Business is booming; we're out of business

Unable to find competent help to run the cash register, Basil Richardson did last week what Nor'easters, blackouts, and holidays never could make him do: He boarded up shop.

The small brick grocery, a fixture on State Street here since Mr. Richardson's father opened it in 1948, fell victim to an irony of the New Economy: too much business - and not enough workers.

The crunch for cooks, store clerks, and cashiers isn't unique to this Yankee port town. Nationwide, the unemployment rate stands at 3.9 percent - the lowest in three decades - and cities from Ann Arbor, Mich., to San Jose, Calif., are having trouble finding lower-wage workers. Yet Portsmouth, N.H., may be the only place in America where stores are actually closing for want of help.

To some degree, the city is a victim of its own success. A few years ago, it was still a ship-building center, struggling with recession. Today, it's a high-tech node - capital of the "e-Coast" - and one of New England's hottest locales.

For low-tech businesses here, the change has left them scrambling to fill unglamorous openings. More broadly, though, it is a testament to how quickly and deeply the Internet economy can transform a town.

"This is indeed a strange economy we're in," says Steven Fowle, editor of the Portsmouth-based New Hampshire Gazette. "Twenty-somethings are outbidding each other for houses while, now ... you can't even buy a tin of oatmeal downtown. I'm not saying it's a bad thing, but there comes a point when this isn't going to work anymore."

With Port City unemployment at 2.3 percent - and more people than ever coming to a thriving downtown for lunch and evening entertainment - restaurateurs and retailers are in crisis mode.

Managers at the local Sheraton are tucking in bedsheets, and the owner of the famous Yoken's "Thar she blows" conference center is pulling late-night dishwashing shifts. The gift store Macrodesia, unable to find enough help, simply has a sign on the door that reads: "Hours vary."

One local restaurant manager was even overheard begging a waitress to bring her boyfriend in to host the evening's dinner. "I'm sure he has something he could wear," the manager pleaded.

The most public examples, though, have been the closing of Richardson's Market and troubles at Cafe Brioche - one of the city's landmark businesses.

The cafe has repeatedly had to close up to 10 hours early (it's supposed to close at 11 p.m.), and it almost failed to open one day because no subs could be found to bake the Danishes and pour drinks.

Usually operating with 10 full-time people at this time of year, the Brioche is not quite making do with two. None of the recent part-time hires has even showed up for their first day of work.

While analysts have clucked about a possible backlash to the tight labor market for three years, there is now nothing theoretical about the situation for cafe manager Jennifer Howard. There's no bottom of the barrel left to scrape.

"We used to be able to joke around more when we worked," says Ms. Howard. "Now, this place wears out the people we do have. In fact, I give a lot of the kids credit for staying here.... I even understand it if any of them should quit at any point."

Higher wages ($10 an hour to start is the norm), frantic job postings, and college job-fair outings yield only a trickle of responses, with most shops unable to match offers by the city's high-tech firms.

The daily scene of mega-size tankers dwarfing the city as they slip up the deep-water Pisquataqua River hints at Portsmouth's blue-collar heritage. But with property values doubling in some neighborhoods, many low-wage workers can't afford to live inside the city anymore. And many are opting to work nearer to where they can live.

Though Portsmouth has more than 1,000 subsidized apartments in a city of 25,000 people, it doesn't come close to meeting demand. In fact, the housing authority stopped taking names for its lists last week - they were getting too long.

Now operating on "negative unemployment," Portsmouth has also failed to draw the numbers of immigrants that have taken over the phones and McDonald's counters in the boom towns of the West and South. Many of those areas are also finding ways to court stay-at-home moms and retirees - who are not counted among the 5 million remaining unemployed in America.

"What Portsmouth has showed us is that you can indeed choke on your own success," says Richard England, director of the Center for Business and Economic Research in Durham, N.H.

The days of restaurateurs taking a swing through Market Square to find a punk rocker to fill a shift are over. There aren't nearly enough teenagers and college students to go around right now, says Linda Kimball, a career services counselor at Portsmouth High School.

"Businesses come to us constantly, but we haven't been able to help them out much lately," says Ms. Kimball. "There are so many jobs that a lot of the kids don't stay with it. They say, 'If I don't like it, I'll leave, go elsewhere, and probably make more money.' "

Yet for all the complaints about "lazy teenagers" now buzzing around Portsmouth's retail district, youths themselves say they're overworked. In fact, they're being called on like never before to greet tourists and locals alike.

"I may be a rarity in working two jobs and going to school, but not a single one of my close friends has not worked since they were 15 or 16 years old," writes high-schooler Caitlin Fisher in the Mouth of the River, a local high school newspaper.

For now, shopkeepers here may just have to take a cue from another downtown character, Emilio, who runs a small specialty grocery store on Daniel Street.

Never one to hire extra help, he works only when he feels like it. His advertisements read: "Emilio's. He's never open!"

(c) Copyright 2000. The Christian Science Publishing Society