Why restaurants are having a hard time finding staff right now

Boosted unemployment benefits could be one of several reasons.

May 13, 2021, 6:01 AM

Sue Choi and her husband own several Korean restaurants in New York City. For their latest venture, Rib No. 7, they've been trying to hire servers, kitchen staff and hostesses -- but have had few bites so far.

"I don't even get one single phone call, even for the whole week," Choi told ABC News recently.

Upping the pay hasn't helped either, she said. Pre-pandemic, Choi said they would offer $20 an hour for an experienced hostess and get "hundreds and hundreds of resumes." Two weeks after posting a job listing for a hostess at Rib No. 7 for $30 an hour, they still hadn't received one, she said.

"It's kind of scary right now," Choi said.

Choi is not alone. In recent weeks, as COVID-19 dining restrictions have loosened, restaurants nationwide have been reporting staffing shortages. As a result, some have not reopened, are reducing operating hours or are trying to attract applicants with higher wages or signing bonuses.

Much attention has been paid to the impact of boosted unemployment benefits potentially dissuading people from seeking work -- as several governors have announced they will end the extra $300 a week in federal unemployment funds -- though the reasons behind the hiring pains are myriad, experts said.

"There's not one existing issue that's making hiring so difficult in the restaurant industry, but a collective force of many different pressures," Andrew Rigie, executive director of the NYC Hospitality Alliance, told ABC News.

For one, restaurants and bars are all hiring at the same time, he said, as increasing occupancy continues to require businesses to staff up.

Culinary Agents, a hospitality career website, told ABC News it has seen "significant and consistent" increases in job posting volume monthly since the beginning of the year. From January to March, posting activity nationwide increased 10 times, it said. The biggest increases were for front-of-house positions -- like waiters, servers, bartenders and hosts -- "mainly due to increased dining capacity," it said.

PHOTO: A Help Wanted sign hangs in the window of a restaurant in the Greenwich Village neighborhood of Manhattan in New York City, May 4, 2021.
A Help Wanted sign hangs in the window of a restaurant in the Greenwich Village neighborhood of Manhattan in New York City, May 4, 2021. Some restaurants in New York City are starting to hire employees now that they can increase their indoor dining to 75% of capacity starting May 7.
Mary Altaffer/AP

All these restaurants may be competing for a smaller pool of workers, experts said, as people moved away, went back to school or got work in a different industry during the pandemic.

"When we had to start closing dining rooms and we reduced our staff, unfortunately, we lost them to other industries, specifically retail and grocery retail and delivery, Uber, those kinds of things," Melissa Stewart, executive director of the ‎Greater Houston Restaurant Association, told ABC News.

Job seekers may also be looking for remote work during the pandemic; a February survey by jobs site ZipRecruiter found that 60% of respondents said they would prefer to find a job where they can work from home. That doesn't square, of course, with restaurant gigs.

"The restaurant industry is not an industry that you can work in remotely," Rigie said. "You can't mix cocktails on FaceTime."

PHOTO: People eat inside the New Shanghai Deluxe restaurant as indoor dining resumes in the Chinatown neighborhood of New York City, Feb. 12, 2021.
People eat inside the New Shanghai Deluxe restaurant as indoor dining resumes in the Chinatown neighborhood of New York City, Feb. 12, 2021.
Frank Franklin Ii/AP, FILE

Some people may not be able to work at all due to continued childcare disruptions. In a U.S. Census survey conducted during the second half of April, nearly 1 million people said an adult in their household did not look for a job in order to care for children, while over 920,000 said they left the workforce to care for children.

While anecdotal, low wages in the industry coupled with boosted unemployment benefits could be keeping some people from applying. In 2019, the average weekly earnings in accommodation and food services, which includes restaurant workers, was $407 -- about 43% of the average weekly earnings in all industries in the U.S., according to Gary Burtless, a senior fellow in Economic Studies at the Brookings Institution. Depending on how much someone can claim in their state, with the $300 boost, they could be taking home more than what they used to make.

"The generosity of unemployment benefits is no doubt also a partial explanation for why I think a lot of these low-pay establishments in particular are finding it hard to persuade people to come back to work, but it's not just that," Burtless told ABC News. "There is a childcare issue for a lot of families ... and fear of getting COVID in your place of work."

"I think all of these things are going to present challenges to employers, especially employers who think that they should be able to hire restaurant workers at the same pay they were offering before the COVID emergency struck us," he said.

Legally, if someone is offered reemployment and turns it down they're likely to lose their unemployment insurance (though owners do not regularly report to their state labor department, as required, when that happens). Many states also continue to waive requirements for those receiving unemployment to report their efforts to find work.

This month, at least five governors have announced they will cut their residents off from the extra $300 a week in federal unemployment funds in the coming weeks.

"We don't need to pay people to stay at home when employers are begging for workers. And that's what I hear," Arkansas Gov. Asa Hutchinson, a Republican, told ABC News' Start Here on Tuesday.

Still, restaurants and bars have been able to hire. As COVID-19 restrictions continue to ease, the leisure and hospitality industry, which includes restaurants and bars, was the biggest job creator in April, with employment in the sector increasing by 331,000, according to the latest Labor Department report. At the same time, the industry has a long way to go to recover, with employment down by 2.8 million, or 16.8%, since February 2020.

In the Houston area, some restaurants have had success by responding quickly to applicants and offering employee referral bonuses, Stewart said.

Rigie said he is "cautiously optimistic" for the New York City restaurant industry as more people get vaccinated and the economy continues to open up -- including Broadway in September.

"It's just a very difficult time to own a restaurant, to work in a restaurant, and it's going to take time," he said. "We're nearly 16 months into this pandemic that has decimated New York City's restaurant industry, and we're not going to recover overnight."