‘Burnout city’: The labor shortage has dragged on, and Alaska workers and business owners are exhausted

The ongoing labor shortage in Alaska, compounded in part by an unexpected surge in tourism and consumer spending, is having widespread impacts on the economy.

Some restaurants that closed earlier in the pandemic are staying shut, uncertain they’ll find enough employees to provide service.

Construction companies and other businesses are experiencing project delays.

And a number of hospitality businesses are shutting their doors periodically, to give shorthanded staffs a much-needed break.

“During the pandemic, I went from the frying pan and into the boiling water,” said Jack Lewis, a franchise owner of Krispy Kreme doughnut shop and other dining establishments in Anchorage.

“I went from no sales and looking at going out of business, to plenty of sales and no labor,” he said.

As the economy recovers from the depths of the pandemic, employers say they’re grateful for the business but frustrated by a monthslong labor shortage that continues to drag on. They say the shortage is slowly easing but remains a giant obstacle that has kept them from fully reopening after the COVID-19 pandemic gutted the economy last year. They’re offering more pay, overtime and flexibility to hire new workers and retain the exhausted staff they do have, with an eye toward long-term sustainability.

Lewis said that counting his other operations that include Firetap Alehouse and Restaurant in South Anchorage and BurgerFi in Midtown, he’s about 50 workers short.

That’s putting strain on his existing employees, who are pulling extra shifts, he said.

On Tuesday, BurgerFi was closed to give employees a break. He’s planning to close additional businesses over Labor Day weekend.

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“I’m going to lose money being closed that Sunday and Monday, but I’m doing it to give my good, hard-working people a day off,” he said.

Mark Kotalik, a cook and supervisor at the Peanut Farm, said this summer was his busiest in a decade at the sports bar. He often clocked 12-hour shifts, six days a week.

He’s close to 60 years old, and the extra work was hard, he said.

“My knees were killing me, my feet were killing me,” he said. “You go home, you rest and you get up all over again. It wears on you.”

His boss, Travis Block, said he couldn’t get enough applicants to show up for interviews or start working as planned.

He dangled higher pay, including a $500 bonus for staff who found employees that worked through summer.

Many people don’t seem ready to start working after the pandemic sparked widespread layoffs, he said.

Kotalik and other core employees “saved” the restaurant this summer, putting in 60-hour weeks.

“I’ve never been as stressed out in 35 years as I have been this summer,” Block said. “Every day, you ask if you’ll have enough staff, will you find new people, and then those people need training. It’s been a constant challenge.”

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This month, Block took the unusual step of closing the first three Mondays, to give workers an extra day off.

“I felt horrible these guys were working so hard,” he said.

The pandemic forced more than 65,000 people onto Alaska’s unemployment rolls last year, one in five workers. It will take a long time to recover from that disruption, experts say.

In July, some 20,000 people continued to collect unemployment benefits in Alaska, about three times as much as pre-pandemic levels. And there were 30,000 fewer jobs than in July 2019.

Employers often blame the labor shortage on generous federal benefits.

Bill Popp, head of the Anchorage Economic Development Corp., said he believes that’s less of an issue than people think.

Gov Mike Dunleavy ended a $300 boost to Alaska unemployment checks in June, so that aid is gone, Popp said.

Other benefits, including rental relief that thousands of Alaskans are collecting, could be a factor in why some workers are staying on the sidelines, Popp said.

But more important is the lack of available child care and a limited influx this summer of Lower 48 and foreign workers, Popp said. People also continue to leave Alaska, adding to the problem, he said.

The situation will improve a lot if those migrant workers return next summer, he said.

“It will be next year before we see significant improvement in our current situation,” he said.

The Alaska branch of PeopleReady, a nationwide temporary employment agency, is experiencing its best year in at least five years, said Sarah Houck, Alaska manager for the company.

She said more companies across many sectors are increasingly turning to the agency for help finding workers after their job ads failed to produce enough candidates.

“People are thinking outside the box when traditional hiring is not working,” she said.

On some days, the agency might need to fill 150 openings, but only half the number of needed workers is available, she said. Many people say they’ll show up for work but don’t, which is partly why businesses are increasingly turning to the agency for help, she said.

“It’s been a good year for us, but it’s been a lot of work,” she said. “For every five people you hire, maybe one or two go to work. And everyone is seeing that across the board, so you have to work extra hard for every employee you get.”

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The shortage is affecting a wide swath of industries in Alaska and nationwide, from government to the service sector to construction.

Betsy Holley, a spokeswoman with Alaska Department of Corrections, said the state agency is advertising $5,000 sign-up bonuses for new correctional officers. The job, available to applicants with minimal educational requirements, starts at about $60,000 annually.

The lack of Alaska applicants following through forced Candice McDonald, owner of the 15-room Copper Whale Inn in downtown Anchorage, to hire one woman from the Lower 48. Hiring Outside is something she never does, McDonald said.

McDonald bought a condo in downtown Anchorage to provide housing for the new worker, after she couldn’t find an available apartment that was reasonably priced. McDonald also flew the woman to Alaska and purchased a bike and helmet for transportation.

Business exploded in May, but the inn made it through the summer with a few employees, she said. She needed a few more. At times she recruited her parents and other family members to help, she said.

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Early this month, McDonald stopped taking most new bookings for the rest of August so she doesn’t wear out her staff. But she’s taking bookings again in September and beyond, she said.

Raul Villa Rojas, the longtime head housekeeper at the inn, said tourism will soon slow down, providing some breathing room after a busy summer.

“The last week is like ‘OK, I’m ready for vacation,’ " he said, as he snapped clean sheets onto a bed.

Fire Island Rustic Bakeshop recently began closing on Sundays, mainly because it’s been slammed with business.

“Basically we went down to four days a week to preserve employee wellness,” said Rachel Pennington, who owns the bakery with her parents, Jerry Lewanski and Janis Fleischman. “We want to survive this period with our staff intact and it was starting to feel like burnout city.”

It’s uncertain how long the Sunday closure will last, said Tyler Murphy, general manager at the bakery.

The bakery typically had the workforce it needed, though it was shorthanded a couple of times this summer as college-student workers transitioned in and out of Alaska, he said.

Finding employees this summer was harder than normal, Murphy said. The bakery advertised on Indeed.com since it couldn’t find all its employees through word-of-mouth, as it usually does.

“That was a first, we never had to reach out and use traditional marketing means to get employees in the past,” he said.

Andre Spinelli, with Spinell Homes, one of the state’s biggest residential builders, said labor shortages in the construction industry this summer have delayed projects. He said the workforce is coming back, slowly.

“But overall as a whole, all my subcontractors are all looking for help and they can’t find it,” he said.

Orso restaurant in downtown Anchorage is among the restaurants that have not reopened since shutting down earlier in the pandemic.

Launching a restaurant at any time is challenging, said Chris Anderson, an owner with Orso.

The “incredible” lack of employees and continued uncertainty in the economy as COVID-19 numbers rise complicates the picture, he said.

“It’s labor, and it’s do we have enough guests in town to fill restaurants?” he said. “It’s will we have more mask mandates, and get closed down again? It’s how much risk do you want to take?”

Frank Perez, owner of Alaska Porta Potty, said he has unsuccessfully tried to hire an employee since April to service portable toilets. He acknowledged it’s a job most people don’t want, though he said it’s sanitary thanks to equipment, sterilizer and other gear.

He added an extra $2 an hour, bumping the starting pay to as much as $44,000 annually, depending on experience. Six people accepted the job, then didn’t show up, he said. Two others left soon after starting.

On Friday, he serviced portable toilets in the rain after his work kept him in Palmer so late that he slept in his truck at a gas station there. In better times, he’d have enough employees so everyone could work stable hours.

He’s had one day off since April, on Father’s Day, he said.

“This is not normal, not even a little bit,” he said.