Article: Econ professor weighs in on regional restaurant struggles

Nov 15, 2021 | Business, Engagement

Note: This article originally appeared in the Monroe News Star and Yahoo News on Nov. 6, 2021. 
Written by Sabrina LeBoeuf

Restaurants across the Twin Cities, the state and the country are in need of new employees, but the candidate search has proven anything but simple.

Employee hiring and retention has become the largest obstacle for 75% of restaurants, according to the National Restaurant Association’s State of the Industry Mid-Year Update. While many are quick to blame unemployment benefits, which ended a month early in Louisiana, Patrick Scott, Louisiana Tech University assistant professor of economics and director for the Center for Economic Research, said there is no way to see if the ending of unemployment benefits directly affected the unemployment rate in the state. This is because the ending of benefits was not an isolated incident thanks to compounding factors, such as the effects of Hurricane Ida.

“First off, that industry is hurting right now because of uncertainty with regard to pandemic and safety of eating out, but then at the same time, that thread also runs backwards,” Scott said. “So you’ve got workers that are basically saying, ‘Is this safe to work this job?'”

Restaurant owners in New Orleans part of the Independent Restaurant Coalition of Louisiana said they’ve heard similar sentiments from the workers they were able to keep following mandated temporary closures at the start of the pandemic and subsequent furloughs and layoffs.

“We’re lucky enough that we’ve been able to rehire some some employees, but there’s some employee members that were really valuable to us but they never came back,” said Neal Bodenheimer, owner of New Orleans restaurants Cure, VALS, Dauphine’s and Cane & Table.

Additionally, John Stubbs, partner of Jewel in the South in New Orleans, said he felt there was not enough lead time to get employees back, especially since much money was spent on struggling to pay rent and making COVID-19-related investments.

When it came to bringing employees back to the restaurant, Bodenheimer said they had to find people willing to risk their safety. Restaurant owners also had to compete for employees with unemployment benefits as well as better job offers from other restaurants who were able to offer better pay and benefits.

The Texas Roadhouse in West Monroe hosted an event on Oct. 25, National Hiring Day, to try to bring in prospective employees. Additionally, the restaurant chain announced they would begin offering tuition reimbursements for employees who worked 30 or more hours each week.

Some employees didn’t have a choice to return to work and consider their own health safety. For roughly 20 months, restaurant workers who needed to return to work had to both serve customers and enforce ever-changing COVID-safety guidelines. On top of dealing with work-related stress and feelings of burnout, the financial uncertainty of the pandemic and its impact on the restaurant industry has contributed to further anxiety. Hurricane Ida only added to financial pressures.

Robért LeBlanc, founder of LeBlanc + Smith in New Orleans, said this financial worry has caused employees to quit the industry.

“It’s too much financial worries, specifically, and it’s breaking people understandably so,” LeBlanc said. “Frankly, it’s broken me emotionally a few times, and I’ve had to sort of muster the courage to keep going.”

Restaurant owners said the hiring and employee retention issue can be deduced to a resource problem. With less funding, owners are forced to keep less staff. Then, they can only afford to pay their employees so much in order to keep their businesses open and not rack up more debt.

The Restaurant Revitalization Fund, a federal aid program that has since ended, helped 1,396 restaurants in Louisiana with additional funding when the pandemic began to take its financial toll. However, 2,978 restaurants were not included in the first round of funding, and they can only receive program aid if Congress decides to allocate more dollars to the RRF. In the entire state, there are 9,553 restaurants, and these establishments provide more than 238,000 jobs.

“More resources would help,” Stubbs said. “It would help us provide better pay, better health care services for the employees, better protection for the employees in the building. These are all things that we, as a part of the survival through the pandemic, have had to invest more in at a time when there’s less revenue.”