Labor Shortage Takes Toll on Service Industry Labor Shortage Takes Toll on Service Industry

SYRACUSE, N.Y. (NCC News) — Few Syracuse restaurants have garnered more buzz over the years than the Ale ‘N’ Angus pub on Harrison Street.

The pub has won the award of “Best Burger in New York” in five of the last 10 years, including this year, for three different burgers. Its place directly next to the OnCenter has made it a popular downtown location over the years. But lately, its problem hasn’t been a lack of customers, it’s been a lack of workers to serve them.

“Right now, our hours are Monday through Thursday 11 a.m. to 4 p.m., Friday 11 a.m. to 8 p.m. and closed on the weekends,” said Randy Beach, the owner of the Ale ‘N’ Angus pub.  “We were a staff of 13. Right now, we have been a staff of four. My wife Holly comes down to help out with some paperwork and whatnot. She’s not on our payroll. But it does include my son and myself and two cooks in the kitchen.”

Beach says competition is to blame for the labor shortage, but not from another restaurant.

“We are in competition with the government now for staff,” said Beach. “The unemployment with the extra kick-in that they have has forced a lot of the lower wage workers to actually maintain their unemployment status. And they don’t really want to come back to work until they actually get out and start making money.”

As the pandemic subsides, a record number of job openings have been recorded, with 9.3 million in April setting a national record dating back to 2000, according to the U.S. Department of Labor. Millions of those jobs, however, remain unfilled, especially in the service industry. Restaurateurs such as Beach have cited the extension in the $300 weekly pandemic unemployment benefits as the key reason for the labor shortage.

“If a dishwasher can make 500 bucks a week or 600 bucks a week for sitting home, he’s not going to make that here,” Beach said. “He’s not going to make it at Panini’s next door, he’s not going to make it at Blue Tusk down in Armory Square, he’s just not going to do it. So  until they can knock off the extra 300, the extra money that they needed during COVID, then we’re going to be in this boat.”

While the benefits are a high profile target, some economists are less adamant that they are the driving force behind the shortage.

“It is much more complicated, but it is easy to target the benefits, of course, because they are so salient,” said Alfonso Flores-Lagunes, professor  of labor economics at Syracuse University. “In my view, many things have changed during this pandemic, and we have to understand that these are very unusual times in several aspects.”

One of these aspects involves worker priorities. The U.S. Bureau of Labor Statistics says that 4 million people quit their jobs in April alone, and Flores-Lagunes says workers are more likely now to try and climb up the perceived job hierarchy rather than stay in the same place for an extended period of time.

“There are some workers that are working towards that particular goal of getting some skills that will allow them to get better jobs,” Flores-Lagunes said. “With not only better pay, but also a better array of benefits, like for example, health insurance and and childcare benefits and things like that.”

While acknowledging the federal unemployment benefits do play a role in the labor shortage, Flores-Lagunes says businesses may have to adapt regardless in giving their workers an incentive to stay.

“A better compensation package is going to entice the worker to choose to work for a particular business or not,” Flores-Lagunes said. “And that’s typically what businesses do not want to hear because that is an increase in costs.”

But Beach says costs for restaurants are already too high thanks to the increase in food prices this year.

“Prices have never been so high,” Beach said. “A case of chicken wings right now is $150 plus. Hamburgers, Angus burgers, we’re looking at $4 a pound. So an 8-ounce Angus burger alone would be $2 for the raw material before we even cook it. Put the bun, the sides and all that. Our profits of what we’ve got to work for are very minimal.”

Despite the drastic shifts to the labor market, Flores-Lagunes thinks it will eventually subside.

“It’s not surprising that after a shock, we kind of reassess,” he says. “And it will take a little while for ourselves to just kind of go back to normal.”

But for now, Beach says he, his son, his wife and his two other employees have to make due.

“We just put our head down and work hard,” he said. “That’s what we do.”

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