PRLA Restaurant & Lodging Matters Summer 2021

10 • PENNSYLVANIA RESTAURANT & LODGING matters • Summer 2021 WHO is Affected by the Labor Shortage in the U.S.? In March and April of 2020, the onset of the COVID-19 pandemic saw the restaurant industry suffer far more job losses than any other sector. In total, 2.5 million food service employees lost their jobs in 2020. But while dining restrictions have now been lifted across the country and restaurants have begun hiring at rapid speed, not all of these workers have returned. This labor shortage has affected restaurants across all segments, but full-service venues have been hit particularly hard, especially in their kitchens where a back-of- house labor shortage appears to be more pronounced. This is true in both small towns and major restaurant cities like New York City. WHAT is a Labor Shortage Anyway? A labor shortage means there are more jobs than people out of work. Though this is a phenomenon that is not often seen within the U.S. economy, the COVID-19 pandemic has turned many industries upside-down and resulted in an acute worker shortage. Currently, there are about 3.5 million fewer people in the workforce relative to February 2020. WHY is There a Worker Shortage? There are several driving forces behind the 2021 labor shortage. The biggest reason for the employee shortage appears to be the fact that many workers have simply left the restaurant industry for more stable jobs. The hospitality industry has a reputation for long hours, low wages, and no benefits—a precarious combination that put many people at risk during the pandemic. When these workers were laid off, many took the opportunity to pursue careers with more stability and have not returned to restaurant work. Stagnant wages (including an unchanged minimum wage and tipped minimum wage) have also meant that many restaurant workers were actually earning more not working due to the boost in unemployment benefits, on top of stimulus checks. This extra income, paired with the safety of staying at home, has made some workers reluctant to return to work—a sentiment that’s unsurprising considering the fact that food service workers had some of the highest mortality rates during the pandemic. But while the pandemic has certainly caused some shifts that have contributed to the current employee shortage, the restaurant industry has always struggled with labor shortages to some degree. Even prior to the pandemic, the Bureau of Labor Statistics predicted that the demand for cooks would steadily increase as new restaurants continue to open and people continue eating out. And as an article from Civil Eats notes, “Although the overall demand for cooks in schools, hospitals, and cafeterias is expected to grow by 6% from 2016 to 2026, the growth for restaurant cooks is expected to grow by 12%. That means the U.S. restaurant industry will need a total of 1,377,200 cooks in 2026, compared to 1,231,900 cooks employed in 2016.” Increased immigration enforcement has also contributed to the restaurant worker shortage because it has reduced the number of undocumented workers. This directly impacts the restaurant industry because it has always relied heavily on their participation in the labor force. What’s more, the number of teenagers in the labor force is half what it was 25 years ago, which makes finding people willing to work entry-level, low-earning positions increasingly difficult and contributes to the overall shortage of employees. These two factors are especially relevant in cities like Miami where there are a huge number of restaurants, an ongoing government crackdown on hiring undocumented workers, and a relatively low state minimum wage compared to the rest of the country. “Although the overall demand for cooks in schools, hospitals, and cafeterias is expected to grow by 6% from 2016 to 2026, the growth for restaurant cooks is expected to grow by 12%. That means the U.S. restaurant industry will need a total of 1,377,200 cooks in 2026, compared to 1,231,900 cooks employed in 2016.” –Civil Eats