Kirby Lee via AP
A Sonic employee hands a customer a milkshake at the drive-through window amid the COVID-19 pandemic, April 4, 2020, in Victorville, California.
Around the U.S., employers in the service industry are sounding the alarm that a widespread labor shortage is preventing them from hiring enough staff.
Some bosses have blamed unemployment benefits for labor shortages, with signs posted outside restaurants like McDonald’s, Sonic, and Outback Steakhouse that have gone viral, claiming “no one wants to work anymore.” A number of fast-food chains such as Subway and Dunkin’ Donuts have reportedly reduced operating hours while workers in understaffed conditions are dealing with increased workloads.
Other employers have been quoted in various stories criticizing unemployment benefits and blaming federal extended benefits of $300 per week for industry struggles in hiring. The U.S. Chamber of Commerce has called for phasing out expanded unemployment benefits, citing the labor shortage complaints from some businesses.
But are unemployment payments the culprit here? “It doesn’t stand up to scrutiny as a real driving factor,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute. “There is basically a lever employers can pull if they truly are facing a labor shortage of some kind: They can pay more to either attract new workers into the labor force or poach workers who are already in the labor force.”
Shierholz noted there have yet to be signs of significant wage growth in the industries where workers are purported to be in severe shortage, and that previous data during the pandemic and the 2008 economic recession demonstrated that expanded unemployment benefits had minimal to no impact on whether workers returned to work.
A Yale University report published in July 2020 found there was no correlation between the expanded unemployment benefits and whether workers returned to their jobs. More recently, the number of Americans relying on unemployment benefits continues to decline significantly even as extended benefits remain in place.
Rather than raise wages, some restaurant chains have offered hiring bonuses to try to incentivize workers to fill open positions. The sandwich chain Jimmy John’s has been offering $100 sign-on bonuses for new employee recruits.
For many Americans relying on unemployment insurance, the low wages in the food service industry aren’t a viable replacement for the job they lost.
April Marit worked at a Jimmy John’s location in Florida for five years before she recently quit due to the working conditions she experienced throughout the pandemic, and the low pay.
As an assistant manager, Marit worked throughout 2020 making just $9.50 an hour, and received a pay increase to $11 an hour in March 2021, she said, after several employees quit.
A few months into the pandemic, Marit noted demand started to increase and understaffing became the norm. Some customers were aggressive in ignoring COVID-19 safety protocols.
“I stayed because the store had no other staff. New employees would come in, work for a day or two, and then never show back up—and I don’t blame them,” said Marit. “Nobody deserves to be treated the way that customer service staff is these days. Not even for a $15 an hour minimum wage. I sure as heck wouldn’t go back to Jimmy John’s for that, and I loved my job before this.”
For many Americans still relying on unemployment insurance, the low wages in the food service industry aren’t a viable replacement for the job they lost in another industry where pay is much higher.
“I’ll admit I’m being slightly picky on where I work. I want a good job, but the jobs I’ve been applying for, I’ve not even been getting callbacks,” said Josh Kelly of Seattle, who lost his job in insurance at the onset of the pandemic.
The fast-food and restaurant industry was already experiencing the highest turnover rates of any U.S. industry before the pandemic, when restaurant employers also struggled to find workers while avoiding pay raises to do so. According to the Bureau of Labor Statistics, the average wage for workers in food preparation and serving-related occupations was $13.30 an hour in May 2020, and for fast-food workers the average was $11.80 an hour, among the lowest hourly wages of any industry.
Paul Hennessy/NurPhoto via AP
A ‘Now Hiring’ sign outside an Outback Steakhouse restaurant in Orlando, Florida, last month
Gail Rogers, a McDonald’s cashier in Tampa, Florida, and member of Fight for $15 and a Union, explained that the low wages she is paid—less than $10 an hour—have forced her to move into a smaller apartment and she can’t afford the maintenance on her vehicle.
“It’s a struggle. They’re not treating us like people or like we need living wages,” said Rogers. “They’re hiring on the spot, and I don’t think they should because they’re going to slash other workers’ hours in order to bring new people in.”
Twenty-one-year-old Zella Roberts started working as a carhop at a Sonic restaurant in Asheville, North Carolina, at the end of 2020 to help make ends meet while finishing school. The fast-food chain is currently seeking to hire 20,000 employees around the U.S. to keep up with customer demand.
As a carhop, Roberts made just $5 an hour, below the minimum wage, because she relies on tips for much of her income and the tipped-worker minimum wage is just $2.13 an hour. Roberts noted she would often have to work the drive-through window, where she wouldn’t receive any tips but still had an hourly wage of $5.
Earlier in 2021, Roberts started a campaign on Coworker to demand Sonic provide a way for customers to use credit cards to tip carhops. Thousands of signatures later, her campaign successfully pushed Sonic to allow customers to tip by credit card on the Sonic app, but Roberts said this still leaves out the majority of credit card transactions that carhops at Sonic close out.
“I think a lot of people don’t realize their tips are actually making up a huge percentage of the wage we live on,” said Roberts. “During my time at Sonic, I’ve been clocked in as a carhop and expected to take intercom orders, except that’s a separate position that starts at $9 an hour, but I was expected to do that while still getting paid $5 an hour.”
She quit in early April 2021 due to the low pay and poor working conditions, which she said included customers violating COVID-19 safety protections.
“I think that when we talk about low-wage workers and people who work in fast food, there’s this tendency to think we’re not skilled workers. Working in a fast-paced environment like fast food is difficult,” Roberts added. “Fast-food workers deserve a living wage and we deserve dignity.”
