Earlier this week we looked at a challenge facing many employers, particularly in the food and beverage industry, focusing on some businesses in South Carolina. They are starting to reopen as vaccination numbers rise, but they’re having trouble attracting their former workers back to their jobs or finding new, qualified applicants to replace them. There are a few reasons cited for this “employment hesitancy” on the part of the workers, but one of the main factors cited was the fact that people are making more from enhanced unemployment benefits than they did on their old jobs. It turns out that this is a phenomenon being seen in many places, including Boston, where a similar story is playing out. (CBS Boston)
“We just need more people to really help us to give the service we intend to give,” said chef Chris Coombs of Boston Urban Hospitality.
Coombs says patrons are eager to dine out again. The problem now is he doesn’t have enough people to serve them.
“The restaurant industry has been so inconsistent for them over the last 12 months that it’s just easier for them to stay home and collect unemployment,” said Coombs.
Interviews that CBS conducted with some of the unemployed workers are revealing in a couple of ways. One of them spoke of the fact that he’s currently receiving nearly $1,000 per week in unemployment benefits, and working in a food service job doesn’t assure that he will make anything near that on any given week because so much of his income depends on tips and how crowded the restaurant is. The government keeps extending the period that people can not only remain on unemployment but receive the federal enhancements (currently good through Labor Day), so there’s not a tremendous incentive to rush back to work.
The other factor being cited, particularly when it comes to bars and restaurants, is the uncertainty the former workers feel about how inconsistent the government was in terms of the shutdowns. Governors and mayors were shutting those businesses down entirely, then partially reopening them when the COVID numbers dropped, then shutting them down again when the numbers spiked. When they were open, social distancing rules limited the number of customers, thereby limiting the number of tips that could be earned. Even the people who were the most motivated to get back to work didn’t know from one payday to the next if their employer would be open the following week.
As we discussed previously, the unemployment benefits enhancements were rushed into without any thought being given to the potential repercussions. Proposed amendments that would have put caps on the benefits to prevent them from being higher than the worker’s previous salary were shot down in Congress. That set us up for part of what we’re seeing today.
The rest of it was driven by the feckless nature of the elected executive officials who couldn’t make up their minds one way or the other and kept lifting and renewing their lockdown orders. While that created confusion on the part of the public, it did far worse for both the workers and employers in the bar and restaurant industry. Owners were spending huge sums of money to make their establishments compliant with social distancing orders and constantly disinfecting everything from top to bottom. Then, after a week or two of limited business, they would be forced to shut down again and repeat the process. The workers they managed to attract were only getting a few weeks of reduced pay before being sent home again. Can we really blame them for hesitating before returning to work at this point?
When this is all said and done (assuming it ever is), analysts are going to have a field day poring over the history of all of the actions and reactions taken across the states. Some did better than others, but there simply have to be some lessons buried in all of that data so we can hopefully screw things up a bit less the next time a new pandemic sweeps into town.
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