RACHEL WALLACE IS JUST ONE, PERHAPS. But if you’re a restaurateur like Rich Rosenthal, owner of The Cooper, a Max Restaurant Group farm-to-table establishment in Palm Beach Gardens, she’s the one you want working for you or with you (the distinction is sometimes unclear) in the roughest 14-month assault on restaurants across Florida and nationwide since the Great Recession.
The Great Recession began 13 years ago, and Ms. Wallace survived it, cycling through several restaurants both before and after, she recalls, shaping a lucrative career that brought her to The Cooper. “I’ve seen a lot,” she adds, which is one reason she’s loyal to management in her current triple-hit position. She’s a member of the wait staff, she’s the restaurant’s social media manager and she’s an occasional restaurant photographer.
Management, as it turns out, has been loyal and even generous to her and all its employees through the pandemic, she says. They pay well — Mr. Rosenthal also owns nine restaurants in Connecticut, offering full benefits to all his employees North or South — and they reward hard work with money and opportunity, while accommodating employee needs, too, explains Ms. Wallace. As a result, the company has good employee retention.
That’s not always the case in the restaurant business, both in her view and that of many other workers. Even so, The Cooper is operating with a staff of 60 when it could use about 75.
“On the business side we had a terrific winter,” Mr. Rosenthal says. “But staffing all winter has been difficult. And, unfortunately, it’s similar up North. So, we peaked all winter, but we’ve been shorthanded.” Why? “I don’t know, but we can guess,” he says. “The first problem: The government’s generous unemployment wages have kept people out of the workplace. At certain incomes you can make more or as much as you do working.”
That benefit, earlier $600, but now $300 per week, added to state unemployment benefits, comes as part of The American Rescue Plan, the COVID relief bill worth $1.9 trillion signed in March by President Biden, and good through Labor Day.
Mr. Rosenthal isn’t blaming the unemployed for taking available benefits or the government for providing them — and neither did Gov. Ron DeSantis, who also said recently he would encourage people to return to work beginning next month by requiring proof of five job applications per week, in Florida, for those taking state unemployment benefits.
Sen. Rick Scott, criticized openly by Gov. DeSantis last year for entangling Florida’s unemployment benefit system so thoroughly as governor that many workers fired or furloughed couldn’t get any help for months, took a harsher stand late last week. He joined fellow Republican leaders calling to halve the federal unemployment benefit to $150 on May 31, and end it entirely a month later, on June 30. They call that proposal the Get Americans Back To Work Act.
In Mr. Rosenthal’s view, “It would be very hypocritical for me to say that what government is doing as far as unemployment is wrong,” Mr. Rosenthal says. “We’ve been the recipient of millions in PPP money.”
That money comes from the government’s Paycheck Protection Program of business loans designed to help smaller businesses survive the impact of the pandemic. In many cases it won’t need to be paid back.
“I have 10 total restaurants. Five desperately need PPP funds in the second round, and five don’t,” he noted. “We meet the criteria, we’ll take it, but it’s like unemployment: It may be unnecessary in some cases. Government tends to cast a big shadow. They’re trying to be fair to everybody, so they say, ‘We’ll give it to everybody.’ But I’m not sure how the government could do a better job.”
Meanwhile, business suffers.
“This past weekend we did not take as many reservations as we had demand for, because we didn’t have the staff,” Mr. Rosenthal says. “We had a very good week, but we left a solid 10% of our revenue behind.”
The lay of the land
It’s not a desirable circumstance by any means, but The Cooper’s current crisis is less severe than many others in the state, where restaurants and hotels face a challenge both unprecedented and unexpected. The economy is flush, people long cooped up are ready to spend money being fed and entertained, and wages in the business are higher than pre-pandemic wages, while employer benefits such as health insurance and savings plans can encourage family life and careers.
Not only that, but the unemployment rate is now running at 6.1%, which means a lot of people need jobs.
Nevertheless, many restaurants and hotels are painfully understaffed, even though the U.S. Bureau of Labor Statistics reported that the two industries with the biggest job gains in April were hospitality and leisure.
Circumstances for many restaurateurs and hoteliers remained near desperate as mid-May approached.
Competing businesses are now offering seemingly fat bonuses to new employees, bonuses sometimes even advertised on restaurant billboards hanging over the roads. Some restaurants merely have to turn away patrons seeking reservations, but others have to close at certain hours each day or even close a couple days a week because they can’t find workers.
Staffing in restaurants and hotels across Florida remains down roughly 30%, according to the Florida Restaurant & Lodging Association, which cites almost 1.5 million jobs and more than 12% of employment in the Sunshine State as part of the hospitality industry’s muscular contribution to the economy.
There are several reasons for this condition, restaurateurs say — not only the fact that government unemployment pay, an essential aid in recent months, now appears to stand in direct competition with business owners who can’t find workers for jobs in the lower pay grades.
The federal government addition of $300 to Florida’s relatively ungenerous $275, as many view it — a benefit now set to last into the beginning of September — puts unemployed workers at $575 a week (in some states the state benefit is at least $100 higher).
If recipients were working a 40-hour week for that money in Florida, they’d be making about $14.30 per hour, more than many places pay for dishwashers or house cleaners, for example.
“I don’t know what the answer is yet, but I think it’s a three-fold problem,” explains Mark DeAtley, general manager of Scusi Trattoria in Palm Beach Gardens.
“It’s not all about unemployment benefits being so great. I think that’s a viable reason why the workforce is low, but there are a couple of other things. There are no (easy-to-get visas) for foreign workers this year. So all the country clubs and hotels — the country clubs especially — who don’t have to worry about profitability, just their members, they have a lot more spots because no international help is coming in.
“And the fact that we were out of work for so long. It was many months, not just a few months or a few weeks. People found other ways to support themselves. The gig economy had an impact. There were other careers. People found them, or they went back and finished school. The motivated ones may have moved on.”
And some people were and remain cautious about returning to a restaurant environment where only a third of Americans are vaccinated, and the virus that started all this remains a threat, business owners acknowledge.
Reality on the ground
But the effect on their businesses is sometimes enormous.
On Singer Island, Roger Amidon, general manager of Marriott’s Palm Beach Singer Island Beach Resort and Spa, with four restaurants, was operating with 280 employees before the pandemic. Now he has about 140. His plans include persuading county officials to help not only by offering training to those who have never been in the business, but by helping with transportation from the west side of the county — towns like Belle Glade and Pahokee — to Singer Island.
That’s been done successfully before and it could be again, says Michael Corbit, executive director at CareerSource Palm Beach County.
He also confesses inadvertently to adding to the problem for restaurateurs.
“When we were down last year, we tried to rally people into other careers and career paths with some training programs,” he explains.
“Workforce boards have training grants, scholarships and funds. We think it’s a good time in Palm Beach County now, because the hospitality and tourist industry employs about 90,000 people here, and we want people to understand: These are good careers. And people are coming back to work.”
But not quickly enough.
Across the state at the Wyvern Hotel in Punta Gorda, where Matt Nemec manages the hotel’s two restaurants, conditions started out tough, and stayed tough. “We closed the hotel and both restaurants for 45 days when the pandemic began — and it wasn’t just the hotel, it was the 20-plus weddings on the books, the celebrations of life, the birthday parties. It was devastating.”
But they tore everything down, cleaned it, put it back together, and geared up for a very good year — good, that is, but for the problem finding workers. “The hotel runs with close to 200 people with the restaurants, and right now we’re at 85,” he says.
The housekeeping jobs “are a cakewalk for moms — you get out of here before school is over. We need cooks, line cooks, and facilities people — a person does everything, like a utility infielder. So a lot of really nice jobs are available. And we need servers, of course — on our rooftop, our servers make really good money.”
At the brand-spanking-new Luminary Hotel & Co. on the Caloosahatchee River in the Fort Myers downtown historic district, a place where restaurants, shops and the arts are flourishing, things are a little better, perhaps, or even as good as they get right now, says Bob Megazzini, the general manager: “We’re sitting at 210 employees and we could use about 230.”
The Luminary’s biggest of five restaurants with five kitchens, the Oxbow, is doing 500 covers a day, which suggests how willing people are to go out and have a good time. As a result, “our staffing is pretty good in the server positions where the tips are good,” he says. “Where we struggle is with dishwashers, cooks, the entry-level jobs.”
Others, and there are a number of other restaurants on surrounding streets where Thomas Edison and Henry Ford once walked, may have it a little harder.
After an Art Walk festival jammed the downtown streets on a recent Friday evening, one celebrant, Susan Mathews, posted this observation in social media: “We sat down at a pavement table at around 8 p.m. and were told we’d have to wait two hours for service!”
But she wasn’t at The Luminary.
Like others, Mr. Megazzini is creating an environment where jobs can become career starts, not just stopgaps.
“As a corporation we pay benefits — medical, dental, life insurance,” he explains. “An entry-level cook is about $15 an hour, a dishwasher $12 to $13 an hour. Cooks with more experience get more and supervisors get more.”
And in Naples, where Jennifer Castellani began her career two decades ago on the wait staff of one of the five restaurants she now manages for the Culinary Concepts restaurant group, her staffing dilemma has prompted her to engage in a full-court press to bring on employees for all them, she explains.
The Naples restaurants on Fifth Avenue South include Chops City Grill, Pazzo! Cucina Italiana and Yabba Island Grill. Culinary concepts also has Chops City Grill in Bonita Springs and The Saloon in the Coconut Shopping Center in Estero.
“We have major funding going toward recruitment ads, and people may even respond when we invite them to come interview — but getting them to show up is a 50-50 proposition,” Ms. Castellani acknowledges.
“Everyone in the industry is looking for employees.
And it’s starting a competitive war amongst ourselves.
We are increasing hourly wages, trying to keep our people and recruit new ones. We have sign-on bonuses, and we offer employee referral bonuses. So if a current employee brings in an applicant and they get hired, that employee gets a bonus.”
Maybe all that will prove to be enough.
“Everyone is still coming out of the COVID fog, I’d like to call it. Our employment pool is a puddle,” Ms. Castellani says.
Culinary Concepts is hiring for back of the house, front of the house and management positions in all five restaurants, and offering year-round employment to go with the bonuses.
Back at Singer Island Beach Resort and Spa, meanwhile, Mr. Amidon has gone into the business of dispelling myths, too.
“So, who is suffering the most? Mostly our existing employee base,” he insists. “They’re working their butts off, and the managers are also wearing other employee hats. People hired for one job are covering several positions to take care of our guests.”
And another thing. “There’s a misnomer out there that the hotel and restaurant industry is all minimum wage. I do not pay one position minimum wage. But all food and beverage and tipped employees in the state are considered minimum wage workers. A bartender in a good place makes probably $50,000 to $100,000 a year behind the bar, and it can be the same thing with servers or bellmen. They’re all considered minimum wage workers.”
But Mr. Amidon adds a self-reflective caveat for his fellow owners and managers.
“When we think about the housekeeping area or security or other support service departments, we have to think long and hard about how to attract new employees. It’s not only the hourly rate compared to other hotels, but what about the culture? What about the benefits we offer?”
What matters, in other words, may not be just the money.
At The Cooper, where plenty of outdoor seating surrounds its plush indoor spaces, when nobody knew if the restaurant would survive in March of last year Mr. Rosenthal and his management team “took the time to get all the employees gift cards to Publix when we were furloughed. And our GM reached out to vendors who had extraneous food, and got them to donate it to us employees,” Ms. Wallace reports.
“So many of us came back as soon as we could to work here because we have a very great staff, and our owner and general management team are really advocates for all employees.”
What does that mean?
“It means at this restaurant, they want to make sure that everything is fair, and that everybody gets what they need personally, if it’s job-related. That’s true from Rich on down.”
All that matters.
When Florida Atlantic University completed a two-month survey in April of more than 4,000 workers in the industry, 65% said restaurants do not protect workers better than other industries and employers were too quick to furlough or fire workers a year ago. Almost a third said they would seek employment elsewhere outside the industry, reports Dr. Peter Ricci, director of FAU’s hospitality and tourism management program.
Early last year, FAU began to offer an online certificate course training restaurant workers and others in the hospitality industry at no cost to students. Previously, the course had been a $900 value. More than 77,000 workers from the state, the country and overseas have completed it so far.
To Dr. Ricci, who worked in Florida restaurants starting at 14 and ended up leaving hotel management at 40 to become an academic, he says — he’s now 55 — this moment in the hospitality industry is significantly different, requiring a different response from employers than the two biggest historic challenges they’ve faced this century: first, after 9/11 when fear shut down travel and constricted leisure; and second, beginning in about 2008 with the more devastating economic recession.
The current crisis is a big mirror in which owners and managers should see themselves clearly, he proposes.
“I think the only answer is for the hospitality industry to do a soul search of itself and come to terms with the fact people are not going to work for the wages and treatment they used to,” he says.
“They had time to separate themselves from their jobs, to reflect and live with loved ones, and they said, ‘This is not worth it anymore.’
“Biden’s plans to throw money at hotels and restaurants — the whole stimulus thing — is all well and good but it’s only hiding the symptom to get through the next few months.”
Better treatment and living, albeit higher wages across the board in all positions, is the cure, he argues.
“It’s a misperception that people are staying home because they’re lazy.”
Instead, they often don’t feel appreciated or understood by managers, they don’t feel loyalty from managers and they don’t understand the management point of view.
“A CEO at one of the major companies in the lodging industry sent a letter to all furloughed and the on-board associates, and he said, ‘I’m in this with you,’ and he took a million-dollar pay cut to prove it,” Dr. Ricci recounts.
“But that left the individual with a $4 million per year income and a net worth of over $100 million. He was trying to show compassion, but it backfired. They didn’t appreciate it. So there’s a disconnect.”
Dr. Ricci wouldn’t name the company or the man because he likes them, he said.
He offers this as a concluding thought for those critical of the unemployed still not working, instead choosing to receive government benefits.
“If I have three kids and pay daycare and pay to park because your hotel is at the beach, and you’re paying me $13 an hour and I can get unemployment … who is not going to stay home?
“It’s a weird sentiment, to think employees are home eating bonbons or something. That’s not what’s happening.” ¦