Why the restaurant industry created no new jobs last month

Since Kayleigh Caamaño and her husband, Jann, opened a pizzeria three years ago in Stephenville, Texas, filling vacancies has never been a problem.

“We’ve always had trouble hiring good people, but we’ve never had a problem hiring people,” Caamaño said. That’s partly because the restaurant is located about a mile from the Tarleton State University campus, where some 14,000 undergraduate students were enrolled last fall.

“Now it’s become the place where people just don’t apply,” she said, or the few people who ghost-apply after interviews or quit before they even start work.

Caamaño’s experience matches what many other restaurant owners have likely faced.

In the catering sector in particular, the payroll fell by 42,000 in August

Last month, no new jobs were created in the leisure and hospitality industry as a whole, according to the jobs report released on Friday. In total, some 235,000 jobs were created in the United States last month, well below the 720,000 jobs predicted by economists.

In the restaurant industry in particular, payrolls fell by 42,000 in August.

Restaurants were struggling to recruit and retain employees before COVID-19

Even before the pandemic, recruiting and retaining employees “had been the industry’s biggest challenge for many years,” said Hudson Riehle, senior vice president of research at the National Restaurant Association, a trade group that represents more than 380,000 restaurants. Long hours and harsh working conditions come with relatively low pay for restaurant servers; the median salary was $24,190 per year in 2020, according to the Bureau of Labor Statistics.

That challenge intensified as more Americans got vaccinated and started dining out again. “As consumers have increased their use of restaurants, industry traffic has increased, creating an increased need for employees,” he told MarketWatch. In January, 8% of restaurateurs considered recruiting and retaining the workforce as their main challenge; by June, that number had risen to 75%, the highest level on record, according to an august report by the National Restaurant Association.

High demand for workers in other industries, care responsibilities and safety concerns associated with COVID-19 are collectively preventing workers from taking jobs in the restaurant industry, Riehle said.

Economists blame the lackluster August jobs report – and the fact that no new jobs were added in the leisure and hospitality industry, which includes restaurants – mainly on the highly delta strain transmissible from COVID-19.

“It is plausible that many employees have decided to ‘abstain’ from the delta peak and use the time to seek jobs with better pay and safer working conditions,” Aneta Markowska and Thomas said on Friday. Simons, economists at Jefferies, in a note. referring to the leisure and hospitality sector.

Caam’s is located near a college campus, which usually makes it easy to recruit employees, but lately hardly anyone has applied for five open positions, co-owner Kayleigh Caamaño said.

Photo courtesy of Kayleigh Caamaño

“We struggled to help at the source [talent] in the hospitality industry,” said Richard Wahlquist, president and CEO of the American Staffing Association, a membership organization representing recruiters and hiring managers.

“It’s plausible that many employees decided to ‘sit down’ the peak of the delta and use the time to look for jobs with better pay and safer working conditions”

— Aneta Markowska and Thomas Simons, economists at Jefferies

“The delta variant has held back labor supply,” he told MarketWatch. The members he works with “see more hesitation to return to the workforce than they would have expected.”

Caamaño is skeptical that delta is the reason she and her husband can’t fill job openings

“A lot of people here don’t take COVID seriously,” Caamaño said. College kids may be put off working in restaurants because of COVID, she said, but that doesn’t seem likely to her, given that “they don’t mind going out to eat or going to bars.” .

Currently, she and her husband are looking to hire a courier, bartender, pizza cook, food prep cook, and dishwasher. Her team of 11 employees managed to do without additional employees during this year, she said.

“My husband and I are trying to figure it out, but we really can’t figure out why people don’t need to work.”

— Kayleigh Caamaño, co-owners of Caam’s

But recently the restaurant had to temporarily stop serving lunch on weekdays while one employee was on vacation and two others couldn’t work after being exposed to someone who tested positive for COVID-19.

Caamaño did not consider raising the salary of the vacancies; the restaurant already pays more than neighboring establishments because it allows employees to keep their tips in addition to their hourly wages, she said.

She also doubts the extra unemployment benefits are stopping people from applying for jobs, as Texas was among 26 states that cut unemployed workers off the extra $300 a week in unemployment benefits early, before they expired this weekend. -end.

“My husband and I are trying to figure it out, but we really can’t figure out why people don’t need to work,” Caamaño said.

Also read: ‘Looks like they just tossed a coin’: Restaurants struggle after running out of bailout funds

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Cecil N. Messick