Half the staff at Demo’s Greek Food quit last month after the owner removed the store’s mask mandate, manager Abel Perez said last week. Now the restaurant on St Mary’s St. is struggling to keep pace with the constant stream of GrubHub, DoorDash, and curbside pickups, not to mention the new influx of walk-in customers arriving as vaccinations continue.
But finding new workers – even with a new television ad – has been glacially slow. The first applicant in weeks was hired on the spot.
“At this point, we’re desperate,” Perez said.
Across the city, restaurants, hotels, and other hospitality employers are starving for workers – a situation some economists say has tipped the scales toward labor. And as workers can afford to be choosier, employers are sweetening the pot.
Bill Miller Bar-B-Q recently raised its starting pay to $12, from the roughly $10 previously offered for many positions before. Whataburger over the past year has given its workers $90 million in bonuses, uncommon in the fast food world.
And on the higher end of dining, the Lawton Family of Restaurants, which includes Cappy’s Restaurant, La Fonda on Main, and the soon-to-reopen Mama’s Cafe, has recently added a new hiring bonus of $300 for workers, doled out over their first few paychecks. It also has increased the bonus given to employees who refer applicants from $500 to $600.
Dawn Larios, executive director of the San Antonio chapter for the Texas Restaurant Association, said she hears about the hiring shortage every day.
Her association is in the process of planning a novel solution: a combination jobs fair and vaccination drive.
The event would take place at the Wonderland of the Americas mall in Balcones Heights later this month, where University Health is set to administer 6,000 vaccines to current and former workers in the hospitality industry, which includes restaurants.
“If they want to work in the industry, they can get a job that same day,” Larios said.
The causes of the hiring shortage are many.
Restaurants nationwide shed 2.5 million jobs over the pandemic, according to the National Restaurant Association, as consumer spending depressed and pandemic restrictions waxed and waned. Hotels became similarly lean. And more service workers left because of the frontline exposure to COVID-19, an inevitability no matter the precautions taken.
The newly unemployed have also been given breathing room to consider their options, thanks to the American Rescue Plan, which extended weekly unemployment payments of $300 until Sept. 6. The $1,400 stimulus checks given to Americans – a little more than a month’s pay at a minimum-wage job – have allowed workers to be more deliberative.
“It’s not because people are lazy or they don’t want to work,” said Keith Phillips, assistant vice president and senior economist at the Federal Reserve Bank of Dallas. “This is an opportunity for you to reevaluate and optimize your income and your job opportunities for you and your family. It makes perfect, rational sense.”
Some workers have left the hospitality industry entirely.
Tracy Black, a career counselor at Workforce Solutions Alamo’s New Braunfels office, said she saw an influx of restaurant and hospitality workers during the first couple of months after the pandemic hit but has seen very few since. Many chose to find jobs in different fields, she said. One man earned a professional license to work on air conditioning systems. Another woman, a mother in San Antonio, landed a job at a social services nonprofit.
“Because they all got laid off at the same time, many just decided it was the perfect time to move on,” Black said.
Industry experts say the hiring shortage is nothing new. The applicant pool started to dry up sometime around the end of last summer, but it has become more noticeable as demand from consumers – a trickle through most of the pandemic – has become a roaring torrent.
Data from OpenTable, an online restaurant reservation company, shows that the number of diners at San Antonio restaurants has skyrocketed in recent weeks. On April 4, there were 62% more reservations and walk-ins than there were on the same date in 2019.
RJ Hottovy, a restaurant analyst at Aaron Allen & Associates who works frequently with large-scale retail chains, said the shortage may become even more dramatic.
“It hasn’t hit a fever pitch,” he said. “But as we start to move toward mass vaccinations and get back toward 100% capacity across the board, that’s when it’s going to become really pronounced.”
The more worker-friendly dynamic unfolding in the hospitality industry isn’t likely to extend throughout the broader economy, said economist Steve Nivin, director of St. Mary’s University’s SABÉR Research Institute.
“The unemployment rate is still pretty high, and the official unemployment rate most likely underestimates the actual unemployment rate,” he said. “Additionally, there are still structural changes in the economy that the labor markets are going to take a while to fully adjust to.
“Given that, I think there is still too much slack in the labor market to call this a worker’s economy.”
The latest figures from the Labor Department put the official U.S. unemployment rate at around 6%, roughly the same as what the Dallas Federal Reserve Bank pegs as the unemployment rate in San Antonio.
Yet the official rate doesn’t capture the nearly 4 million people who lost their jobs in the past year and left the workforce entirely. Economists estimate the true unemployment rate for the economy as a whole at above 9%.
Some of those jobs are coming back, as with the pandemic’s nearing end, the U.S. hired at a blistering pace in March, filling 916,000 new positions, the most in seven months.
At the forefront of that growth has been restaurants, responsible for nearly a fifth of those new hires.