The coronavirus pandemic has had a profound impact on the restaurant industry (and its investors) -- and not a good one. It's estimated that more than 10% of all U.S. restaurants have permanently shuttered since the outbreak began in March 2020.
Of course, when restaurants close, it doesn't just impact the people who own those establishments and work there. It also impacts commercial landlords who lose out on rental income in the absence of paying tenants. Plus, restaurants are good for local property values. When too many close in the same place, home prices can creep downward.
Right now, restaurants are facing a host of challenges on the road to recovering from the pandemic. In many parts of the country, capacity limits are still in effect, so dining establishments can only welcome a fraction of the customers they'd normally accommodate. And while many eateries have pivoted to focus on food delivery, they need to outsource their deliveries -- and pay those who provide that service devastatingly high fees in the process.
But these aren't the only issues plaguing restaurants these days. Recently, a new problem has emerged: the inability to find workers.
Why the worker shortage?
At a time when the U.S. jobless rate is still relatively high, you'd think workers would be clamoring for restaurant jobs. But actually, the number of available jobs at food establishments continues to exceed demand.
One reason, according to restaurant owners, is that right now, former employees can earn almost as much money, or in some cases, more, by collecting unemployment. Thanks to the recently signed $1.9 trillion American Rescue Plan, jobless workers are eligible for a $300 weekly boost to their benefits through the beginning of September. Given the wage many workers earned at restaurants, staying home and collecting unemployment makes more sense, especially since many states have also suspended their work search requirements, allowing the jobless to collect benefits without having to prove that they're actively seeking placement.
Other workers, meanwhile, have left the restaurant industry in search of better-paying, more stable jobs. And then there's the childcare issue that's kept a lot of people out of the workforce over the past year. Many school districts have yet to open for full-time in-person learning. For some restaurant workers, a lack of childcare could be keeping them away.
To be clear, restaurant employment has risen each month this year so far, reports the National Restaurant Association. But staffing levels at full-service restaurants are still 20% lower than they were a year ago. That equates to 1.1 million jobs. Meanwhile, staffing at quick-service and fast-casual restaurants is down 6% over the same time frame.
Now, there are steps restaurants can take to attract workers, like offering higher wages and other incentives. But many dining establishments are still grappling with the financial blow the pandemic has dealt and don't have the means to start throwing money at employees.
The good news is that restaurants are now in line for a collective $28.6 billion in relief as part of the American Rescue Plan, and those that receive grants can use their newfound cash to lure workers back in. But whether those efforts prove successful is yet to be determined.