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Amid rising wages, Duluth retail, food service positions remain unfilled

Since 2019, Duluth employment has dropped 10% in retail and 18% in restaurant industries.

BK London Road.JPG
A sign reading "Sorry we are closed" hangs in the window of the Burger King on London Road in Duluth the evening of Aug. 18. A photo of the message from a staff member circulated on Reddit.
Contributed photo
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DULUTH — Wages are rising for positions in the restaurant and retail industries across the state. Yet, the struggle remains to fill and retain employees in these entry-level job openings.

A recent snapshot of annual averages for employment and wages captures the entirety of the seasonal nature of retail and food service industries, said Carson Gorecki , the Department of Economic Development's regional labor market analyst for Northeastern Minnesota.

Of the 14,737 total job vacancies among food and beverage serving workers statewide during 2021, Northeastern Minnesota experienced 1,134, according to DEED . During the same period, Minnesota's fast food industry experienced highest percentages of job vacancies for supervisor and cook positions with median wages from $14.88–$17.02 an hour.

Meanwhile, Northeastern Minnesota's fast food industry experienced the highest job vacancy rates for food preparation and customer service workers for positions such as dining room and cafeteria attendants, bartenders, dishwashers, hosts and hostesses. Median wages for these positions in the northeast area ranged from $10.25–$12.71 an hour, while fast food supervisors and cooks were offered median hourly wages of $13.38 and $11.49, respectively.

Take for example the Burger King on London Road in Duluth. General Manager Shanelle Taylor said starting wages of new employees are $15–$18 an hour. However, the restaurant continuously struggles with filling kitchen night staff positions and closing-shift management positions. Currently, there are 12 staff on hand, with a need for six more, Taylor said.

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"A lot of it is training. We can't keep management because we don't have the right support to train in team members," said Taylor, who is tasked with on-boarding of new hires. "When we can't get training done, the team member feels overworked. They just get thrown into something they don't know and they just get overwhelmed."

Nearly two months ago, a disgruntled manager walked out on the job and shut down the restaurant early, but not before leaving a note in the window for customers. An image of the note circulated on Reddit on Aug. 18 that read: "Sorry we are closed. Management treats employees terrible here so I quit. Sorry for the inconvenience to our customers. Please support a business that values their hard working employees. Thank you."

Customers wait at the London Road Burger King drive-thru.
A cashier at the Burger King drive-thru on London Road hands an order to a customer Monday.
Jamey Malcomb / Duluth News Tribune

The Burger King on London Road is just one of the 181 locations in six states that are owned and operated by Cave Enterprises of Chicago.

"It's not really a team member position that is the issue," Taylor said. "We can't keep management. We've lost 10 managers since opening in September of 2020. I've asked upper management for help, and there is no help out there. I'm forced to just keep hiring and training and moving people up when I feel they are ready."

A new hiring platform has helped attract more applications for open positions, Taylor said, adding that even after offering a new referral bonus employee retention remains an issue.

"So many people are against fast food and working here. The team is good; sometimes it's stressful. But overall, I just need good managers," Taylor said.

As for retail sales occupations, there were 26,804 job vacancies in Minnesota, with 2,645 in the northeast. Median wages for regional retail positions average lower than statewide, ranging from $20.61 for supervisors to $12.80 for salespersons. Statewide, salespersons are paid slightly more, while supervisors are paid a median wage of nearly $10 more an hour.

Since 2019, Duluth has seen employment drop by 10% in the retail trade industry, and decrease by 18% in the restaurant industry, according to Quarterly Census of Employment and Wages data.

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"In general, the lower-paying positions, not necessarily specific to restaurant and retail industries, have higher turnover," Gorecki said. "Those are the positions that we are seeing employers struggling to fill. It's not surprising to me that the lower-paying jobs have higher vacancies. We have a tight labor market right now. Pay becomes more competitive as employers compete for workers. Lower-wage spectrum positions are more susceptible to turnover because it is more easily affected by wage changes."

According to DEED, a livable wage for a family with one child, one full-time adult and one part-time adult is $19.40 an hour.

While restaurant, leisure and hospitality industries are expected to add jobs in the coming years, Gorecki said trends in retail trade are less clear. According to a 10-year regional projection for Northeastern Minnesota, DEED predicts a 5.4% decline for employment in the region, compared to a 4.6% state employment decline.

"A lot of that has to do with the changing delivery methods of retail," Gorecki said. "Automation plays into that. The elimination of cashiers is definitely playing into that trend. A lot of this is happening out of the lack of availability of workers. The available workforce isn't there, but the demand still exists the services and products."

According to the most recent data available from DEED's Job Vacancy Survey , food preparation- and service-related occupations held the highest job vacancy levels of all industries by late 2021. Sales and related occupations were second and health care practitioners and technical occupations were third.

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Minnesota Department of Employment and Economic Development Job Vacancy Survey also shows how vacancies and median wages have changed over the last two decades for retail and food services occupational groups.
Contributed / Minnesota Department of Employment and Economic Development

Compared to all industries, the relative wage levels for retail and restaurant industries are still lower, despite the increases in wages in those specific industries, Gorecki said.

"The labor market was tight going into the pandemic, and it has gotten tighter now with less of a workforce surplus for employers to draw on than they did prior," Gorecki said. "You can see how younger workers make up much larger (and increasing) shares of the retail and restaurant work forces. Just under half of all workers in the region in restaurants are under 25. That is compared to only 16% across all industries.

"What stands out to me is how the retail trade and restaurant industries really attracted those younger workers," he said. "They were the only demographic that really benefited from the pandemic. The youngest workers employment increased, and they seem to flock to the retail and restaurant industries. The pandemic allowed these industries to really consolidate the younger workers."

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Many of Duluth's employers rely on younger workers and college students to fill positions, according to Duluth Workforce Development Director Elena Foshay . Employees age 20-24 make up 20% of the local labor force. Connecting local employers with college students is key, Foshay said.

"No one is talking to them about opportunities in the community or inviting them to stay after graduation," Foshay said. "There's a disconnect on all sides. Colleges are not working hard enough to connect students to local employers.

Customers wait at the London Road Burger King drive-thru.
Customers wait to order at the drive-thru at the London Road Burger King.
Jamey Malcomb / Duluth News Tribune

"On the employer side, it's a capacity challenge," she said. "They're understaffed and can't train. Internships are a great way to turn into jobs. So are tours, or other exposure such as career fairs and guest speakers."

Resources such as DEED's industry-specific Pathways to Prosperity grants with a focus on people of color and low income populations have seen success in Duluth, Foshay said. DEED's Dual-Training Pipeline is another industry-specific competitive grant program that combines structured on-the-job training with formal related education.

As restaurant and retail wages continue to rise, employees are pulled from other industries such as childcare that don't have the flexibility to adjust as quickly, Foshay said. Therefore, employers must make jobs more attractive beyond raising wages, Foshay said. She said this can be accomplished by building career pathways and advancement opportunities, and investing in entry-level workers to train them up for more skilled positions.

"Employers need to try creative strategies to recruit more diverse crews. There are under-tapped populations that employers are failing to reach," Foshay said. "There are 12,000 to 13,000 people over the age of 25, either high school graduates or non-high school graduates, without post-secondary education, who could be trained to do some jobs like CNAs or manufacturing. We're not maximizing our locally available workforce yet."

Brielle Bredsten is the business reporter for the Duluth News Tribune.

She earned a bachelor's degree in Professional Writing & Technical Communication, with minors in Advertising and Creative Writing from Metropolitan State University, in addition to a two-year professional paid internship as reporter/editor of the student newspaper.

She is an award-winning professional writer, photographer and editor based in rural Minnesota. Over the past decade, Brielle Bredsten has contributed more than 1,000 articles, feature stories, non-profit press-releases, photographs and columns. Her work has been published in several community newspapers.

Send her story tips, feedback or just say hi at bbredsten@duluthnews.com.
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