Help wanted: Labor crisis shocks California restaurants

LOS ANGELES — Sherry Villanueva’s family of Santa Barbara restaurants employed 350 people before the pandemic took hold and darkened dining rooms across California. Now, with the state’s economy officially reopened, about 250 workers are back on the job.

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

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

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

But instead of full dining rooms, many restaurants are being forced to cut operating hours or leave tables open. Villanueva’s company is offering cash bonuses to workers who recruit new employees.

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

The California Restaurant Association earlier estimated as many as one-third of the state’s restaurants would not make it through the pandemic. For those that survived, the employment gap is a “full-blown crisis,” said Jot Condie, who heads the organization.

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

But in the state’s battered restaurant industry, the return toward normalcy is being slowed by the struggle to find an adequate number of cooks, bartenders, food servers and kitchen staff. Since May 2020, restaurants and hotels have added 420,400 jobs — the most of any sector — but 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.

“If 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 been in a situation like this.”

The sector is notoriously volatile and restaurant employees can 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 can be long, benefits scarce and the pay low, sometimes reliant on tips.

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

Among them: California’s population dropped by 182,000 last year as the pandemic ravaged the economy, scattering workers around the country as many businesses closed. Some workers are hesitant to come back, either over lingering fear of the virus or because 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 people are still receiving 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 future, others took on a new career path.

For some workers who haven’t returned “the trauma and uncertainty of the last year and a half was just too much,” Villanueva said.

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

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

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

On Saturday, Alec Nedelman was enjoying an early Father’s Day celebration with his family at one of Styne’s A.O.C. restaurants in Los Angeles. The attorney said he has just started to return to restaurants since dining rooms began to reopen, and also was looking forward to having them available for business meetings.

“It’s still a mixed feeling. You are still a little cautious and concerned,” Nedelman said. But “I’m looking forward to being able to be social again.”

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