Lose workers or break the law: US companies grapple with jab mandate
Rick Powell has never seriously considered breaking the law before. As president and co-owner of Pemmco Manufacturing, a midsized company in Asheboro, North Carolina that makes parts for brands like GM, Powell considers himself an upstanding member of the local community.
But if Joe Biden’s order forcing companies to ensure employees are either vaccinated against Covid-19 or regularly test negative for the disease comes into force in January as planned, Powell, who has 135 people on his payroll, is considering simply not complying.
“We are struggling with it,” he told the Financial Times from his office on the outskirts of the small manufacturing town. “There is always the option of just not doing it. We consider ourselves a very ethical company. To knowingly violate the law is not something that is in our DNA, but that is something we will have to talk about.”
Powell is one of tens of thousands of business owners who will be required to implement the new rule, which is due to come into force on January 4. Those that do not face fines of nearly $14,000 per violation, or nearly $140,000 if the violation is found to be “wilful”.
Under the plans, all companies with 100 employees or more will be required to seek either evidence of vaccination from each of them or proof of a negative test every week. The rule would cover 84m employees, according to the Occupational Safety and Health Administration, and more than 100,000 businesses, according to the latest census count.
Biden announced the new mandate in September after becoming frustrated with the US’s stubbornly low rate of fully-vaccinated people, which is currently 58 per cent — well below the G7 average of 66 per cent. The US president announced stricter mandates for federal contractors and most healthcare providers, employees of which will be forced to get vaccinated without the option to test instead.
It is one of the widest reaching mandate policies in the world, with many other developed countries such as the UK having chosen to apply the measures only to healthcare workers.
The plans have triggered a backlash from Republicans across the country. On Thursday Ron DeSantis, the Republican governor of Florida, signed a law banning mandates — though Biden administration officials insist their rule will supersede that.
Meanwhile several candidates are attempting to turn it into an election issue at next year’s midterms. Donald Trump, the former president, has sent out fundraising emails asking supporters to donate to a legal campaign against the mandate.
This week OSHA suspended its work on implementing the rule after a federal court put it on hold while a coalition of companies and Republican-led states continues its legal challenge.
Powell has not yet counted how many of his staff are vaccinated, nor has he decided how to implement or pay for a testing regime, which requires tests to be supervised either by an employer or health practitioner. He says however that he believes his staff’s vaccination rate to be roughly that of the local county, which is 40 per cent.
“If we impose the mandate, there are people that I am confident will leave,” he said.
Amber Smith, who has been at Pemmco for just a week and is training to be an office manager, agreed.
She has not been vaccinated, and avoids taking pharmaceuticals because scientists sometimes use cells originally taken from an aborted foetus during the drug testing process. She is reluctant to take regular tests, both because they involve pharmaceutical products, and because she is conscious that taking regular time off work could cause tensions with colleagues.
Like her boss, Smith is now considering breaking the law if the mandate is imposed. “I would leave this job before I turn my back on God and submit,” she said.
Doctors say the health impact of the mandate could be significant. When Cone Health, Powell’s local hospital network, imposed its own strict mandate, the staff vaccination rate jumped from around 60 per cent to 99 per cent. “Mandates could just be the thing that help us end this pandemic,” says Brett McQuaid, the company’s chief Covid-19 physician.
The problem for small business owners like Powell is that employees like Smith would probably find it easy to get employment at a smaller company that is exempt from the mandate.
“Everyone in Asheboro is hiring,” says Powell. “There are jobs going in warehousing, manufacturing, furniture. Unemployment is around 4 per cent, we are pretty much at full employment.”
Powell has raised wages by 15 per cent in the last year, and every morning passes billboards on his drive to work offering low-skilled work with signing-on bonuses of up to $10,000.
The same is true across the US, where unemployment is near historic lows as the country rebounds from the initial shock of Covid-19. Wages rose 4.2 per cent in the 12 months to September, according to the US Bureau of Labor Statistics.
Over 1,000 miles to the west of Asheboro, in Wichita, Kansas, Patrick Goebel is struggling with similar issues.
For the past few months, Goebel, who runs a building supply company called Star Lumber, has been holding small meetings with staff to encourage them to get vaccinated. He has offered employees $100 and extra time off if they do so. And yet, he is struggling to get his company’s vaccination rate above 50 per cent.
“Many people don’t feel like they need it,” he said. “They are mostly in the 20-35 age range, and they don’t feel like they should be mandated to take something they don’t feel like they need.”
Like Powell, Goebel is aware that workers have a lot of choice. “We have struggled to get staff in to fill the jobs we have,” he said. “The number of times we have made offers and then the day comes to start and they have taken another offer — it is ridiculous.”
Goebel is also worried about the impact of the stricter vaccine mandate on local federal contractors. Many of the largest employers in Wichita supply aviation equipment to the government, and will have to ensure all staff are vaccinated by January 4.
Analysts at Jefferies this week predicted that two Wichita companies, Textron and Spirit AeroSystems, would be hit hard by staff departures after the mandate. A union official told Reuters earlier this month that around half the employees at both companies were unvaccinated. Both companies said they would comply with the mandate, but would not confirm their current vaccination rates.
Goebel said: “We are going to have thousands of people sitting at home again not working. That could have disastrous effects on our community.”