The labour market participation rate in Western Australia has grown with almost 14,000 people joining or rejoining the workforce in January.
But unemployment remains low at 3.7 per cent, and many businesses in sectors such as hospitality and retail are crying out for more staff.
For the director of Daisies cafe in Cottesloe, Sam Kaye, the problem became particularly tough this week when several of his staff were deemed close contacts of COVID-cases at other venues they had visited on the weekend.
"Over the past probably three months staffing has been a major issue for us, with the border being closed, and now with the listed exposure sites we've had a lot of staff had to isolate," he said.
There are now six pubs and nightclubs in Perth that were visited by COVID cases on the weekend, sparking orders for some other patrons to isolate for seven days.
The notifications to close contacts were made late on Wednesday and Thursday, and Mr Kaye said he was almost caught too short-staffed to open his cafe.
"We knew it was always going to happen, we had plans in place, but I think when it happens at 8:30pm and then you're trying to make plans for the next morning, it's really difficult," he said.
"I don't know what the perfect answer is."
Fears of six months of pain
Mr Kaye said after close contact protocols were eased last week, he was not expecting people would need to isolate anymore simply for being at the same venue as a case.
"For those venues we thought they would be classed as casual contacts, not close contacts," he said.
He said like many businesses, he had been wanting more staff for months now, and he feared issues caused by workers needing to isolate would only worsen as COVID cases grew in the state.
Mr Kaye said he had been hoping WA's borders reopening would allow more potential new employees into the state.
"We're all fearful that this is going to be like this for six months, because the borders haven't opened yet."
Open border no panacea: economist
A date is yet to be set for the border to come down, and labour force economist Conrad Liveris warned it may not present the instant solution some businesses were hoping for.
"I think that's a really nice idea, but I'm not too sure how well it is going to work practically because the thing is for the past two years Western Australia has been saying 'do not come here'," he said.
"For a lot of that time, it wasn't just the government saying that, it was a cultural issue as well here, and that's only really changed recently.
Mr Liveris said WA would be competing with the rest of the country and the world to attract people.
"The whole world is understaffed at the moment, this is an issue going on everywhere, and so why would they come here when we've been telling them 'Do not come here'?" he said.
"We're actually behind the eight ball in bringing more people from interstate and overseas here.
"It's going to be a continual issue for the rest of this year, it's very easy to see that occurring."
Mr Liveris said one upside to the tight labour market for employees was that it had "never been a better time to ask for a pay rise".
"Everyone is short-staffed, everyone is looking for staff, there's kind of no-one around," he said.
"And I know no business wants to hear it, but it is the reality of the situation, this is the economy at play.
"So if you haven't had a pay rise in a while now is a good time to ask for one."
He also warned staffing problems for employers could be exacerbated by the outflow of West Australians travelling elsewhere once they had the confidence created by an open border.
Mark McGowan's reopening warning
Premier Mark McGowan also used Question Time in state parliament this week to warn of some of the economic impacts the outflow of West Australians might have.
He said tourism in WA had been strong through the pandemic with people spending domestically, but predicted it would not be the same after the borders open.
"I think some of the commentators, particularly from some of the industry groups, don't really realise that once international borders open and Australians can travel freely, overseas in particular, there will be some serious economic impacts," he said.
"And some of the spending power — particularly in retail hospitality and the like and also in local tourism — will go down, because West Australians are, in ordinary years, net exporters when it comes to our tourism spend."
"In other words, we spend more overseas than interstate tourists or both spend in Western Australia."
Mr McGowan said these concerns were not a factor being considered as part of the review into WA's hard border, due to be completed in coming days by the Chief Health Officer.
But he said it was a point he feared many had failed to understand, along with the ramification of restrictions that would come once the border opened.
"In particular, when more cases come into Western Australia, obviously the public health social measures increase, and I think again some people don't understand that some of the impacts — not just health but also economic impacts — are not going to be an upside for Western Australia."
The Premier declared earlier this week that he would make an announcement about WA's hard border by the end of the month.
