Park City’s labor shortage could be here to stay
Demographic trends, not just the pandemic, are contributing to dearth of workers
In the middle of what used to be the quiet shoulder season between summer and winter in the Park City area, and on the cusp of a seasonal hiring push that begins each fall, the Summit County economy is facing a shortage of workers and big questions about how thousands of jobs will be filled.
While the pandemic is an obvious cause for the upheaval felt over the last 18 months, the demographic trends that have resulted in this shortage have been building for some time, according to Jeff Jones, Summit County’s economic development director.
“History might be catching up to itself,” Jones said, referencing low birth rates, people leaving the workforce in droves and, in Summit County especially, a high cost of living.
“A lot of trends were already happening, and then COVID was the accelerant,” he said.
In a recent presentation delivered to the Sunrise Rotary Club, Jones detailed the demographic and pandemic-related forces acting on the local economy. He said employers would likely have to increase wages to try to entice the few workers available to hire.
Two of the area’s largest employers, Deer Valley Resort and Vail Resorts, which owns Park City Mountain Resort, have raised their minimum wages to $15 per hour for this winter.
Smaller employers, too, are being forced to adapt.
Matt Powers, a manager with Aloha Ski & Snowboard Rentals, said that the store has increased its starting wage from $15 per hour this year, up from $12 per hour.
“Labor costs are going up. A lot of ski shops are doing the same thing, mostly because of the situation we find ourselves in with housing in Park City,” he said. “Someone like me, who’s a manager and gets paid better, I can’t afford to live in a one-bedroom apartment in Park City by myself.”
He said the starting wage could be an enticement to encourage workers to commute from the Salt Lake Valley.
“Salt Lake is so expensive right now, there has to be some type of benefit for people to come up here to work,” he said.
He added that it was too early to tell whether the store would struggle to find workers this winter, as it doesn’t start the hiring push until November.
Jones said the local economy adds between 4,800 and 6,200 workers annually from November to February, with about 2,500 of those jobs held by foreign workers using special J1 or H2B visa programs.
Both Deer Valley and PCMR say they will once again recruit foreign workers.
Deer Valley has already begun hiring, holding two job fairs with more scheduled.
“We are doing all we can to hire locally including adding drive-through options at Snow Park and in-person ones this fall,” said Emily Summers, a Deer Valley spokesperson. “… Hospitality workers have left the industry, however, new ones are taking their place.”
Jessica Miller, a spokesperson for PCMR, said the single largest investment Vail Resorts is making this year is increasing employee wages and restoring previous cuts.
She said PCMR is recruiting for the winter season.
“We have a great base of seasonal employees and our employees from prior seasons have continued to show enthusiasm to return to work this winter,” she said.
From 2019 and 2020, the Summit County economy lost more than 2,400 jobs. While the number of jobs is projected to grow by about 800 this year, the 2021 numbers are still below those from 2018.
But the contraction hasn’t led to many unemployed workers. The August seasonally adjusted unemployment rate in Summit County was 2.5%, on par with surrounding counties.
Jones suggested the pandemic might have fueled a restructuring of the local labor force, in which service industry workers like waiters or bartenders chose to leave the industry.
In May, more than 5% of employees in the leisure/hospitality sector nationwide quit their jobs.
“By now, the quit rate is some of the highest in history across all spectrums,” Jones said.
He said some service workers may have moved out of the area, citing the high cost of living.
“There are a lot of reports of people moving to Summit County, but a lot of people left as well,” Jones said.
He said the Kem C. Gardner Policy Institute estimated very little net migration into the county in 2019 and 149 new inhabitants in 2020.
With expensive housing costs and few unemployed local workers, Park City area employers will likely have to keep importing workers from elsewhere.
“I think the most obvious way this works out is that the wages for unskilled, lower paid positions will be forced up by supply and demand to a point where they overlap with lower end professional jobs,” Jones wrote in the presentation.
That could lead to a wage-price spiral, in which increased labor costs are passed on to consumers, leading to a higher cost of living and the need for further increased wages.
“That’s going to cut into everyone’s bottom line. Eventually what happens is businesses pass those costs onto consumers. Hopefully consumers are willing to pay those costs,” he said. “… I personally think the demographic forces we see are going to be with us for a while. I don’t think they’re going to be resolved in just a year.”
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Approximately 80 people spoke during the meeting, mostly in opposition to the Tech Center proposal. The hearing drew a capacity crowd to Newpark Resort’s conference center, while hundreds of others attended virtually.