(The Center Square) – New York City’s restaurants are among the businesses that have suffered the most during the COVID-19 pandemic, but as a full reopening appears in sight, there’s one more challenge they face.
Owners and business advocates say there are not enough people applying for jobs to fill the positions they need to operate, and many say it’s due to a pandemic-related subsidy that unemployment recipients receive.
However, workers and their supporters say restaurants need to offer better wages to not only attract workers but retain the ones they already have.
“Tens of thousands of restaurant workers do not want to go back to work to earn poverty wages putting their lives on the line,” Saru Jayaraman, president of One Fair Wage, said in a statement. “Now is the time to change that.”
One Fair Wage is a national group that seeks to improve conditions for tipped workers and others in the service and hospitality industries.
Last week, the organization released a survey of more than 340 New York restaurant workers that indicated half have considered leaving their job since the COVID-19 outbreak began more than a year ago, with 90 percent of the disenchanted claiming the low wages and tips were a reason why.
While the pandemic forced New York restaurants to cut staff due to capacity restrictions and other limitations that encouraged diners to use takeout and delivery services, those who continued working saw their wages go down substantially due to a lack of tips.
In New York, 82 percent of restaurant workers reported a decrease in tips, with 59 percent saying theirs dropped by at least half during the pandemic.
Meanwhile, those currently out of work and drawing unemployment in New York are earning up to $805 per week in benefits thanks to the $300 weekly subsidy the federal government approved in the American Rescue Plan in March.
That benefit is scheduled to run through September, although a number of states have already announced they’re ending it early.
Philippe Massoud, who owns a Lebanese restaurant in Manhattan’s Flatiron District, told the New York Post earlier this month that he’s been unable to hire the workers he needs.
“If I was working a back-breaking job and making $600 a week and I had had the option of making $600 and not breaking my back – the choice is obvious,” he said.
The One Fair Wage report noted that some restaurants have taken the initiative to raise wages on their own and found the workers they need. They said a proposed federal law would “level the playing field” for all businesses.
The Raise the Wage Act, sponsored by U.S. Sen. Bernie Sanders, I-Vermont, would raise the minimum wage for all workers – including tipped employees – to $15 an hour by June 2025, with a cost of living adjustment in ensuing years.
However, a study by the Congressional Budget Office on the bill offers a mixed assessment at best on what impact the bill would have on businesses and employment.
Raising the wage to $15 within four years would reduce spending on Supplemental Nutrition Assistance Program (SNAP) by $10.3 billion over 10 years and reduce spending on the Earned Income Tax Credit by $7.1 billion over the same time.
However, the report also noted that restaurants would likely see some of the largest price increases as a result.
What it may mean for restaurant jobs is also uncertain.
“Some researchers have suggested that during and after periods of high unemployment, a larger-than-average share of firms open or go out of business, and employment might be more responsive to a higher minimum wage under such conditions,” the report stated. “But it is also possible that many of the workers who in normal times would be projected to lose their jobs because of a higher minimum wage, such as restaurant workers, have already lost their jobs because of the pandemic. In that case, the bill’s effect on employment could be weaker.”