Some Columbia restaurateurs are pessimistic. Workforce issues will soon change | Food drink
On May 6, South Carolina Gov. Henry McMaster announced he would end the state’s participation in any federal unemployment benefit programs related to the pandemic.
The reasoning for the move focused on what has become a common explanation for 25 other states that have taken similar action: people have to return to work, and the benefits were a deterrent. In a press release announcing the move, which went into effect on June 30, McMaster was quoted as saying this.
âBusinesses in South Carolina have borne the brunt of the financial impact of the COVID-19 pandemic. Those who survivedâ¦ are now facing an unprecedented labor shortage. “
The move met with backlash for perhaps missing the point.
Many industries have faced and continue to face severe labor shortages. Among the worst and most visible, the shortage in the restaurant industry. In Colombia, some restaurants have suspended service on certain days or closed completely.
But some have argued that the industry’s poor working conditions with low wages and benefits are a bigger cause than COVID-19 unemployment measures.
The problem is far from local. Data from the United States Bureau of Labor Statistics detailed that in May, employment was down about 12% from pre-pandemic figures. This represents approximately 1.5 million jobs.
Industry magazine QSR details that the least affected businesses in the industry are places like limited-service cafes and restaurants. On the other hand, only one in 10 full-service operators felt they were at or above normal staffing levels.
There is no question that the industry needs help, but will incentivizing workers by removing benefits be the answer? According to Free Times’ conversation with industry players, optimism is low.
âI think it’s kind of common sense that it hurts the overall economy and then obviously micro-economies like the restaurant business in Colombia,â said Steve Cook, owner of Saluda’s and president of the Five Point’s Association. “But I have to be honest with you, I never really put too much emphasis on unemployment benefits which suck people out of unemployment, especially in the restaurant industry.”
Cook explained that this comes at a contrasting time for the industry, as places like his are experiencing high activity.
Even his upscale restaurant is starting to get stressed out about the job, he shared. Saluda’s staff were mostly preserved during the pandemic, but thanks to “natural attrition” they are laying off workers and finding few people in the pipeline.
This problem permeates other spaces, such as the retail industry adjacent to restaurants. Cook said his orders were being delayed from usual times, due to labor shortages in food distribution.
At Columbia-area chain Lizard’s Thicket, restaurants have lost about 100 employees from their typical 700, owner Bobby Williams reported. This resulted in a loss of quality of service and subsequent complaints from customers.
And recently, during their weekly training courses for new recruits, no one was attending.
Williams, also president of the South Carolina Restaurant and Lodging Association, was instrumental in reopening the state’s hospitality industry as a member of the Governor’s Advisory Board. But he, too, was lukewarm that the labor shortage would be resolved quickly.
âEveryone’s hoping and a lot of politicians have hung their hats on ‘This is why we are the way we are’,â he said. “But I just think a lot of people have left the restaurant industry for other industries.”
Despite Williams and Cook’s reservations, Joey Von Nessen of the University of South Carolina was more optimistic. The economist at the college’s Darla Moore School of Business said it’s important to take note of the total âeffective wageâ of unemployment benefits – what they equate to hourly wages.
That was about $ 16 an hour, which he said is a similar amount, or sometimes higher, than what many earn in the food and beverage industry. Typically, the equivalent unemployment wage is low enough that it does not have a major effect on the job search desires of potential job seekers.
He expected that in the next 30 to 60 days, we would start to see potential changes in the workforce, in part because of the governor’s decision.
He also cited other factors that play into unemployment decisions, giving examples of health reasons and parental needs. The economist warned that it may be “too early to disentangle these factors” to find a single answer to the labor shortages.
Further, he noted that the struggles in the state were an ongoing problem exacerbated by the pandemic. Now that industries are reopening in droves – what he described as an âeconomic boostâ – this has created a labor-friendly market, which means they have greater bargaining power.
This gives credence to the idea that workers could have left the industry to find jobs with higher wages, flexibility and benefits, a dynamic that usually occurs in a âbooming economyâ. he declared.
âThe recession we have experienced over the past year is unique, we have never seen it before,â said Von Nessen. “This is the first time we’ve seen this level of $ 16 an hour for unemployment assistance.”