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Across the U.S., restaurants have complained of a labor shortage. But the data, and many current and former restaurant employees, question the narrative that unemployment benefits are the cause. Photo by Kate Townsend, Unsplash

‘Breaking Point’: Restaurant Workers Push Back Amid Unemployment Benefit Crackdown

Ray Smith lost his job last March, like so many others in the restaurant industry. “I got unemployment pretty quick, right before everything came down,” he told the Mississippi Free Press in a May 2021 interview. “I had coworkers who (waited) about a month or two.” Like almost every other worker interviewed for this story, Smith requested a pseudonym, only willing to speak under an assumed name for fear of retribution from management. 

For Smith, who works at a North Mississippi restaurant, a month or two was all the great wave of pandemic unemployment benefits amounted to. “We had about a month and a half fully closed,” Smith said. “Then we were allowed to move to 50%, but business was really slow.”

What happened next illustrates the vise grip many restaurant workers have found themselves in throughout the pandemic. Management demanded workers return to their positions, but often part-time and during shifts with virtually no customers coming in. The industry-wide transition to curbside services left many employees working for the tipped minimum of $2.13 an hour with few tips, if any.

The patchwork of shifts and limited tips left restaurant employees on the edge of underemployment, risking the loss of all their pandemic benefits despite earning well below a living wage, they say.

Management above Smith had little interest in the difficulties their staff faced. “Our owner, our general manager were not very understanding. It’s just the attitude where we live,” he said. 

Now, as the pandemic ebbs, with restrictions gone and new cases kept at a low drip, Smith’s restaurant is still struggling. “We’re desperate for employees, but we don’t have a hiring strategy,” he said. “Our owner thinks our kitchen pays well, but it’s nothing compared to some of the other jobs out there.”

Across Mississippi, a different message emerges from many in the ownership class, with signs plastered across the front doors of restaurants, retail and other low-wage outlets, calling for anyone—everyone—to fill in what they call a labor shortage. 

“No one wants to work anymore,” some of the signs read.

Labor Participation Back to Normal

The panic over a labor shortage quickly traveled from the front windows of restaurants to the halls of power. Statewide leadership tripped over themselves in early May to be the first to address the needs of the state’s business owners by cracking down on what they identified as the heart of the matter: greedy and perhaps even lazy workers. 

“Desperate small businesspeople,” House Speaker Philip Gunn, R-Clinton, wrote on May 10, “report that they cannot get employees to return to work because they can earn more from combined federal and state unemployment benefits than their normal wages.”

The pandemic unemployment benefits had made it more profitable to stay at home than to work, Gunn lamented. “These businesses are no longer suffering from a lack of demand due to COVID-19; rather, they are suffering from a labor shortage caused by unemployment benefits that exceed normal wage levels for productive work.”

Gunn beat Gov. Tate Reeves to the punch, taking credit for what happened next. The same day, Reeves announced an end-date to Mississippi’s participation in the pandemic unemployment benefits from the federal government. No longer would unemployed residents have access to the additional $300 in federal dollars. As of June 12, the maximum will become Mississippi’s meager $235 a week, the lowest in the nation.

Tate Reeves speaking
Gov. Tate Reeves was quick to yield to calls for an end to participation in the federal government’s expanded unemployment benefits amid a poorly evidenced “labor shortage.” Photo courtesy Tate Reeves

“It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled,” Reeves explained on social media.

Roughly half the states in the U.S. have now committed to ending participation in the federal unemployment program as a salve to businesses crying out for additional employees.

Robin Joyce, a Memphis, Tenn., brewery owner, summed up the message that governors across the nation have been hearing en masse, telling WREG News that “(workers are) taking advantage of stimulus money, tax credits, extended unemployment and they would rather accept those benefits instead of coming back to work.”

In Boyle, Miss., Catfish Cabin owner Tara Herrin shared her thoughts with the same outlet. “The work ethic of people is just not there … people are getting money that they don’t have to work for.”

Yoseph Ali, proprietor of multiple Jackson-area restaurants, including Aladdin Mediterranean Grill, takes a slightly different tack. At the height of the pandemic, with a $600 weekly subsidy on top of the state’s existing $235 in unemployment, Ali finds it hard to imagine some people did not take the opportunity for a break. 

“I’m sure that’s the case for some,” he acknowledged.  “I’ll be honest with you,” he told the Mississippi Free Press in an interview in his Jackson restaurant, “If I had that opportunity?” He laughed, waving the idea off. “I’d probably do the same!”

But as the subsidy and the pandemic have dwindled, Mississippi and nationwide data show no yawning gap of unemployed rent-seekers

Late spring and early summer of 2020 brought an enormous decline in labor participation, with the unemployment rate peaking at 15.7% last April. But those numbers have since subsided. 

The unemployment rate in Mississippi has since declined back to 6.2%, only a fraction of a percent higher than pre-pandemic levels. Mississippi’s employment-population ratio, too, is virtually indistinguishable from the months before the pandemic hit.

The data back up what many workers told the Mississippi Free Press, both on and off the record. Mississippians are already back to work, with or without an end to pandemic unemployment. Just not for certain employers.

Disposable Workers Talk Back

With no evidence to support one popular theory—a glut of shiftless, welfare-enjoying Tom Sawyers—what could provide an alternative explanation?

Helen Ralph, a former restaurant employee now in Indianopolis, Ind., wrote to the Mississippi Free Press with a theory of her own. “In the early 2000s, our entire family—immediate and extended—were in the industry in some capacity. Now? No one,” she said.

One reason? Decades of stagnant wages. The $2.13 minimum wage for tipped employees has not changed in a full 30 years, as of 2021. The worker explained to the Mississippi Free Press that she would have qualified for food stamps without the federal subsidies.

“Several servers have left for different industries after realizing how easily they can be discarded,” Ralph said. “I can’t even explain why I stayed as long as I did.”

Chef cutting food in the kitchen
Restaurant workers wrote to the Mississippi Free Press to discuss the difficult working conditions and low wages that, in many cases, have driven them out of the industry in the previous year. Photo by Jeff Siepman on Unsplash.

The return from the pandemic can easily mask deeper shifts in employment trends. Smith identified an income source poaching his restaurant’s staff, but said it wasn’t a check from Tate Reeves. 

“We’re not really competing with unemployment. (Workers) are going to catering companies. They are corporate and provide higher starting pay with benefits and pretty quick upward mobility,” he said.

Ali sees the trends first hand. “It’s a tough business to be in. If you find another job that doesn’t stress you out, that pays better—especially with the whole year being shut down for the restaurant industry, I’m sure people have to think twice before they come back,” he said.

Blake Weil, employed in the restaurant industry in New Orleans, has seen the writing on the wall for years before the pandemic.

“So many workers have left an industry that clearly doesn’t value them, whose model is predicated on them being disposable. Frankly,” Weil said, “a lot of industry people are dead. Line cooks had a higher mortality rate this past year than medical workers.”

Weil’s statement is shocking, but preliminary evidence supports his claim, with a University of California San Francisco study showing cooks had the highest spike in mortality risk during the pandemic of all occupations.

Epidemiologically speaking, with expert opinion coalescing around airborne transmission of the virus as the primary mode of infection, poorly ventilated kitchens are a uniquely dangerous place to gather during the pandemic, with few of the protections afforded to diners. 

Weil has sparse sympathy for those in his industry who have changed little since the pandemic hit. “Look, 90% of restaurant employees were terminated in mid-March last year,” he said. “They didn’t get on unemployment because they’re lazy. They got on unemployment because they were fired.” 

Neither has Weil seen any of the business owners complaining about unemployment payments reject Paycheck Protection Program funds. “These establishments chose not to use that PPP money to rehire workers for hybrid models, or to-go models … the revenue stream has been so enriched, and yet there’s still no willingness to adapt and be competitive,” he said.

“Industry workers didn’t opt out of work. They were all terminated by places that were happy to operate without them, until the pandemic was over.” 

Yoseph Ali inside his restaurant, Aladdin Mediterranean Grill
“There’s more to life than numbers,” says Yoseph Ali, owner of Aladdin Mediterranean Grill, Kebab and Curry, and several other Jackson-area restaurants. Ali says building meaningful relationships with employees has helped him successfully transition out of the pandemic. Photo by Nick Judin

Weil identifies key differences between restaurants struggling to achieve full employment and restaurants—like his—that he says are now doing well.

“We have a higher base pay. We offer health benefits, after a certain period, which is the exception, not the rule in restaurants,” he said. “We’re committed to honoring work-life balance and not perpetuating a culture where the expectation is that you work yourself to the bone all the time.”

Ali, like most restaurant owners, has had a difficult year, his livelihood in the crossfire of the pandemic more than virtually any other industry. But the labor shortage is not his greatest concern.

“Supply and demand is tough. All of a sudden we’re back to 100 percent—it takes time before everything gets to where it needs to be, but hey, if you’re involved, if you’re hands on, if you lose a worker or two, it just means you have to do it,” Ali said, Ali pointing at himself. He cocks an eyebrow as if the answer was obvious.

‘Not Magically Entitled to Labor’

Weil sees the present time as “a moment to grow and adapt to or not. He adds: “If places aren’t adapting and they can’t get staff, well, they’re not magically entitled to labor. That’s not how it works.”

Ali credits his smoother transition out of the pandemic shutdowns to the exact opposite approach.  

“Thank God. I’m blessed. I have people I’ve been working with here for years and years and they haven’t left. They know what we’re going through and they stick with us,” he said. “When you’re hands-on in the restaurant business, you know what workers go through. If I’m an entrepreneur or an owner and I just see nothing but numbers, of course it’s gonna be different. There’s more to life than numbers.”

At Aladdin, Ali tries to balance server schedules and workloads to make sure employees are less likely to be overworked or under-tipped. During the height of the pandemic, he rotated his kitchen staff to keep the back from becoming over-crowded, while still keeping them on payroll. 

Ralph’s days in the restaurant industry are done for good. But she still hopes the industry will change for those who still depend upon it. “I hope that either the industry wakes up and starts paying what people are worth, or let it collapse and start from scratch,” she wrote. 

Smith is still in the industry, but he’s nearing the end of his rope. “I’m about at my breaking point,” he said. “It’s because of the toxic culture. I’m just sick of that. I’ve tried to push on the elements that I disagreed with and was just completely shut down.”

His employers, however, have been quite successful at petitioning Mississippi’s political leadership to crack the whip, abetting their desperate search for more desperate employees.

Ali is sympathetic to the plight of those in an industry struggling across the board—to a point. “In a lot of places, there’s a disconnect between management and workers. If you don’t want to understand,” he shrugged, “people will give up.”

“What’s that saying?” Weil said, laughing. “Capitalism for the workers and socialism for the ownership.”

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