Help wanted: Labor crisis shocks California restaurants

Sherry Villanueva’s family of Santa Barbara restaurants employed 350 persons prior to the pandemic took hold and darkened dining rooms across California. Now, with the state’s economy officially reopened, about 250 workers are back face to face.

Villanueva would hire 100 more if she could - but she can’t find persons to take the openings.

“We are amid a very serious labor shortage,” said Villanueva, owner and managing partner of Acme Hospitality, which operates eight eateries in the favorite seaside destination, though two remain closed. With staffs stretched paper-napkin thin, the employees “are doing the job of two different people.”

California fully reopened its economy on June 15 and did away with limits on capacity at restaurants, retail stores and other businesses. Folks are eager to return to sporting events and carnivals and enjoy a meal out.

But rather than full dining rooms, many restaurants are having to cut operating hours or leave tables open. Villanueva’s company is offering cash bonuses to employees who recruit new employees.

The worker shortage can be affecting restaurants over the U.S. The National Restaurant Association has reported the eating and drinking industry shed 2.5 million jobs in 2020. Federal data show practically 1.4 million job openings in the restaurant and hotel sector in April.

At the Served Global Dining restaurant in Henderson, Nevada, a NEVADA suburb, chef-owner Matthew Meyer said he requires a dozen or more persons to fill positions over the board, including cooks and bartenders.

Plans for a seafood raw bar, to-go kits and a chef's table to serve special tasting menus are on hold because he can't find enough workers. Meanwhile, his labor costs are up by a third because he provides more money to lure applicants. Even then, the last two he had scheduled for interviews never showed up.

"We are having extreme difficulties," he said.

The California Restaurant Association earlier estimated as much as one-third of the state’s restaurants wouldn't normally make it through the pandemic. For all those that survived, the employment gap is a “full-blown crisis," said Jot Condie, who heads the organization.

Democratic Gov. Gavin Newsom is keen on saying that California’s economy is roaring back. Indeed, employment figures released last Friday showed the state added over 100,000 jobs in May, the fourth consecutive month of gains after 2.7 million jobs vanished through the early months of the pandemic.

But in the state’s battered restaurant industry, the return toward normalcy has been slowed by the battle to find an satisfactory number of cooks, bartenders, food servers and kitchen staff. Since May 2020, restaurants and hotels have added 420,400 jobs - the almost all of any sector - however the industry remains about 450,000 jobs below its pre-pandemic level.

In Los Angeles, Caroline Styne, owner and wine director at The Lucques Group, has turned away dozens of customers because she didn't have the staff to serve them, leaving seats empty.

“In the event that you can’t fill your seats ... multiple times per evening, the financial structure of the restaurant doesn’t work,” Styne said.

“Hiring is a nightmare,” she added. “I’ve never experienced a situation such as this.”

The sector is notoriously volatile and restaurant employees could be a transient lot - students who drop in-and-out of shifts as time allows, aspiring actors and musicians looking to supplement their income, kitchen staffers who move on for bigger paydays elsewhere. The hours could be long, benefits scarce and the pay low, sometimes reliant on tips.

Styne, Villanueva and other industry specialists visit a web of factors conspiring to create the scarcity of job applicants.

Included in this: California’s population dropped by 182,000 this past year as the pandemic ravaged the economy, scattering personnel around the country as many businesses closed. Some personnel are hesitant another, either over lingering fear of the virus or as a result of frayed nerves after struggling through on-and-off lockdowns, home isolation and shifting health regulations.

Extended federal unemployment benefits have provided a cushion to stay home - about 2 million persons are still getting checks. In other cases, there's a child care problem with schools closed or in recess for summer. And after a long break from work to ponder the near future, others took on a new career path.

For some staff who haven't returned “the trauma and uncertainty of the this past year . 5 was just an excessive amount of,” Villanueva said.

Meyer, the Nevada chef, faults the extended government benefits for the lack of job applicants. “As long as they keep offering free money, that’s where persons are in,” he lamented.

Restaurants and hotels have already been “ground zero” for the labor shortage, but other sectors have been struggling to fill jobs, including non-union construction and home healthcare, said Michael Bernick, a former director of the California Employment Development Department and an legal professional with the Duane Morris law firm.

For ailing restaurants, a turning point might not exactly come until late summer, when increased federal benefits end and schools reopen.

Even then, “There still may be a shortage and then either wages will rise sufficiently to attract personnel or hospitality venues will find that they have to change their delivery models,” Bernick said within an email.

On Saturday, Alec Nedelman was enjoying an early Father's Day celebration along with his family at one of Styne's A.O.C. restaurants in LA. The attorney said he has just started to return to restaurants since dining rooms started to reopen, and in addition was pumped up about having them available for business meetings.

“It's still a mixed feeling. You remain just a little cautious and concerned,” Nedelman said. But “I'm pumped up about having the capacity to be social again.”