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Restaurants struggle to rehire workers due to unprecedented pandemic jobless payments

The $300 federal weekly jobless payment is currently added to state benefits as part of President Biden's American Rescue Plan Act that he signed in March.

Updated: April 27, 2021 - 9:45am

The Facts Inside Our Reporter’s Notebook

As states begin to ease indoor dining restrictions, the food service industry is having a hard time hiring employees, a difficulty owners blame in part on the disincentivizing effects of supercharged federal unemployment benefits, which are paid to individuals on top of their state benefits.

The federal benefit that Congress created in response to the coronavirus pandemic was $600 per week, which amounted to $15 per hour before state benefits were added in.

The number of workers eligible for jobless benefits expanded during the pandemic. For the first time, self-employed workers are also able to collect unemployment benefits.

House Majority Leader Steny Hoyer said recently that the $600 weekly supplemental jobless benefits were "very, very hard for any employer to replicate."

When the $600 ended after July 31, 2020, former President Trump signed an executive order reinstating the federal jobless payment at $400. Later, Trump signed into law a $900 billion stimulus package, which lowered the federal payment to $300, where it has stayed ever since. President Biden's American Rescue Plan originally called for a $400 payment, but the final stimulus package that passed the Senate last month was $300 through September 4, 2021.

Eric Terry, president of the Virginia Restaurant, Lodging, and Travel Association, pointed to the unprecedented amount of the jobless payments as the reason for a shortage of food industry employees.

"I think some people are more comfortable not coming back to the workforce right now and collecting unemployment," Terry said, according to a WTVR news report.

Oceanfront restaurants in Virginia Beach are reportedly not able to hire enough workers ahead of the busy summer season.

"The lack of labor is a big problem," said George Kotarides, owner of three Dough Boys pizza shops, according to a report from the Virginian-Pilot.

A chef in Boston said that restaurants need more workers to survive.

“If you're getting $750 a week from the state plus $300 from the federal government, you can plan and budget your life accordingly based on those numbers," Chris Coombs told local CBS affiliate WBZ4. "Coming back into a restaurant as a server or a cook, it comes with great risk."

In Alabama, business at restaurants is increasing, but food establishments are having a hard time finding staff to meet the demand.

"It's a challenge not only getting applicants to apply, but when they do apply, sometimes they don't even come in for an interview," a restaurant owner told WVTM 13. "You've gone on unemployment, and people can sit at home and make the same exact amount sitting on the couch, so it's kind of hard to get people to work."

There's also a worker shortage for New York City restaurants. 

Some food establishments are turning to signing bonuses and other incentives to attract workers off of the unemployment rolls.

In Ohio, bars and restaurants are offering "pandemic pay bonuses." 

Hoyer, a Maryland Democrat, said "theoretically" if a worker who was laid off during the pandemic is offered a job, they are supposed to lose their jobless benefits if they turn it down, but he's not sure that rule is being enforced.

"Theoretically, if they were offered the job, they were required to come back on, but whether that happened, I don't know," Hoyer said during a roundtable with business owners. "We certainly don't want to have a program that dissuades people from taking jobs that are decent paying jobs."

On Sunday, Senate Majority Leader Chuck Schumer urged restaurant owners in New York City to apply for relief under a $28.6 billion program in Biden's American Rescue Plan that provides grants to restaurants across the nation.

"Hopefully, at some point in June, money will be in our restaurateurs' hands so they can stay alive and stay open until, God willing, COVID is over and the streets are full and the restaurants are full once again," he said.

Amid the struggle to find workers in the food industry, the Biden Administration announced a decision to increase the number of available foreign guest worker visas by 22,000. The move was met with bipartisan criticism.

"Given that U.S. unemployment remains elevated in many H-2B-reliant industries, this is no time to release additional H-2B visas," said Sens. Dick Durbin (D-Ill.), and Chuck Grassley (R-Iowa) in a joint statement. "We hope that the Biden administration will work with Congress to reform this program to ensure it better serves Americans and guest workers."