Help wanted: State College is facing its worst worker shortage yet, businesses say

Every week, thousands of Penn State students pass the help wanted signs in storefronts and posters advertising wages well above the state minimum that dot the landscape of downtown State College.

The lack of students working in those restaurants, shops and groceries is more of a problem than ever, according to business managers who say the labor shortage has led to temporary closures and concerns for the future.

“From what I’ve seen, it’s a nationwide problem but it’s amplified in the university town really by the fact that you’ve got a potential student workforce of almost 50,000 that is shrinking in terms of their availability for work or their willingness,” said Rob Schmidt, director of the Downtown State College Improvement District.

And it’s not just student worker numbers that are dwindling. “It’s workers in general,” he said. “It’s a low unemployment rate that’s causing an adult worker shortage.”

Pennsylvania’s unemployment rate was 4% in September, up from 3.8% — its lowest ever — in April, according to the Bureau of Labor Statistics. Centre County’s unemployment rate is even lower — in August it was 2.9%, according to the state Department of Labor and Industry.

The changing Penn State student

Jim French, general manager of McLanahan’s Downtown Market, said finding student workers to fill his part-time roles today is much more difficult than it was 15 years ago.

Then, it was much more common to have students from varied socioeconomic and geographic backgrounds around the state, he said. He never had trouble filling his schedules, which now take weeks to fully staff.

But since the economic recession in 2008, “it’s like a different student that attends at Penn State,” he said. “It’s the most expensive public university in the nation, so the students that come here come from affluent families. They don’t need to work to buy their own food. The kids that are here are either on loans or their family is supporting them while they’re here.”

The numbers reflect that sentiment. According to 2017-18 data on students who applied for financial aid via the FAFSA, the median family income for University Park students is $115,905, up from $103,679 in 2013-14. That’s more than the median family income for the state of Pennsylvania, which was $75,949 in 2017, according to American Community Survey data. The average annual cost for a Pennsylvania resident to attend Penn State is $30,373.

Penn State students carry the highest debt load in the Big Ten, with an average loan debt of $36,044 in 2017-18.

Though Penn State doesn’t collect statistics for off-campus student workers, about 13% of University Park undergraduate students work on-campus jobs, according to statistics provided by the university.

However, on-campus student workers enrolled in the Federal Work Study program have declined rapidly over the past five years.

From 2013-14, Penn State University Park had 1,067 student earners enrolled in work study. That number had dropped to 422 by the 2017-18 school year, according to Penn State spokeswoman Lisa Powers.

During the 2015-16 school year, the federal government “significantly reduced” Penn State’s allocation for work study, said Powers. The program had to “downsize,” and since then, Powers said the university has noticed “less interest” from students in accepting work study positions or aid.

“At this point, the university’s federal allocation would support hiring more work-study students, and we are making efforts to more broadly advertise the community service aspects of working a Federal Work Study job,” she said. “We would like to see more students participate in the program, as there are positions available university-wide.”

Students working non-work study jobs at University Park has also dropped off in recent years. Using data from the last five years provided by Penn State, 5,515 student worked on-campus non-work study jobs in fall 2015. But by fall 2018, that number had dropped to 4,963. Between fall 2017 and 2018, the number of students working on-campus non-work study jobs dropped by 407.

‘Perfect storm’ for employers

Still, many Penn State students do work jobs, but they say they’re looking for more flexible hours, a little spending money and work experience that aligns with their course of study.

Senior Julie Bates, who works as a grader for a professor, said she took the job because it’s flexible, it pays well and it’s related to her major. She also said it’s more appealing to work for a professor who could write a recommendation letter for a job, versus a manager in the service industry.

Junior Haniel Tracey, who studies psychology, said she’s held a few jobs on and off campus, but had to quit this year, “because I had so much going on, and it was just really hard to try to fit that into my schedule.”

Balancing two student organization memberships, coursework and her clinical psychology research requirement became too much to hold a job down, she said. Working allowed her to earn money to put toward books, food and other expenses, where she now has to rely on her parents for support.

Schmidt, of the DSCID, said the low unemployment rate combined with the increasing flexibility of the gig economy — jobs like driving for Uber and Lyft — and the number of Penn State students coming from higher-income households have created the “perfect storm” for employers.

“The cost of going to Penn State is not something you’re going be able to pay or cover with your job in college, so I really do think a lot of students and their families come here with the goal, ‘You’re gonna graduate in four years, you’re not gonna work, we’re gonna address it when you graduate,’” he said.

At Qdoba in downtown State College, General Manager Jason Scott said it’s been “super challenging” trying to find workers who can work a full, eight-hour shift.

“A lot of the students that I do have are on very tight schedules because of academic reasons. So it’s more like two- to three-hour shifts, sometimes four- to five- (hours),” he said.

As a result, the local franchise no longer opens on Sundays and often closes early due to a lack of available employees, he said. The owner, who has operated the franchise for 19 years, has made some cosmetic upgrades to the restaurant, and management has raised starting wages to attract workers. There are several full-time employees supporting themselves or their families at Qdoba, but Scott says management has often relied on students to make up the part-time employees.

“If we don’t have the employees to work here, it’s kind of hard to keep the doors open,” Scott said. “If it keeps going the way it’s going, you never know, we might have to close.”

The labor shortage, which is hitting the service industry hard, is arguably the best way to organically raise the living wage, said Schmidt. But on the flip side, he said, it’s raising the cost of labor which in turn is contributing to the rise of automation and fast-casual restaurants like Snap Pizza or Hello Bistro where there’s no table service, “where you go and you order your food and you sit down.”

Schmidt said the DSCID is putting together a roundtable or task force to address the worker shortage issue in State College, and more broadly, Centre County. Instead of trying to get more college students to work, he said, DSCID is trying to attract workers from outside State College, including Mifflin and Huntingdon counties, to fill the jobs in State College and the Centre Region.

In talks with CATA, CareerLink and Penn State, Schmidt said the improvement district is looking at a system where people park remotely and are bussed in to State College, possibly by shuttle.

He’s also talked to employers about offering a stipend to employees to put toward offstreet parking or a bus pass.

The main question right now, he said, is, “How can we cast a wide net and work with the businesses and work with Penn State, to make it more of a commuter opportunity to work in and around State College?”

French, the manager at McLanahan’s, has been pulling more from the pool of workers coming from Philipsburg, Bellefonte and Zion — those who want to work in State College but can’t afford to live there on a service wage. They’re still a student-friendly place to work, but it’s gotten hard to maintain student workers.

“I don’t see how it could get any worse. Each of the last four years has been more difficult than the year before,” he said. “At some point, it’s gonna turn back around. You have to be optimistic.”