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A businesses around the Phoenix area struggle to attract employees, some are being forced to raise prices

PHOENIX (3TV/CBS 5) – A local barbershop is one of several Phoenix-area businesses that are increasing their prices to retain employees and keep up with competitors. 

“This morning we sent an email to all of our clients, let them know we’re increasing our prices,” said Jacob Meltzer, owner of Keep It Cut in Phoenix. “It’s really just a reflection of the marketplace right now. We want to retain our current staff right now and attract new stylists into the shop to make sure we have the best talent.” 

Keep It Cut has eight locations across the valley and hasn’t increased their prices since 2017. Right now, the increase is about $1 to $2 more per service. 

“We had started looking before Covid and then when everything hit, we decided, ‘Let’s hold off; our clients aren’t in a position to afford anything extra right now, let’s wait until everything clears up.’ Now we’re in this spot,” Meltzer explained. “When we were interviewing new staff we just found we weren’t able to get all the hires we wanted to because folks we’re interviewing would say, ‘oh my managers gave me a raise, the company just gave me a raise so I’m going to stay where I’m at.'” 

Meltzer said they were fortunate to avoid layoffs. They have about 60 staff members total, but need about 10 to 15 more. “We’re that short-staffed. And just the number of applications we’re getting is so low compared to before,” Meltzer said. 

The state director for the National Federation of Independent Business (NFIB) says this is a growing trend. He says when it comes to small businesses, they have limited options when it comes to increased expenses. 

“They don’t necessarily have the access to the capital loaning market as larger businesses would nor, also for small business owners will they necessarily take on debt like a larger business would,” explained Chad Heinrich with NFIB. “When they’re faced with increased costs, which labor is a huge cost for a small business, they have to raise prices because they really have nowhere else to go. If they need to raise wages they will in turn raise prices to do that.” 

Heinrich adds that a big issue for small businesses has also been the competition with unemployment benefits. 

 “We accepted the additional federal pandemic aid so our unemployed workers were receiving significant amounts over and above what they would normally get as unemployment insurance benefits,” Heinrich said. “Several people that are available to work simply are making an economic decision at this point saying, ‘I can make more on the unemployment insurance than I can if I go back to work.'”

Though the increase in Meltzer’s prices are not significant, he believes it will be enough to keep his current staff and hire new employees. Meltzer says so far he’s gotten mixed reviews from clients, but he says most are understanding and willing to continue to support small businesses. 

“We’ve always tried to be an employee-centered business by offering full benefits, good wage, making sure we’re taking care of our staff and our clients appreciate that. We think that those who want to be our clients will want to appreciate that.” 

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