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Restaurants face unprecented dearth of workers

Chip Solt was recently dining out at a restaurant in a neighboring county when he overheard the owner make an intriguing proposition to another customer.

“The owner told him, ‘If you can find me three cooks, I’ll give you free soup for life,’?” Solt recalled.

Solt found the offer entertaining. What the owner didn’t know is that Solt is also a restaurateur in the same position - facing a shortage of applicants for open positions at his business, Joey B’s in Palmerton.

Many in the hospitality industry say they are dealing with a labor shortage like they haven’t seen before. What used to be a steady stream of applicants has completely dried up.

“There isn’t a company in Pennsylvania that isn’t hiring right now,” Solt said.

Many of them are pointing to additional unemployment compensation as a factor in the labor shortage.

Federal Pandemic Unemployment Compensation provides $300 per week on top of regular unemployment benefits. Anyone qualifying for regular benefits receives the compensation.

While the $300 alone isn’t enough to replace a job, restaurant owners say it’s enough to allow workers to stay home rather than take a job for comparable money.

Solt and Leiby’s Ice Cream House owner Daniel Leiby say they’ve heard it firsthand from workers.

“I’ve had people literally tell me, they’re paying me enough to stay at home,” Leiby said.

Some workers have reportedly asked to work limited hours so they could keep collecting. Others turned down such a proposition.

The small pool of applicants has created more competition among workers. Turnover is common in the restaurant industry, but there is usually a steady flow of applications to fill open positions.

As a result of the shortage of workers, restaurants are competing for a limited pool of applicants. They are competing against warehouses and other industrial jobs which are also unable to fill all available positions, despite offering over $20 per hour in some cases. The labor shortage in warehouses and trucking jobs also causes supply chain issues for restaurants.

Some restaurants have tried raising wages, but owners say the only way to pay for that is to pass along the cost to customers. That inflationary effect neutralizes the effect of increased wages, according to Kathy Henderson of the Carbon Chamber and Economic Development Corporation.

“You’re trying to raise the minimum wage to benefit people, so they can afford things, but companies have to raise their prices so ultimately it’s not going to help people afford those items,” she said.

The additional unemployment compensation is set to run through August. Solt said Pennsylvania’s elected leaders need to end the program sooner. Twenty-five states, which all have Republican governors, have already made that decision.

“If somebody doesn’t take the reins, by the end of summer, businesses around here will be in a hurt locker,” he said.

Henderson said based on what she’s heard from businesses, the state should look at ending the unemployment compensation early. But not everyone collecting it is using it as an excuse not to work.

Many parents of children had to stay home this year as their children studied online, or due to day cares that were closed or aren’t accepting new children.

“Withdrawing all the help may not be the fix,” she said.

In the meantime, restaurants are having to adjust to having fewer workers on the payroll.

Solt recently posted a message asking customers to be patient with his employees, who are managing extra responsibilities.

Leiby’s went a step further, reducing the number of days the business is open from six to five. Daniel Leiby said the shortage was one of several factors. His remaining employees also need a break from working extra hours. Leiby said the business will get some respite over the summer from teenagers working summer jobs.

Teenage workers don’t necessarily fit the qualifications for a line cook job, however. Solt said the few responses he received for his recent job posting looking for line cooks were from parents looking for summer jobs for their kids.

He said that the restaurant owner he overheard offering free soup in exchange for employee referrals was likely making a safe bet, because the customer would face a hard time finding applicants.

“Every restaurant, every golf course is looking for cooks. It’s hard enough to find one, let alone three,” he said.

Leiby's in South Tamaqua has cut days of operation because of the worker shortage. CHRIS REBER/TIMES NEWS