Commerce Secretary Gina Raimondo on Thursday brushed off concern among restaurant owners of a worker shortage and, instead, described the situation as a ‘skills gap.’
At a town hall in Cincinnati on Wednesday night, President Joe Biden was asked by restaurant owner John Lanni what his administration was going to do to end the worker shortages. He replied by telling Lanni that he should increase wages and that the reason restaurants were struggling to hire people was that workers were considering ‘different opportunities’.
Raimondo argued there was no shortage.
‘I don’t know if I would call it a shortage per se. I would say there’s a skills gap,’ she told reporters at the White House press briefing.
‘What I hear all the time, is from companies, we’re ready to hire,’ she noted. ‘But people need to have the skills.’
She said, in particular, cyber skills were needed in the American work force.
There are still more than 12 million people in America claiming some kind of unemployment (5.9 percent) and first-time claims rose to 419,000 last week, the highest in nearly two months. At the end of 2019, the number of unemployed was 5.8million (3.5 percent).
Restaurant owners and other bosses are struggling to hire.
White House press secretary Jen Psaki on Thursday argued the American Rescue Plan provided funds for restaurant owners, saying it ‘helped many, many hundreds of restaurants across the country stay open and reopen.’
More than 280,000 restaurants applied to the fund for a total sum of $72billion. Congress only allotted $28billion to the program and dished it out between 100,000 applicants.
Commerce Secretary Gina Raimondo brushed off concern among restaurant owners of a worker shortage and described the situation as a ‘skills gap’
At a townhall Wednesday night, President Joe Biden suggested restaurant owners raise wages in order to end worker shortages
Psaki said what Biden meant in his townhall remarks was that it’s a ‘workers market, and in some places, it may be that you have to pay more wages in order to attract workers.’
Biden, in his response to Lanni at the townhall, said: ‘If you notice, we kept you open.
‘We spent billions of dollars to make sure restaurants could stay open and a lot of people who now work as waiters, waitresses decided that they don’t want to do that anymore because there was other opportunities at higher wages because there was a lot of openings now in jobs and people are beginning to move.
‘There’s some evidence that maintaining the ability to continue to not have your – have to pay your rent so you don’t get thrown out and being able to provide for unemployment insurance – has kept people from going back to work. There’s not much distinction between not going back to work in a restaurant and not going back to work at a factory.
‘So people are looking to change opportunities, change what they’re doing.’
‘All kidding aside, I think it really is a matter of people deciding now that they have opportunities to do other things and there’s a shortage of employees, people are looking to make more money and to bargain.
‘So I think your business and the tourist business is really going to be in a bind for a little while. We’re ending all of those things keeping people from going back to work, et cetera. It will be interesting to see what happens, but my gut tells me, my gut tells me that part of it relates to, you know, you can make a good salary as a waiter or waitress.
‘But there’s a lot of people who are looking to change their occupation. I could be wrong.’
Pressed on what he could do to help Lanni, the president said that the government had implemented programs to keep businesses running.
‘John, first of all, the thing we did to help John and the Johns out is provide billions of dollars to make sure they could stay open, number one,’ Biden said.
‘So you all contributed to making sure John could stay in business. And we should. We should have done that, as we did for other industries. But secondly, John, my guess is that people being seven, $8 an hour plus tips, that’s – I think, John, you’re going to be finding 15 bucks an hour or more now.
‘But you may pay that already. You may pay that already.’
John Lanni, the co-owner of a restaurant group that has 39 venues across the country, on Wednesday night asked Joe Biden what the president could do to try and help him find more staff for his restaurants. Biden replied that wages needed to go up
These numbers show the weekly number of people claiming unemployment for the first time. It skyrocketed in March 2020 when the world came to a standstill and has decreased gradually since then but for the week ending July 17, it jumped to 419,000 – the highest in two months
Lanni and another Cincinnati restaurant owner, Jean-Francois Flechet, later told The Cincinnati Enquirer that they already pay staff more than $15-an-hour and that Biden doesn’t understand the issue.
‘We are in a labor crisis and we need to find a way to incentivize people to get back to work. I just heard restaurants are going to have a hard road going forward and that we need to pay our workers more. That’s happening and it’s still not enough,’ he told The Cincinnati Enquirer.
But restaurant owners in New York City, where the minimum wage is already $15, say the President – who has never run a business – is detached from reality. They say that they already run on razor-thin margins and are in the red after 18 months of punitive lockdowns in varying forms.
They say the only way to bring restaurant staff back is to get rid of the high unemployment payments keeping them at home. If they are forced to increase wages to attract staff, they say they have no choice but to increase the prices on their menus too. It’ll put customers off and eventually, put them out of business.
Republican lawmakers slammed Biden’s remarks as ‘patronizing’ and ‘out of touch’ on Thursday and said he created the shortages by paying people too much to stay at home.
John Stratidis, the manager of The Famous Cozy Soup ‘n’ Burger in Manhattan’s Greenwich Village, told DailyMail.com on Thursday that raising wages would punish consumers and eventually put people off dining out.
John Stratidis, the manager of The Famous Cozy Soup ‘n’ Burger diner in Manhattan’s Greenwich Village, told DailyMail.com on Thursday that raising wages would punish consumers and eventually put people off dining out. ‘You’re going to be walking in somewhere to eat something and paying$40 or $50 for a hamburger,’ he said
Stratidis hasn’t been able to hire back most of the staff he let go in COVID. On Thursday it was just him, one other server and three chefs in the diner which has dozens of covers
‘When minimum wage goes up, who do you think is going to pay for that? The customer. Everything is going to go up just to be able to stay in business. When we give more money, the prices go up and when the prices go up who’s going to pay for that?
‘They’re going to be crying about it, and saying “it’s too expensive”. That’s inflation. You’re going to be walking in somewhere to eat something and paying $40 or $50 for a hamburger.’
‘We need to get back to reality. A lot of people are in this bubble… the longer we stay closed, the bigger this becomes. We’re already in trouble.
‘When minimum wage goes up, who do you think is going to pay for that? The customer…You’re going to be walking in somewhere to eat something and paying $40 or $50 for a hamburger.’
John Stratidis, the manager of the Cozy Soup N Burger diner in Manhattan’s Greenwich Village
‘If we don’t get back to work and get the ball running, we’re going to be in trouble.’
When COVID started, Stratidis said he had to let go of all of his staff. On Thursday, there were five workers there – three chefs, one other front-of-house server and him.
He says he still can’t afford to bring any more staff back, and that competing with generous unemployment makes it even harder. The only solution he sees is to cut the unemployment benefits that are keeping people at home.
‘Everyone is chilling right now, collecting $1,200 in unemployment benefits. What happens when those stop in September? When unemployment stops, poverty starts. If there are no restaurants, where are you going to work?’
Robert Mahon, owner of Broadstone, Toro Loco and Amor Loco, in New York City, said Biden must also replenish the Restaurant Revitalization Fund.
More than 280,000 restaurants applied to the fund for a total sum of $72billion. Congress only allotted $28billion to the program and dished it out between 100,000 applicants.
Republican lawmakers are pushing for an additional $60billion to be added to it. ‘If Joe wants to help out the restaurant industry he must replenish the Restaurant Revitalization Fund and cut unemployment benefits now.
‘The quicker this is done the industry will have path to normal capacity. Right now there is no clear path and the future remains uncertain from an operational stand point.
‘Inflation caused by supply chain issues – not stimulus programs – is having inflation spiked on goods and services. In addition, restaurants have to deal with wage inflation which could be put under control today if the unemployment is cut.
‘Restaurants have endured enough especially in Democratic states since March 2020. No wonder the the mass exodus of residents continues to Republican states.’
The National Restaurant Association pointed out that unlike other businesses, restaurants run on smaller margins.
‘Last night, Mr. Lanni expressed the same fear and frustration being felt by operators across the country. Restaurants aren’t like other small businesses; they run on very tight margins, so any change in operating costs jeopardizes their stability.
‘In most communities the demand for workers is pushing wages significantly higher, and restaurant operators are doing their best to offer competitive wages in this new environment, but they’re also balancing skyrocketing food costs and debt from operating in the red for the last year.
‘Higher wages alone won’t solve the problem when there aren’t enough people in the labor pool to fill the millions of open jobs,’ Sean Kennedy, Executive Vice President of Public Affairs, National Restaurant Association said.