By Maura Kay, Consultant, Analytics
Our Workforce Series will be examining the way the pandemic, Great Resignation, worker's rights movement, and other factors are reshaping the way we work.
Further Great Resignation research reveals that the great job reshuffle may be a more apt name.
What gets lost in this high-level discussion of labor statistics are industry-level trends. While BLS cited record quits (3% in November 2021), the number of replacements remains high. meaning workers are taking new jobs rather than leaving the workforce altogether. Workers left leisure and hospitality at more than double the national quit rate in November 2021 and the downward trend continued into December, typically a month that sees high numbers of seasonal hires. Within the larger industry, accommodation and food service experienced the highest quit rate in both months, at 6.6% in November and 6.1% in December.
While industry trends headed into 2022 suggested staggering losses in food and accommodation, BLS reported employment gains in January. In January, leisure and hospitality added 151,000 jobs, with over 70% of those gains in foodservice and drinking establishments.
Despite January’s gains, employment has remained down 10% since February 2020. The leisure and accommodation industry has not returned to full capacity since the onset of COVID.
What drives workers to leave food service at higher rates than other industries?
Foodservice is rife with inequities. Most states maintain subminimum wages for restaurant workers, with 19 states holding as low as $2.13 an hour, expecting tips to make up the living-wage balance. Tips are not guaranteed, however. In their 2020 State of Restaurant Workers Report, the Restaurant Opportunities Center found the median hourly wage of restaurant workers was $11.65. In states with the $2.13 hourly wage, women and/or people of color are more likely to be in poverty than their white male counterparts. Restaurant workers are more than twice as likely to be in poverty compared to the overall workforce.
Unemployment insurance often shouldered the blame for disincentivizing work throughout the pandemic. However, UC Berkeley Food Labor Research Council found that workers behaved similarly no matter their access to unemployment insurance. Over half of the respondents, 54%, stated they would only return to the restaurant industry for higher paid, living wage positions. Only 16% were open to returning to a previous low-paying position when benefits expired.
As previously discussed, workers are in demand, and they know it. A saturation of open positions leads some employers to drop or rethink hiring requirements. In as much as entry-level accommodation and food service positions, one stood out lacking educational or other requirements; now, other industries are following suit. In such a context, if the factors pushing workers out of one industry align with the pull factors of another, sector switching may be more attainable. According to national literature and surveys, the work environment, pay structure, and tipping are operating as push factors.
While Joblist’s second-quarter 2021 survey found higher pay (45%), better benefits (29%), and more schedule flexibility (19%) as reasons workers left hospitality, the majority of respondents (52%) cited the desire for a different work setting as their driver for switching sectors.
While kitchens have long been notoriously challenging work environments, their lack of remote options may have further exacerbated their comparison to at-home work during COVID.
The work environment covers a wide range of variables. First, public-facing work environments during the pandemic meant a more significant risk of exposure. A 2020 UC Berkeley survey of restaurant workers found the majority, 69%, worked in settings where employers did not consistently follow proper COVID protocol. Almost half of the workers, 44%, reported that at least one of their coworkers contracted COVID in 2020.
Toxic environments can create domino effects, as quitting may exacerbate additional push factors. Non-regular schedules or wages also impact work environments.
Closures, exposures, or limited capacity meant fewer shifts last year. More irregular shifts or fewer hours meant docks in pay. Most challenging to workers was that COVID-related disruptions to public-serving work continued to lead to instability in paychecks. In December 2021, 3.1 million workers saw their workplaces close or lose business due to the pandemic. This nearly doubled to 6 million disrupted workers in January 2022.
Americans reliant on their next paycheck to cover living expenses may opt for consistent, salaried work, if available. As job openings remain high, at around 10.9 million at the turn of the year, salaried work is available. With a glut of open job positions, workers no longer have to settle for less-than-preferable wage structures. Industry opposition to gradual increases or cost-of-living adjustments to minimum wages is backfiring.
In addition to stable salaries, good benefits are a necessity for workers during a pandemic, not a luxury. The shortcomings of tying health insurance to employment when many in the industry could not work are evident. A 2019 industry survey found less than one-third, 31%, of restaurants offered health insurance.
While debates over ending tipping culture are not new, the pandemic prompted a resurgence in the discussion. A 2020 survey of 1,600 tipped workers found 83% experienced dips in tips, with 66% reporting losses of at least 50% since the start of COVID. With dine-in service exchanged for take-out, tips declined.
In addition to suffering in the COVID environment, tipping’s reliance on personal taste can eclipse the recognition of labor exchange. Tipping is another expression of customer rudeness, and, anecdotally, rudeness is on the rise. In oa business owner decided to do away with tipping in 2015, recognizing it took the ability to reward merit away from owners and gave it to customers.
Harassment, especially sexual harassment, can also increase under tipping culture. In the same 2020 survey, 40% of restaurant workers found a noticeable change in the proliferation of unwanted sexualized comments in the workplace since the start of the pandemic, with 25% of respondents directly receiving or witnessing such statements.
With increasing attention given to mental health needs in other industries, including mental health breaks, workers in the restaurant industry lack widely-available support. Restaurant worker advocacy groups have been busy providing basic needs and monetary aid to workers. Lack of healthcare compounds these push factors, leaving workers without access to mental health services.
Full abolition of tipping may not be the immediate answer, especially in competitive locations. However, hybrid models of tipping on top of higher hourly wages would mitigate financial and mental health challenges. Instead of being dependent on tipping, tipping would function more like a bonus.
Restaurants are core components of economic attraction and main street strategies. Retaining restaurant workers will require improved work environments, stable pay structures, and mental health support. Communities and economic development professionals can help retain restaurant talent by promoting worker-centric practices.
In the next part of this series we'll be exploring the role that communities and economic development professionals can play in mitigating the challenges restaurant workers face and keeping the doors of their favorite eateries open.