As more and more states across the United States begin to relax restrictions related to the Communist China virus (COVID-19) outbreak, restaurants large and small are grappling with a common dilemma: hiring staff.
Recently, restaurant owners and store managers from New York, California, Washington and Chicago have told the English-language Epoch Times that hiring staff has become a nightmare amid a litany of challenges such as restricting indoor foot traffic regulations. During the epidemic, they say, federal unemployment benefits are pushing people even more to choose to stay home rather than go to work.
Many restaurants are now embarking on a long, difficult and costly process to return to profitability. Over the past year, anti-epidemic lockdown bans across the United States have shut down more than 110,000 restaurants, some of them permanently.
The difficulty in hiring became especially acute when a McDonald’s in Florida had to pay $50 to encourage people to come in for interviews; and when other large restaurant chains, such as Taco Bell, which needed at least 5,000 new employees, had to hold hiring events in their parking lots.
While the service industry has long had trouble hiring before the epidemic, Hudson Riehle, senior vice president of research for the National Restaurant Association, said it has reached an unprecedented level.
He said, “In January, only 7 percent of restaurants listed recruiting and retaining employees as their top challenge, but by April, that percentage had risen to 57 percent.” Fewer employees, incentives (subsidies) still in place, employee safety considerations, the need to care for family members and the demand for workers among other industries have made competition more intense.
“An American tragedy.”
Mark Fox, who is from Berlin and owns four restaurants in New York, has just seen an upturn in business, but the inability to recruit employees has slowed the momentum.
“We’re having a hard time hiring hourly workers, bartenders, waiters, bar staff, handymen, runners and night cleaners,” he told reporters. “We’re probably still short 60 employees. I have another restaurant in Greenwich Village that just hasn’t reopened yet due to lack of employees.”
Another restaurant, The Ragtrader in Forks, is currently in its fourth week of reopening. During last year’s outbreak, the 300-seat restaurant suffered a serious hit to business. Fox said he lost a sum of money that was devastating. Current revenue levels are only half of what they were in 2019.
The biggest factor behind the hiring difficulties, he believes, is unemployment benefits, for which the federal deadline has been extended again until early September. He stressed that while such benefits were necessary at the beginning of the epidemic, they lasted too long. “It’s not good for people to get back to work, and by extension it puts us in a labor shortage crisis.”
While Fox supports the practice of maintaining a safe social distance, he believes the city’s lockdown restriction order is arbitrary and not based on evidence. “A lot of people have lost their businesses, their livelihoods and their dreams because of this, and I honestly think it’s an American tragedy.”
During last year’s outbreak, New York City and New York State had different restraining orders. Fox pointed out one issue that caused him headaches: in New York City, customers were not allowed to sit at bar counters, but New York State rules allowed it. Because restaurants in New York City tend to be small, the city’s rules have kept many of them from staying open. Fox also mentioned that he had to pay tens of thousands of dollars extra for protective equipment, sanitizing equipment, temperature detectors and more.
“I believe our state and city leaders are not doing their job.” He said, “I think they made an arbitrary decision based on gut instinct, and I hope they are held accountable.”
Andrew Rigie, executive director of the NYC Hospitality Alliance, a nonprofit association representing restaurant establishments, said restaurants are facing a “complex labor shortage” on top of the economic crisis.
Unemployment benefits discourage people from working
Jim Walker, who owns three local restaurants in California and is a former president of the Newport Beach Restaurant Association, said the industry is in disarray.
He told reporters, “There’s a severe shortage of back-of-the-house staff, and those who can come back to work are (constantly) asking for a raise. Finding hostess staff and bartenders is our biggest challenge right now.”
To that end, Walker is now offering bonuses for new employees who stay on for a certain amount of time and bonuses for current employees who refer others to apply for the job. He says business is picking up, but costs are “going up dramatically,” mainly because cattlemen have cut back their herds due to lack of demand, and the price of bone-in ribeye meat has risen $7 per pound in one week.
On top of that, Walker has to pay $100,000 a year in credit card fees. Unemployment benefits discourage people from working, he said. “People are choosing to stay home because they can make more money on the extended stimulus (benefits) than they can working.”
“Those who cross the border might normally become part of the labor market immediately, but they’re not doing that now because the government is currently giving out benefits.” He added, “They also have no incentive or immediate incentive to get a job when they enter the United States.” New York City, for example, has allocated $2.1 billion from the state budget to pay for illegal immigrants who lost their jobs during the epidemic.
“No employee wants to work in California,” tweeted Chef Andrew Gruel, owner of the famous California restaurant chain Slapfish, who also summed up the frustrating state of affairs. “We pay dishwashers a $21 base salary, yet people tell me the two main reasons they don’t want to work: they make enough on unemployment and would rather not work, and the second is that schools are closed and they can’t afford to pay someone to take care of their kids.”
In another follow-up post, Gruel added that not a single person he spoke with was not working because they were afraid of the virus.
Restaurant owner has no choice
Keisha Rucke, owner of The Soul Shack, said her restaurant is understaffed and she has been trying to find new employees.
She told reporters she needs four more waiters, cashiers and cleaning staff. “The people who work at my place can only do multiple jobs. I’m working the cashier myself, and I even have to hire my daughter in to work.”
Two of her friends who also run local restaurants say they have been forced to adjust their dine-in hours because of the lack of waiters. Rooker said she raised everyone’s hourly rate to entice waiters to continue working for her.
She believes there are multiple reasons for the hiring difficulties, including the fact that people are still receiving unemployment benefit checks, which may be higher than the wages they would receive if they worked, or that they are reluctant to leave the house because of the epidemic.