.

This work will complement the NCRLA Foundation’s Workforce Recruitment Campaign being administered by the NCRLA Foundation, which is providing training and career development opportunities to help attract and retain employees.

The North Carolina Hospitality Industry: A Driving Force in the State Economy

More Than 20,000 Restaurants • 2,000 Lodging Establishments

$30 Billion in Annual Sales • Employs 11% of the State Workforce • Nearly 450,000 Employees

More Than 20,000 Restaurants • 2,000 Lodging Establishments

$30 Billion in Annual Sales • Employs 11% of the State Workforce • Nearly 450,000 Employees

• Private-label liquor sales—Allow mixed beverage permittees to sell private-label liquors by the bottle directly to their customers for consumption off premises

• Clarify prohibition split case fees for wine

• Ready-to-drink cocktails—Allow for takeout and delivery of ready-to-drink cocktails along with restaurant orders

Ensure hospitality businesses are protected f rom COVID-19 liability since current protections expired in February 20 23 .

Ensure hospitality businesses are protected f rom COVID-19 liability since current protections expired in February 20 23

NC restaurants, hotels, and bars face unnecessary and burdensome challenges regarding the purchase and sale of alcoholic beverages. NCRLA will advocate for modernization and increased business efficiencies to support on-premise permit holders, including:

• A centralized liquor inventory management system to create transparency into product availability

• Allow purchase from any NC ABC board—Allow permitees to purchase from any local board that has the product they need

• A liquor delivery system —Establish a 21st century system to deliver liquor to permitees

• An online ABC permit issuing system and temporary license procedure

• Alcohol advertising laws modernized

• Rare and allocated spirits distribution transparency by local boards

North Carolina Restaurant & Lodging Association

222 North Person Street, Suite 210 Raleigh, NC 27601

(919)844-0098

Promote NC Products in NC Foodservice Establishments

Support an appropriation to the NC Department of Agriculture to strengthen and promote NC agricultural products to foodservice establishments across the state.

Workforce Development

Support funding for hospitality workforce development initiatives.

Short-Term Online Rentals

Support parity within the lodging industry, including the authority of local governments to regulate short-term rentals like other, similar businesses.

Oppose all new or expanded prepared meal taxes.

Do not oppose legislation that complies with established occupancy tax guidelines—G.S. 153A-155 and G.S. 160A-215 as follows:

• Rate—Cannot exceed 6%

• Use—At least two-thirds of the proceeds must be used to promote travel and tourism and the remainder must be used for tourism-related expenditures, which may include beach nourishment

Support clarification in statute to distinguish a visitor/hotel guest as one who stays for less than 90 days from a tenant who establishes residency (90 days or more).

Tourism Promotion

Support robust funding for state and local tourism marketing and promotion.

Support Tax and Regulatory Reform

Support tax and regulatory reforms that help foster business growth and support job creation.

• Support deductibility of credit card swipe fees related to the collection of taxes such as sales, occupancy, and prepared meals taxes

Oppose Regulatory Overreach

Oppose legislation that would impose onerous and unnecessary burdens on businesses. Examples include:

• E-verify expansion

• Franchisor to report the sales data of a franchisee

• Overreaching data privacy bills

Support the current school calendar law which requires that K–12 public schools not begin classes earlier than the Monday closest to August 26 or end later than the Friday closest to June 11, with limited exceptions and contingencies for weather.