Restaurants are still having hiring problems, even with enhanced benefits gone
Decades ago, Mike Suclescy began a lifetime career in the restaurant industry as a dishwasher. His duties have since expanded as a co-owner of Thurman Cafe, a near-legendary German Village burger joint known for an unpolished interior, unpretentious demeanor and exceedingly generous portions.
But the pandemic forced Suclescy to add dishwasher back to his list of responsibilities because he can’t find anyone to work that job.
"I started out 35 years ago washing dishes, and 35 years later I'm washing again," he said. “It’s tough.”
And the restaurant owner is far from the only one in this predicament.
Restaurant owners complain of being 'ghosted' by job applicants
Even as the unemployment rate falls, wages rise and enhanced unemployment benefits disappear, Ohio restaurateurs say they still have trouble staffing their restaurants. Help wanted signs go unanswered, applicants accept jobs and don’t show up to their first day of work, or they quit after a few weeks.
“There are a lot of people who are just ghosting us after setting up an interview for whatever reason," said Jason Biundo, co-owner of Columbus pizza chain Mikey’s Late Night Slice. "Probably half the people who set up an interview just don't show up.”
Owners said they've paid higher salaries, along with sign-on and retention bonuses, and still face a dearth of applicants. Roughly 90% of Ohio restaurants report problems hiring staff, according to a recent Ohio Restaurant Association survey. Workers, meanwhile, face obstacles of their own — such as a lack of childcare — and find themselves increasingly disillusioned with low-paying restaurant work, an attitude only enhanced by angry customers revolting against pandemic restrictions.
As the economy improves and sales rebound, restaurant owners worry they are facing a permanent problem.
Why are restaurants so short of workers?
The forces underlying the restaurant industry’s hiring woes are a matter of continuous debate.
“There are really two competing theories of why the labor shortage exists,” said Michael Jones, a professor of economics at the University of Cincinnati. “One, more on the right, is that unemployment benefits are too generous.”
Business groups, including the Ohio Restaurant Association, lobbied Ohio Gov. Mike DeWine to end the $300 added to weekly unemployment checks through a coronavirus relief bill approved by Congress earlier this year. DeWine removed the additional benefits from jobless payments in May.
Meanwhile, left-leaning commentators cite a lack of childcare — daycare centers face similar hiring problems — employee harassment and low wages compared to other industries, Jones said. Economic data collected after Gov. Mike DeWine dropped the enhanced benefits should eventually point to one side or the other, he added.
“If that labor shortage persists into the fall and into the winter, that’s going to tell you which one of those wins out,” Jones said.
Chad Kerkhoff cited a lack of childcare as one of the biggest obstacles in his search for work. Kerkhoff, a single father who lives in Cincinnati, lost his bartending job when DeWine shuttered most non-essential businesses in the spring of 2020. All three of the daycares near his home remain closed.
To make matters worse, he sold his car at the onset of COVID to make ends meet, and he has a criminal record, further limiting his job prospects.
"It's not like I don't want to work," Kerkhoff practically shouted during an interview. "I hate sitting here in my house all the time."
Higher pay not worth harassment from diners for some ex-restaurant workers
Preliminary studies already cast doubt on the idea that bigger unemployment checks kept restaurant workers home. The California-based advocacy group One Fair Wage surveyed roughly 300 current and former service workers in states that dropped the added payments. Nearly 60% of those who left their jobs did not plan on returning to the workforce, even without additional financial incentive to stay home, and around 60% of those who remained on the job said they are considering leaving, the survey found.
“If you look at the key findings, cutting unemployment benefits doesn't result in workers coming back,” said Yamila Ruiz, spokesperson for One Fair Wage. “The most frustrating thing for us, as an advocate for fair wages, is we've been saying this for a year and a half.”
Ohio’s hospitality industry lost roughly half its jobs at the start of the pandemic and is recovering more slowly than other sectors of the economy. Major companies like Amazon, Walmart and Target now pay employees $15 an hour or more. JCPenney, for example, announced on Monday that it is hiring warehouse workers for its Scarborough Boulevard facility at $18.50 per hour. And CVS this week raised its minimum wage to $15.
Economists think such salaries convinced restaurant workers to jump ship. While restaurants have generally raised salaries, few mom-and-pop restaurants pay as much as the big box stores or major chains.
“The transportation and distribution sector sprang right back and is now well ahead of where it was” pre-pandemic, said Bill Lafayette, an economist who owns the Columbus-based firm Regionomics. “My guess is that a lot of the folks who got laid off from restaurants went to work in warehouses, so they are not available anymore.”
Restaurant workers may find warehouse jobs appealing after experiencing the harassment aimed at front-line workers, who largely were the ones responsible for enforcing mask mandates and social distancing requirements, Ruiz said.
Ashley Yates is one of the workers who is moving on. She cooks for a northwest Ohio Pizza Hut as a temp worker and plans on switching to retail unless she can secure a restaurant job at a significant pay increase. Grocery store work pays around $5 more per hour than her current salary, she said.
“The pay in the restaurants I've worked in really doesn't do justice to the hard work and effort I apply, and the treatment of workers in the restaurant industry is pretty abysmal,” Yates said.
The northwest Ohio woman enjoys preparing food for customers, but said the compensation simply does not cover her living expenses.
“My last (full-time) restaurant job didn't cover my rent or electric bill,” she said.
Whatever the cause, the consequences of the hiring shortage are undeniable.
Keri Richards, an associate manager for a Heath Fazoli's, said the managers at her restaurant worked up to 60 hours a week until recently because the restaurant couldn't find enough workers.
"Daycare is pretty hard for a lot of our employees, especially the management team," Richards said. "Most of our managers are women with kids, and one of the biggest issues was us finding the time to be able to work (extra) shifts."
Daycare centers in the area cut hours and most now close at 6 p.m., she said. The Fazoli's is open until 10 p.m. on weekdays and 11 p.m. Fridays and Saturdays, making childcare an especially difficult proposition for late shift workers.
Diners throughout Ohio shortened hours and removed tables, cutting into their revenue and depriving them of the cash needed to offset pandemic-related losses.
“One of the things we're seeing right now is restaurants are not opening every day,” Ohio Restaurant Association CEO John Barker said. “For a restaurant to miss maybe three days of their week, the impact that has on their ability to recover is just terrible.”
Late Night Slice, for example, dropped the lucrative midday shift at locations near Downtown Columbus that, in normal times, would be inundated with hungry office workers on their lunch breaks.
“All locations that were previously open for lunch are now closed for lunch,” Biundo said.
And some Ohio restaurants raised menu prices to offset pay raises and bonuses needed to attract workers. Although some owners are reluctant to pass on costs, fearing customers will stop coming.
Is this the end of the tipped worker model?
For Ruiz, the path out of the hiring shortage is obvious: pay every employee, including those who work for tips, a living wage.
“The pandemic showed the precarious nature of relying on tips,” she said.
Servers are generally paid less than minimum wage with the understanding that gratuity will make up the difference. But as fewer people dined out at the height of the pandemic, waiters and waitresses saw their earnings plummet and are less willing to rely on the tips, Ruiz said.
While restaurant owners fear the consequences of a price increase, now might be the best time to try it, Lafayette said.
“Because demand is growing so strongly, they’ll have a much easier time passing those wage increases along to their customers,” he said.