Benefit or bottleneck?American restaurants have difficulty recruiting workers | Business and Economic News


Eva Johannesdottir has experienced six kitchen workers since she reopened her The Cliff restaurant in May last year. Every time, she invested time and money to train them, but they couldn’t meet the demand for busy brunch and takeaway orders in a small coffee shop in Jersey City, New Jersey, USA.

“The biggest challenge in continuing to do business now is to ask for help,” Johannes Dottier told Al Jazeera. “One of the main reasons why I cannot be open for more than three days a week is that I cannot find workers.”

Her problem is not unique. With the lifting of restaurant capacity restrictions and Americans indulging their repressed desire to eat out, many places have “help” signs on the windows.

According to data from the US Bureau of Labor Statistics, restaurants are one of the most severely affected businesses during the coronavirus pandemic. By the end of 2020, there will be about 3.7 million fewer jobs than at the beginning of the year.

However, with the increase in vaccinations and the lifting of restrictions, the demand for restaurant staff has returned: 1.2 million leisure and hotel positions were vacant in March, but many of them were not filled.

Like many other restaurateurs in the United States, Eva Johannesdottir has been working hard to recruit staff as the demand for catering is picking up after a difficult 2020 [Courtesy: Eva Johannesdottir]

The staffing level remains unchanged 14% lower than pre-pandemic levels, Discovered by the National Restaurant Association. In an April survey, 84% of restaurants stated that their staffing levels were lower than normal without COVID-19, and nearly half of the restaurants had staffing levels that were more than 20% lower than normal.

After a devastating 2020, restaurants eager to increase sales find themselves constrained by labor shortages-they are paying the price.

The cost of finding, screening, and training hourly workers is close to $6,000, Learn Discovered by the Toast restaurant platform, this is in an economy when all other restaurants are not looking for waiters, bartenders, chefs, dishwashers and front desk staff.

Experts say that the shortage of personnel is caused by a variety of factors, from bottlenecks and the lack of childcare services for workers to people changing jobs. But one factor in particular has become a political lightning rod-the $300 weekly recharge of federal state unemployment benefits, which some people believe prevents people from going out to find work.

Johannesdottir said: “A lot of people say, well, I just want to enjoy the summer, spend time with my family, continue to collect, and then go back to work in September.”

Interest debate

In New Jersey, the maximum state unemployment benefit is $731 per week. Add in a federal recharge of $300, or $1,031 per week. In contrast, a person working full-time at the state minimum wage of $12 an hour earns $480 a week.

Some employees of Johannesdottir of The Cliff are paid by the hour, while others are paid, with a minimum wage of $16 per hour. Despite this, she still cannot afford the increased unemployment benefits—especially when food prices are soaring.

“The profit is so small, especially for places like me that don’t have a liquor license,” said Johannes Dottier. “If I raise everyone’s salary to the same or higher level, I think we will not be able to survive.”

According to the US Bureau of Labor Statistics, there were 1.2 million leisure and hospitality job vacancies in March, but many of these jobs were not filled [File: Mary Altaffer/AP Photo]

25 states have announced plans to withdraw from the federal unemployment benefit program, which includes a subsidy of $300 a week, all of which are led by Republican governors.

But many experts believe that it is too simplistic to say that higher unemployment benefits are the only reason for the current recruitment difficulties for restaurant owners.

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

Marinescu said her research shows that while unemployment benefits may reduce the number of applications and make people more critical, “the biggest cause of difficulties is simply the congestion in the labor market-everyone is working hard to recruit at the same time.”

She said that due to the unique circumstances of the pandemic, hiring traffic jams “have not increased the unemployment rate accordingly.”

Welfare is a “double-edged sword”, Marinescu explained, noting that the existence of welfare protects people’s income, so they can first spend money in restaurants and other businesses.

Parenting Challenge

The summer vacation of American school children usually starts in June, and many schools across the country are still in distance learning or mixed mode before the vacation.

Although unemployment benefits have been at the center of many theories about why workers don’t rush back, “a strong argument can be made that childcare costs are equally important, if not more important, in suppressing labor supply,” Bob Oxford Economics Research Senior economist Schwartz wrote in a report last week (PDF).

Continued distance or blended education and high childcare costs are reasons why some Americans have not returned to work [File: John Minchillo/AP Photo]

Schwartz pointed out that in the year before the pandemic, “prices of day care and pre-kindergarten rose more than 30% above the core inflation rate.”

He added that because the cost of childcare is rising faster than the cost of many other goods and services, “there is no reason to believe that this will not happen again and restrict low-income women from returning to the labor market.”

Johannes Dottier believes that childcare austerity — plus federal subsidies — is a major problem.

She said: “If a restaurant worker is receiving unemployment benefits and supplementary income, and staying at home with the children, then there is absolutely no reason for them to return to work.”

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

Tough summer

Johannes Dottier’s current staff is only about half of what she needs, but she hopes that by the fall, when the supplementary unemployment benefits are over and the children return to school and childcare centers, things will be easier.

After the $300 federal subsidy for state unemployment benefits expires in September, many restaurant owners are watching whether their interest in work will resume [File: Wilfredo Lee/AP Photo]

“This summer will be long and difficult, but if I can make it through September, I know things will get better,” she said.

Economist Marinescu said that the summer is not necessarily difficult.She proposed one “The stimulus of the unemployed” -This will allow workers to continue to receive $300 in federal subsidies until the end of the program in September, even if they return to work before then, which will promote recruitment while providing a safety net.

She said the data showed that “most people start working before benefits expire.” But she does hope to see a surge in job applications before the deadline. However, for those who are waiting, “it will become more difficult to find a job because you will encounter the opposite phenomenon,” and many applicants play the same role, she explained.

As the demand for restaurants and the supply of labor strike a balance, Johannes Dottir hopes that her customers can give her staff a touch of elegance.

“We are coming out of this pandemic,” she said, “but we really can’t expect everyone to return to where we left before.”


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