Restaurant sales in the United States are booming, but employment lags behind – Quartz

The pandemic has hit the restaurant industry hard in the United States. More than 110,000 American restaurants closed permanently or long term due to the pandemic last year, with nearly 2.5 million jobs lost from pre-pandemic levels, according to the National Restaurant Association.

But business is coming back.

As people come out of lockdowns during the pandemic, they look to get out and eat again. Total restaurant and bar sales reached $ 67.3 billion in May, topping $ 66.2 billion in February of last year, according to census data analyzed by the National Restaurant Association. (Adjusted for inflation, this number is about 3% lower than pre-pandemic levels.)

But the leisure and hospitality sector is also facing a labor shortage. In May, 186,000 jobs were created in food services and drinking places, according to the United States Bureau of Labor Statistics, which means employment in the sector is still down 12% from to pre-pandemic levels.

So why the lack of catering staff? The reasons are linked to the pandemic, from the slow pace of hiring to fears related to the coronavirus. The shortage is pushing restaurants from mom-and-pop stores to big chains like McDonald’s to offer higher wages and bonuses that will keep workers coming back.

Does automation play a role?

With today’s workforce challenges, restaurants are doing more with less. During the pandemic, every restaurant has had to log in in one form or another, whether it’s launching a website or working with food delivery apps. These orders did not require servers, waiters, or dishwashers to complete. “That’s part of the reason you could get by with fewer workers,” says Sucharita Kodali, analyst at Forrester.

The recent discrepancy between the employment and income figures reflects the shift from retail to e-commerce, where retailers have easily moved to e-commerce, writes Daniel Zhao, an economist at recruitment site Glassdoor, in an e- mail. It is not yet clear whether employers in the restaurant industry are turning to more automation to deal with labor shortages. “If takeout and delivery orders decline as Americans go out to eat more, it will be difficult for employers to rely on automation rather than internal staff,” he says.

Economists say we’ll have to wait and see how restaurants adjust to the new post-pandemic normal to understand if automation increases.

Restaurant workers are gaining influence, for now

There is the question of whether restaurant employment will return to pre-pandemic levels. Hotel and restaurant workers are quitting at the highest rate on record, suggesting some workers are moving into better jobs. decide to switch to greener pastures, ”Zhao explains.

But worker leverage may be short-lived, says Heidi Shierholz, an economist at the Economic Policy Institute, a left-wing think tank. While some employers are raising wages, others are offering one-off bonuses, a signal that companies – which balance pent-up demand with a shortage of workers – perceive the shortage of employees as a temporary problem. Signing bonuses have nearly doubled since last May, according to data from Indeed. She argues that wage growth is about the same as it would have been had the recession not taken place.

“To the extent that there are currently shortages in the transfer of power to workers, allowing them to be a little more selective, but we are quickly coming out of this recession, as if things will be back to normal, and there is no was nothing that permanently changed workers’ “status vis-à-vis their employers,” says Shierholz. Most of the job gains in May were in restaurants and bars.

For workers to gain lasting bargaining power, policies will have to change, such as passing a federal minimum wage of $ 15 or the PRO Act, which would strengthen union participation, Shierholz says. “You’re not going to reverse four decades of policies that transferred power to employers with a very temporary increase in demand for labor,” she says.

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