Wisconsin Business Owners Cite Child Care As Major Obstacle To Hiring

While Republicans are blaming federal unemployment benefits for a "labor shortage," business owners see child care as a hurdle for their former employees.

MADISON, Wis. — More than a year after restaurants and cafes were forced to shut their doors because of the COVID-19 pandemic, laying off millions of workers, Wisconsin’s small business owners are quick to say that they’re having a hard time re-hiring.

Caleb Nicholes, who is a co-owner of Wonderstate Coffee in Madison, Wisconsin, which opened a downtown location during the pandemic, said the company has been putting out job applications and isn’t getting responses.

“Zero,” he emphasized, standing in his bustling cafe across the street from the state’s Capitol Building. Every available indoor table was filled with patrons, as several baristas worked at the coffee counter.

Business owners have been complaining about a tight labor market, and alarm bells have been going off about a “labor shortage,” where businesses are reopening but struggling to find enough workers.

Customers eat and drink at the Brat Stop, a popular bar, restaurant and tourist attraction on May 15, 2020, in Kenosha, Wisconsin.
Customers eat and drink at the Brat Stop, a popular bar, restaurant and tourist attraction on May 15, 2020, in Kenosha, Wisconsin.
Scott Olson via Getty Images

Republicans and conservative-leaning business groups like the Chamber of Commerce are blaming federal unemployment benefits — a boosted $300 per week in federal benefits added on top of state benefits to tide over unemployed Americans until September. Already, Republican governors in two states, Montana and South Carolina, said they’re ending the federal benefit ahead of its September expiration date in order to get people back to work.

But on-the-ground business owners see the issue as bigger than just unemployment aid. A lot of their workers have families, and going back to work is a financial gamble.

Nicholes cited the federal unemployment benefit as one reason workers might want to stay jobless for now, but also noted child care.

“We know this has disproportionately affected women,” Nicholes said, saying he’s seeing a lot of single mothers who simply can’t work right now.

Friday’s jobs report showed employers had added only 266,000 jobs in April and the unemployment rate rose to 6.1%, even as business restrictions have loosened with increased vaccinations. Nicholes is on to something.

While 400,000 more Americans are working or looking for work as of April, labor force participation among women fell by 64,000 in the last month.

Melissa Buchholz, co-owner of Milwaukee restaurant Odd Duck, said she saw several of her former employees move on from the hospitality industry altogether. They went back to school and into the tech industry. One of her workers of nearly nine years lost both her parents during the pandemic and had to move away to take care of family affairs.

And among the biggest reasons she cited were the former employees who were forced to become stay-at-home parents with schools closed and day care out of reach.

“People who haven’t made money in a year, who have been on unemployment, regardless of that extra unemployment, they’re not making enough to think about the future and to think about having to pay child care,” Buchholz said. “And then to think they might not make money at the restaurant for another month because the paycheck doesn’t come for two weeks — that’s not a calculation they can do. They are stuck in a holding pattern.”

Even the National Restaurant Association, which has lobbied vigorously against raising the subminimum wages for restaurant workers, has noticed this pattern. The organization’s senior vice president, Hudson Riehle, acknowledged “the need for caregivers to remain at home” as one of the reasons restaurants are having trouble hiring.

On Friday, Treasury Secretary Janet Yellen cited both the absence of affordable or accessible child care and irregular school schedules as two reasons why the April jobs report wasn’t strong. Child care is a major pillar of the Biden administration’s American Families Plan, which includes $225 billion for expanding and improving access to child care.