With rock music blasting, Steve Wirth mopped the floor of his restaurant, Digger’s Ales N’ Eats, on a Thursday morning as he and his staff prepared for the day ahead.
Usually, someone else would be cleaning the floors, but the Main Street restaurateur has grown accustomed to it in the past few months, after the coronavirus pandemic caused his business to shut down and then open back up again with limited capacity and restrictions.
The pandemic caused Digger’s to lose part of its staff. Wirth still has loyal employees who work on a consistent basis, but he said he has still been trying to hire more help during the last few months, with limited success.
“Finding people in the back of the house, that’s been the hardest challenge,” Wirth said. During Memorial Day weekend, he had to turn customers down at the door and pull a bartender to work in the kitchen because he didn’t have enough staff to meet the demand. “There’s just not as many people in the business as there was, I guess.”
There were more than 1.3 million job openings in food services in April, according to the U.S. Bureau of Labor Statistics — a 32% increase from the same month in 2019. Help wanted signs are common in Riverhead restaurants and food chains, even as the coronavirus restrictions wane, the vaccinated population increases and people become more comfortable going out to eat.
Wirth shared a few theories on the reasons for his reduced staff. One of them is that potential employees are flocking to restaurants on the south shore, where outdoor restaurants are more busy in the summer than a pub like Digger’s. Another is that the coronavirus crisis’ halt on immigration has spread workers thin.
Wirth also believes that 2020 made some workers in the restaurant industry consider its fragility and a different career. “I would imagine a good percentage of people chose other forms of employment for security’s sake,” he said.
Then there is the impact of enhanced unemployment benefits, which has been a topic of recent debate across the country. “Unemployment is an incentive not to work,” Wirth said.
The enhanced unemployment benefits were approved as a part of the pandemic relief plan at the start of the pandemic and have been renewed twice since as a part of federal stimulus packages. The initial enhanced benefit of $600 per week lasted from April to July 2020, when it was reduced to $300 after the economy began to reopen .
Half of states in the country are ending the enhancement early over the same concerns expressed by Wirth and other business owners: a labor shortage. In New York and other states that have chosen not to end the enhancements early, the money runs out in September.
“It’s hard to get people,” said Robert Gerety, the vice president of the Suffolk County Tavern and Restaurant Association. “They all want the best shifts. A lot don’t want to commit on a night that they think it’s going to be slow because they’d rather sit home and collect a check. It’s a struggle. It really is a struggle.”
Riverhead’s unemployment rate is the same as before the pandemic started, and Suffolk County’s is about a point over its pre-pandemic number. “Hiring is up not only for food services, but also for nearly every other sector.
So why are food services lacking workers?
David Wiczer, an assistant professor of economics at Stony Brook University and researcher on labor, said there is some legitimacy to the theory that unemployment benefits discourage people from returning to the workforce. In a normal economy, Wiczer said, about one-third of people who are unemployed don’t collect benefits as they seek other employment — but the pandemic, the recession and the benefit enhancement increased that number to about one-half.
The enhancement may have also changed how workers look for jobs. “Unemployment benefits might make a worker demand a higher wage,” he said. “If there are more workers getting these benefits, then that of course also makes the hiring task more difficult.”
Wiczer said that most people prefer working in a job to being unemployed, even if they make a lower wage. “Being unemployed is scary,” he said.
Food services workers, however, are an exception to that fear. Restaurants are more likely to have high turnover rates with their workers, he said. And since there are more jobs available in food service, workers don’t feel that same fear of losing a job opportunity and are more comfortable being unemployed, he said.
To incentivize applicants and to compete with other businesses, some employers are offering higher wages or hiring bonuses. This is a strong way to compete in the labor market, Wiczer said, and because of the food industry’s high turnover rate, only a small risk to food service businesses.
“I think that the firms that don’t offer the incentives are making a calculation that you’re okay getting a slightly lower quality worker or taking longer to get the worker,” Wiczer said.
But for smaller restaurants, raising worker wages on top of already rising business costs would mean a price increase for their menus, Gerety said, something that restaurants would like to avoid for their customers.
“The cost of booze, the cost of food, the cost of everything is going up,” Gerety said. “They say the economy’s great, but the cost of doing business is becoming astronomical.”
With summer vacation in view, Gerety hopes that the incoming population of college students returning home will allow restaurants in Suffolk to hire more workers.
And even though the past year and a half has been hard for his business, Wirth said he sees the enthusiasm of both his employees and his customers changing. It’s helping him see the light at the end of the tunnel.
“The pandemic hopefully is coming to an end. I think after the summer, once we get to October, if everything is back to normal, it’ll feel like it never happened,” Wirth said. “But we’ve just got to hold on until we get there.”
Support local journalism.
Now more than ever, the survival of quality local journalism depends on your support. Our community faces unprecedented economic disruption, and the future of many small businesses are under threat, including our own. It takes time and resources to provide this service. We are a small family-owned operation, and we will do everything in our power to keep it going. But today more than ever before, we will depend on your support to continue. Support RiverheadLOCAL today. You rely on us to stay informed and we depend on you to make our work possible.