Sheila Kennedy: Connecting some dots in the hospitality industry

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Restaurants are beginning to reopen—something for which we are all grateful. According to media reports, however, a number of them are having trouble finding workers.

Republicans like Mitch McConnell have highlighted those reports, using them to bolster the long-standing GOP argument that government assistance creates “dependency.” They have consistently criticized the “generosity” of unemployment insurance checks, and now claim that restaurant workers would rather collect benefits than go back to work.

A July 2020 study by Yale economists found that—politically convenient as that GOP argument may be—the data doesn’t support it. The research found that unemployment benefits didn’t create a disincentive for job seekers.

Researchers estimate that the pandemic has cost America 2.5 million restaurant jobs and closed more than 100,000 eateries, so it is worrisome that, just as the nation begins to return to whatever “normal” looks like, so many restaurants that did survive can’t find staffers.

And it does seem that restaurants have been harder hit than other enterprises. A recent Brookings Institution report looked at Census survey data from early April and found that 37% of small businesses in the hospitality and food sectors were affected by worker availability, compared to 16% for all small businesses. So, if those Yale researchers are right, and the dearth of restaurant workers isn’t attributable to sloth enabled by unemployment compensation, what’s causing the problem?

Timing might be one cause. When everyone is trying to hire at the same time, it’s harder to find workers. Add caution. Easing of the pandemic does not equate to defeat of the pandemic. Many workers—especially those who will face the public as servers, hosts and the like—remain fearful, and not without reason.

But a substantial reason for the problem is Donald Trump’s immigration policy.

Restaurants (and for that matter, farmers) have long been dependent upon immigrant labor, and Trump’s policies (if disdain for Black and brown people can be dignified by the label “policy”) sharply curtailed the supply of those workers. Worse, a 2020 study from “The Eater,” an industry publication, pointed out the extent to which restaurants rely on undocumented workers—and documented the ways employers routinely exploit them.

The study also found—contrary to anti-immigration propaganda—that undocumented immigrants pay billions in taxes and a higher effective tax rate average than the top 1% of taxpayers (8% versus 5.4%).

As they often work in the back of house—as line cooks, busers, dishwashers and janitors—these workers are largely invisible to the dining public, despite being the backbone of the industry. Many are unable to obtain health insurance. Most didn’t receive a $1,200 stimulus check from the government. Many forgo getting tested for COVID-19 or obtaining care, for fear of deportation.

The next time GOP officials use the scarcity of restaurant workers as evidence that government largesse causes “dependency” (a dependency that somehow doesn’t affect the wealthy and corporate beneficiaries of sizable subsidies), you might politely connect these dots.

Are these adamant opponents of (Black and brown) immigration willing to pay significantly higher prices for that hamburger? Prices will have to rise if restaurant owners have to pay something close to a living wage to attract workers in a tighter (and whiter) labor market. (For the record, I would be willing to pay more if I could be confident that the people waiting on my table—whatever their ethnicity or immigration status—were being paid a fair wage.)

Blaming the scarcity of workers on unemployment compensation might be consistent with GOP ideology, but reality is more complicated.•


Kennedy recently retired as professor of law and public policy at the Paul H. O’Neill School of Public and Environmental Affairs at IUPUI.

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3 thoughts on “Sheila Kennedy: Connecting some dots in the hospitality industry

  1. Typical left-wing, academic Sheila Suess Kennedy blather. Disgusting.

    Screw your high-falutin’ “Yale Economist’s study,” and snide remarks about President Trump, Ms. Kennedy; rather, talk to some restaurant managers about why they can’t find people to work. I’ve talked to two such mid-price, casual-dining restaurant managers this week and they both said, “If the government would quit printing and handing out money, we could get people to come back to work.”

    Descend from your academic ivory tower and try life in The Real World for a change…if you dare…

    (How tragic that people like you are given a podium from which to speak…and are likely paid to do so. What a waste of reader time and printing ink your every column seems to be.)

    1. I’ve got an idea for Republicans. Join the Democrats and pass legislation that makes employers pay a livable wage! Plenty of people would be applying for restaurant jobs if they paid enough money to afford a decent apartment. Restaurants have to pay $15/hr where I live and there weren’t a plethora of closures when that happened. Sure, prices went up, but not astronomically. And no, I don’t think $15/hr is necessarily needed nationally, but $7.25/hr is evil.