Advantages or bottle neck? U.S. restaurants are struggling to hire staff for Business and Economic News
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Eva Johannesdottir has been working with six kitchen staff since The Cliff restaurant reopened last May. Each time, he invested time and money to train them, but they couldn’t keep up with the busy brunches and orders they took at a small cafe in Jersey City, New Jersey.
“The biggest challenge in staying in business right now is finding help,” Johannesdottir told Al Jazeera. “One of the main reasons I can’t open a business more than three days a week right now is because I can’t find employees.”
His problem is not unique. As restaurant capacity limits are raised and Americans are eager to dine, many establishments have signs that they “want help” gathering dust in their windows.
The restaurant was among the most affected businesses in the coronavirus pandemic and ended in 2020 with about 3.7 million fewer jobs than it had started in the year, according to the U.S. Bureau of Labor Statistics.
But as vaccines have increased and restrictions have increased, the demand for restaurant staff has come back: 1.2 million leisure and hospitality jobs were opened in March, but many of those jobs are not being met.
The level of staff is maintained 14% below previous pandemic levels, found by the National Restaurant Association. In an April survey, 84 percent of restaurants said the number of employees is lower than it would normally be without COVID-19, with nearly half working at more than 20% of the normal staff level.
Restaurants that are eager to increase sales after a devastating 2020 are finding themselves squeezed by staff shortages and are paying the price.
It can cost nearly $ 6,000 to find, project and train an hourly employee, a examination according to the restaurant platform Toast has been found, and that is in the economy, when all other restaurants are not even looking for waiters, bartenders, cooks, dishwashers and domestic front desk staff.
Experts say the shortage of staff is driven by a variety of factors, from bottlenecks and staff who can’t find a nursery to people who change careers. But one factor in particular has become a political lightning bolt: charging $ 300 a week in state unemployment benefits, some argue, prevents people from taking to the streets and finding employment.
“I like a lot of people, well, I’m going to enjoy the summer, spend time with family, keep gathering and then go back to work in September,” Johannesdottir said.
Discussion of advantages
In New Jersey, the state unemployment award is $ 731 a week. Add a $ 300 federal supplement and $ 1,031 a week. By comparison, a person who works a full-time minimum wage of $ 12 an hour earns $ 480 a week.
Some employees at Johannesdottir in The Cliff are hourly and others are salaried, with the lowest salary starting at $ 16 per hour. However, it cannot match the better unemployment benefit, mainly because food prices have risen.
“The margins are very small, especially for me who doesn’t have a liquor-free license,” Johannesdottir said. “If I get everyone the same or higher salary level, I don’t think we’ll survive.”
Twenty-five states have announced plans to withdraw from the federal unemployment benefit program, which includes an additional $ 300 a week, all led by Republican governors.
Many experts believe that it is an oversimplification to say that higher unemployment benefits are the only reason why restaurant owners have trouble hiring.
Ioana Marinescu is an assistant professor at the University of Pennsylvania and a research professor at the National Bureau of Economic Research.
Marinescu said his research shows that while unemployment benefits reduce the number of applications and people understand more, “the main reason for the difficulties is just the accumulation in the labor market, they are all trying to hire at the same time.”
And because of the unique state of the pandemic, recruitment traffic “does not match the proportional rise in unemployment,” he says.
The advantages are “two-edged swords,” Marinescu explained, as their existence protected people’s incomes, which would first be money to spend on businesses like restaurants.
Challenges in caring for children
Summer vacations in U.S. schools typically begin in June, and many schools across the country are still under distance learning or hybrid models on their way to vacation.
While unemployment benefits are at the center of many theories as to why workers are not being held back, “a strong argument can be made as important as the cost of childcare, if not more, in reducing job supply,” Oxford Economics chief economist Bob Schwartz wrote in a note last week (PDF).
Schwartz noted that in the year before the pandemic, “increases in kindergarten and preschool prices were more than 30 percent of the core inflation rate.”
Because the cost of childcare has risen faster than many other goods and services, “there is no reason that this will not be repeated and will prevent women with lower wages from returning to their current job,” she added.
Johannesdottir believes the nursery crisis – combined with the federal burden – is the main problem.
“If there is a restaurant employee who is receiving unemployment and additional income and stays at home with their children, there is absolutely no reason to return to work,” he said.
She and her husband have made sacrifices in their kindergarten to keep the restaurant open. In July, two young children were sent to Iceland to live with Johannesdottir’s mother to continue attending school in person.
Hard summer
Johannesdottir is currently working with half of the staff he needs, but hopes things will get easier in the fall when the unemployment benefit ends and children return to personal schools and kindergartens.
“It’s going to be a long, hard summer, but as I get to September, I know things will change for the better,” he said.
Summer doesn’t have to be tough, economist Marinescu said. A is being proposed “Stimulus to lose a job” – This will allow employees to continue to collect a $ 300 federal charge until the program ends in September, even if they return to work earlier, which would encourage hiring by providing a safety net.
The data show that “most people take up employment before the benefits expire,” he said. But he expects to see an increase in job applications before the deadline. For those waiting, however, “it will be harder to find a job as opposed to many applicants for the same jobs,” he explained.
As the demand for restaurants finds a balance with the supply of work, Johannesdottir hopes to give his customers a little grace to the staff.
“We’re going to get out of this pandemic,” he said, “but we can’t expect everyone to be where we left off before.”
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