Advantages or bottleneck? American restaurants are struggling to hire workers Business and Economy News


Eva Johannesdottir has been through six kitchen workers since she opened The Cliff restaurant last May. Each time, he invested time and money to train them, but they couldn’t keep up with the demands of serving busy brunch and ordering food at the small cafe in Jersey City, New Jersey, in the United States.

“The biggest challenge of staying in business right now is finding help,” Johannesdottir told Al Jazeera. “One of the main reasons I can’t have the business open more than three days a week now is that I just can’t find workers.”

His problem is not unique. As the capacity limits of restaurants rise and Americans satisfy their accumulated desire for dinner, many establishments have signs of help to collect dust in the windows.

Restaurants were one of the businesses hardest hit during the coronavirus pandemic and ended 2020 with about 3.7 million fewer jobs than they started that year, according to the U.S. Bureau of Labor Statistics.

But as vaccinations have increased and restrictions have been lifted, the demand for restaurant workers has increased again: in March there were 1.2 million offers of leisure and hospitality, but many of these jobs are not being covered.

Like many other restaurant owners in the United States, Eva Johannesdottir has struggled to hire workers as demand for canteens increases after a tough 2020 [Courtesy: Eva Johannesdottir]

Template levels are maintained 14 percent below pre-pandemic levels, found the National Restaurant Association. In an April poll, 84 percent of restaurants said their numbers were lower than they normally would be without COVID-19, and nearly half of them operated with a staff of more than 20 percent below normal.

Restaurants that want to increase their sales after a devastating 2020 are forced by the lack of workers and are paying the price.

It can cost nearly $ 6,000 to find, examine, and train an hourly worker, a to study by the Toast restaurant platform found, and this is in an economy when all the other restaurants are also not looking for servers, waiters, cooks, dishwashers and staff in front of the house.

According to experts, staff shortages are motivated by a number of factors, from bottlenecks and workers not finding childcare services to people changing careers. But one factor, in particular, has become a political lightning rod: the $ 300 federal weekly surcharge on state unemployment benefits, which some argue as a disincentive for people to go out and look for work.

“A lot of people are like, well, I’ll just enjoy the summer, spend time with family, keep collecting, and then go back to work in September,” Johannesdottir said.

Debate on benefits

In New Jersey, state unemployment benefits exceed $ 731 a week. Add the $ 300 federal surcharge and that’s $ 1,031 a week. In comparison, a person who works full-time with the state minimum wage of $ 12 per hour earns $ 480 per week.

Some of Johannesdottir’s employees at The Cliff are hourly and others are salaried, with the lowest salary starting at $ 16 per hour. Still, the luxury of balancing improved unemployment benefits cannot be afforded, especially because food prices have skyrocketed.

“Margins are so small, especially for a place like mine that doesn’t have a liquor license,” Johannesdottir said. “If you got everyone a salary level equal to or higher, I don’t think we would survive.”

According to the U.S. Bureau of Labor Statistics, there were 1.2 million jobs in leisure and hospitality in March, but many of those jobs are not being filled. [File: Mary Altaffer/AP Photo]

Twenty-five states have announced plans to withdraw from the federal unemployment benefit program, which includes the $ 300 weekly surcharge, all led by Republican governors.

But many experts argue that it is an oversimplification to claim that higher unemployment benefits are the only reason restaurant owners have trouble hiring right now.

Ioana Marinescu is an assistant professor at the University of Pennsylvania and a faculty researcher at the National Bureau of Economic Research.

Marinescu said his research shows that while unemployment benefits can reduce the number of applications and make people more demanding, “the main cause of the difficulties is simply congestion in the labor market: everyone is trying. hire at the same time “.

And because of the unique circumstances of the pandemic, the fact that hiring traffic jams “doesn’t match a proportional increase in unemployment,” he says.

Marinescu explained that profits are a “double-edged sword,” and noted that their own existence kept people’s incomes protected, so they would first have money to spend on companies like restaurants.

Challenges for child care

Summer vacations for schoolchildren in the U.S. typically begin in June, and many schools across the country remain remote or hybrid learning models as they head toward the holidays.

While unemployment benefits have been the focus of many theories as to why workers are not rushing backwards, “a strong argument can be made that the cost of caring for children is so important, if not more so, to restrict labor supply, ”Bob Schwartz, a senior economist at Oxford Economics, wrote in a note last week (PDF).

Continuation of remote or hybrid schooling and the high cost of the child care factor, why some Americans have not returned to work [File: John Minchillo/AP Photo]

Schwartz points out that in the year before the pandemic, “nursery and early childhood price increases were surpassing 30% above the core inflation rate.”

Because the cost of caring for children has risen faster than that of many other goods and services, “there is no reason to believe that this will not happen again and will prevent less paid women from returning to the workforce this time around. “, added.

Johannesdottir believes the childcare crisis, combined with the federal recharge, is a major problem.

“If there’s a restaurant worker who gets unemployment plus supplemental income and stays home with the kids, there’s no reason for him to go back to work,” he said.

She and her husband have made their own daycare sacrifices to keep their restaurant open. In July, they sent their two young children to Iceland to live with Johannesdottir’s mother so they could continue school in person.

It’s a hard summer

Johannesdottir currently operates with about half the staff it needs, but expects things to be easier in the autumn, when the supplementary unemployment benefits end and children return to face-to-face schools and daycare centers.

Many restaurant owners are waiting to see if interest in their jobs returns after the expiration of the $ 300 federal surcharge for state unemployment benefits in September [File: Wilfredo Lee/AP Photo]

“This summer will be long and hard, but if I can get to September, I know things will change for the better,” he said.

Summer does not have to be hard, said economist Marinescu. She proposes one “Stimulating job losers” – this would allow workers to continue to receive the $ 300 federal surcharge until the end of the program in September, even if they returned to work sooner, which would increase hiring while providing a safety net.

The data show that “most people have jobs before benefits expire,” he said. But expect to see an increase in job applications just before the deadline. For those waiting, however, “it will be harder to find work because you will have the opposite phenomenon” of many applicants for the same roles, he explained.

As the demand for restaurants finds a balance with the supply of labor, Johannesdottir hopes that his customers will give a little grace to his staff.

“We’re coming out of this pandemic,” he said, “but we can’t expect everyone to be where we left off before.”

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