Posted On: May 21, 2021

Restaurant Labor Shortage: Why Are Companies Struggling to Find Workers?

Regardless of what anyone says, we know that restaurant work is skilled labor. Not only do you need exceptional people skills, physical endurance, a good memory, and a knack for conflict resolution, you also need specialized knowledge of food safety, sanitation, liquor law, and more.

Now that the industry is experiencing a shortage of experienced labor (or…any labor, period), we're all about to find out how wide the gulf is between skilled and unskilled restaurant workers. Not only are restaurants understaffed and dealing with a booming demand, but most of the new hires are inexperienced and few veterans are left to guide them.

So…how did we get here? Why are restaurants struggling to find job applicants, much less hire workers? Is the solution as simple as rolling back unemployment benefits? If that's not it, what needs to change?

First: How Big Is The Restaurant Labor Shortage?

According to the U.S. Bureau of Labor Statistics (BLS), there were 12.3 million employed restaurant workers in February 2020, before the pandemic. March, of course, was a blood bath – almost half of all restaurant employees were laid off. The industry regained most of the lost jobs throughout the calendar year, but not all. At the dawn of 2021, the restaurant industry was still down 2.5 million jobs.

As of the latest jobs report, they've gained around 650,000 back this year. That means they're still short by almost 15% of the pre-pandemic workforce.

Full-service restaurants (the sit-down kind) are struggling the most. According to the National Restaurant Association, only 10-12% of family, casual, and fine dining restaurants say they're fully staffed. For quick service and fast casual, those numbers are 20-22%.

Still, everyone's hurting across the board. Almost 40% of restaurant companies – not locations, but companies – are having trouble hiring workers, according to CBS News. Many are reporting few job applications and even fewer that show up for interviews or accept positions.

The talking heads say this is down to the generous unemployment benefits that are still available in many places. But when you ask former restaurant workers about this labor shortage, their answers indicate that government checks are just giving them the chance to leave the industry for other reasons.

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Part Of The Restaurant Worker Shortage Is Because They're Just…Gone

We actually had a restaurant labor shortage – particularly back-of-house – before the pandemic, due to Trump-era immigration policy.

In 2014, before the clamp-down, undocumented workers made up 9% of the hospitality industry, and documented immigrants made up another 12%. In other words, more than a fifth of the hospitality workforce was already diminished by four years of an immigration squeeze.

In March 2020, borders closed, freezing documented and undocumented immigrant labor at the reduced levels.

In areas with a high cost of living, strict lockdown rules, or both, many industry workers apparently picked up and left town for cheaper pastures – or for areas where lax pandemic restrictions let them put their skills to use. While we don’t have any good numbers, there's a lot of anecdotal support for this contributing to the worker shortage. Managers contact former staff only to learn they now live elsewhere.

And, of course, some workers actually died. A University of California San Francisco (UCSF) study calculated "excess mortality" by job during the pandemic. They found that the industry with the highest number of additional deaths was food and agriculture, which includes restaurant work.

The pandemic caused a whopping 39% increase in death for the entire sector. Back-of-house restaurant workers were especially at risk due to crowded conditions, poor ventilation, and high take-out demand at the height of COVID's spread. Cooks actually had the highest increase of any occupation: 60% more deaths than an average year.

There's a Worker Shortage Because Many Are Still Scared For Their Health

Restaurant workers that avoided infection saw many of their coworkers get hospitalized. Over half of restaurant workers know someone who died of COVID.

They're also likely to have risk factors themselves. One study found that between 49.7% and 61% of essential workers are at increased risk for a severe case, should they catch COVID-19, due to health and lifestyle conditions.

Now masks are optional, indoor dining is on, and these at-risk workers have no way of knowing who is vaccinated. This especially concerns workers in areas with low vaccination rates.

They don't have to worry if they're vaccinated, right? Many restaurant workers aren't fully protected yet. Despite their "essential hero" label, they were excluded them from early eligibility in most places. Those without qualifying conditions only became eligible for their shot in mid-March or even April, and it can take up to 6 weeks to gain full protection.

The restaurant industry's lack of health insurance (or, at best, subsidized plans they can't afford) also became a dealbreaker for workers over the last year. Many who were laid off became eligible for free or affordable health care under ACA, so going back to their old jobs means losing their insurance. Some have experienced that peace of mind for the first time in their lives. Understandably, they don’t want to give it up.

The Restaurant Worker Shortage is Partly Because Many Switched To More Stable Jobs

You know how people are always telling food service workers, "get a better job"?

Some did.

In the past, it wasn't so simple – the churn of not enough money, long hours, and exhausting work made it impossible to think of anything but getting by. Going back to school? With what money? And job interviews are hard to schedule when you can be called to work at any time (and be fired if you say no).

As this year exacerbated all the problems in the industry and brought unworkable instability to the restaurant job market, many took that time (and increased unemployment) to evaluate their options and make a change. Cyclical layoffs made the decision easier and made a worker shortage almost inevitable.

Some were snapped up early on by online retailers for warehouse work, and despite the labor issues in that industry, many found it to be an improvement: regular hours, more benefits, and physical challenges not so different than they're used to.

Undocumented immigrants – ineligible for unemployment – took whatever work they could find if restaurants laid them off. Construction never stopped in many places, so they changed careers

According to a UC Berkeley/One Fair Wage report, 53% of all workers have considered leaving their restaurant job during the pandemic. In a survey by Joblist, their most desired new careers are jobs in offices, retail, warehouse/factory, and healthcare.

Ultimately, Restaurant Worker Shortages Are About Saying No To Terrible Working Conditions

The fact is, the challenges of the pandemic were just the last straw for many employees. They commonly report that multiple layoffs and extended unemployment made them realize how exploitative their jobs have always been.

For older restaurant workers with a decade or more in the industry, being out of the grind made them aware of how unsustainable their jobs are as they age.

Even under the best circumstances, the work itself is physically, mentally, and emotionally demanding – and the best circumstances don't exist in most restaurants. From the workers' perspective, the restaurant labor shortage is actually a wage and basic respect shortage.

Labor violations are common, including no time to eat or take a break. They usually go unpunished, because workers can't afford to refuse shifts, speak up for their rights, or even take sick time. Missing a shift might mean no groceries that week. Requesting a day off can get you fired, even if you're clearly ill. For undocumented workers, there's the threat of calling ICE.

And then there's the way workers are treated – regularly berated by supervisors and customers, often for circumstances beyond their control.

The pay leaves most workers struggling to meet their basic needs. Sure, some make a killing off of tips, but most don't. Since 1991, the federal minimum wage for restaurant servers and tipped employees has been $2.13 an hour. Theoretically, tips should make up for that but often don't.

On top of all that, wage theft is rampant, including tactics like requiring unpaid work, ignoring overtime and failing to meet minimum wage requirements, shaving hours, skimming tips, and other tricks.

According to an Economic Policy Institute report, the Department of Labor investigated 9,000 restaurants over two years as part of a compliance sweep. They found that 83.8% of these restaurants committed wage and hour violations…to the tune of $56.8 million in back pay for 82,000 workers.

Honestly, who would want to go back to that?

It's Time for Industry-Wide Change in Food Service

Restaurants that offer rarities like a living wage, benefits, or respectful working conditions report they've having no problem finding labor.

Instead of blaming unemployment or laziness, we should take this "labor shortage" as a wake-up call to the industry. Right now, employers are drawing people in with higher wages, signing bonuses, unheard-of benefits, and other incentives out of desperation. That's great, but these changes can't dry up when the worker shortage does.

We need a permanent change in the workplace culture for food service. Restaurant workers deserve a living wage, humane work conditions, and the courtesy of respect in exchange for making the dining experience possible.

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