Jena Ellenwood, 36, had worked as a bartender in New York City since the early 2000s when the pandemic hit. At that time, she was dividing her time between a bar in Manhattan and two restaurants in Queens and Brooklyn, hoping to earn the $1,000 a week she needed to cover living expenses, student loans and debt. credit card.
“I worked seven days a week,” she says, because “I never felt like I was caught up enough” financially. “You are at the mercy of the customer,” she says. “What if you’re not busy?”
When the pandemic hit and her bar and restaurants closed, Ellenwood had to find a way to pivot. She had given cocktail lessons through one of her employers, Dear Irving, and offered to help them take the lessons online. Requests started coming in for her to teach privately, and she eventually started her own business. While she hoped to make $250 per 6-10 hour shift before the pandemic, today her cocktail classes cost a minimum of $250 an hour.
She still teaches in person a few times a month, but between the various virtual classes she takes and collaborations to design cocktails for a particular brand or company, she has no interest in stepping back behind the bar. “I’m not ready to be at the mercy of a client,” she says. “I’m not ready to be told via their tip what they think of me. I don’t want to work until two or four in the morning.
Ellenwood’s pivot at the start of the pandemic put her at the forefront of a larger trend, which is rocking the restaurant industry.
“This is truly a defining moment for all layers of the restaurant industry”
Ellenwood is among millions of restaurant workers who have left the industry since March 2020, most recently as part of the Great Resignation. In October 2021 alone, 803,000 restaurant workers left their jobs, according to the Bureau of Labor Statistics.
Many cite basic job parameters as the reason for leaving. More than half, 55% of former hospitality workers say they are not interested in returning to the industry due to low pay, and 39% say they will not return due to lack benefits, depending on a Joblist Q3 survey of 1,481 current and former hotel workers. The group was part of a larger survey base of 26,278 job seekers across all fields.
With such a high demand for labor in the industry, major employers have started responding to workers’ demands. In May, McDonald’s announced that workers at company-owned restaurants (which make up 5% of McDonald’s restaurants in the United States) will get an average of 10% wage increases over the next few months. In the same month, Chipotle announced he increased his hourly rates for entry-level crew members between $11 and $18 per hour. In October, Starbucks announced that it would increase its base salary for U.S. baristas to $15 an hour by summer 2022.
“This is truly a defining moment for all strata of the restaurant industry,” says Caroline Richmond, a lawyer who has long represented restaurants. But she and other experts say restaurant jobs are still far from offering sustainable pay and benefits as an industry.
Here’s why it’s still unclear whether restaurant jobs are likely to become “good” jobs anytime soon.
Burger King CEO earns $46,000 a year in Chicago
The foodservice industry is multifaceted, made up of tens of thousands of small family restaurants, national food chains, fine dining restaurants, and more. What workers earn and what benefits they receive depend on a variety of factors.
Each institution has its own available resources and its own remuneration structure, for example. The packages also depend on the role a worker plays in the business. Dishwashers and cooks can earn minimum wage with no benefits, for example, while chefs can earn well above minimum wage with benefits like health insurance, pension plans, and taking strength. The salary of the bartender and servers may depend on tips.
Finally, location plays an important role in the type of compensation and benefits offered by restaurant jobs. Sixteen states and the District of Columbia have sick leave mandates for employers, according to the Society for Human Resource Management. Nine states and the District of Columbia also have their own paid leave policies, including parental leave. Workers in these states would have access to these benefits regardless of their position.
A general manager of Burger King in Chicago, for example, earns about $46,000 a year, According to Indeedwith “career development” the only advantage indicated. A general manager of the Haitian/Pacific Northwest restaurant Kann in the same city earns $85,000 with health insurance, according to a list on the Poché site.
“There is only the amount you will pay for a hamburger”
Although changes have been made in the larger chains that have the resources, at this point it is unlikely that all food service workers will have access to a sustainable hourly wage and benefits such as health insurance and a PTO in the near future. “Profit margins are so tight” in this industry, says Richmond. You “have a lot of small family businesses and single operators who may want to offer better wages,” she says, “but may have to provide the bare minimum” because that’s all they can afford.
If many small restaurants or bars wanted to raise hourly rates for their low-wage workers, for example, or start paying for health insurance, the cost would have to be passed on to the customer in the form of more expensive meals. “And we all know there’s a limit to what you’ll pay for a burger,” she says.
For dramatic change to occur industry-wide, legislation would likely have to move the needle forward. The Build Back Better Bill, for example, currently under deliberation in the Senate, includes a one-month paid leave provision covering caregiving, parental leave and long-term illness. The government would cover the cost of these weeks for employers, making it easier for small businesses to grant this time off to workers.
“I think we’ll probably see more clarity around those kinds of benefits over the next 6 to 12 months,” Richmond says, adding that with the federal mandates, “it’s going to be a little bit easier to implement those plans for the future.”
Difficult working conditions: it was not uncommon “to be there for 12 hours”
In the end, the practicalities of working in food service are only part of the problem and the reason for the exodus of workers. Harsh working conditions also play a role.
After 11 years as a pastry chef in some of the most renowned companies in the restaurant world, Tracy Wilk, 33, left the industry in June. She now works at technology company BentoBox.
Wilk had worked his way up, from $10 an hour as an intern to $70,000 a year with benefits as an executive pastry chef in New York. Even with the PTO, however, she rarely felt like she could get away. She recalls a busy restaurant week when “extreme tooth pain” sent her to the dentist. She ended up having a tooth pulled, but “I worked that night and helped speed up the dinner service because someone had to,” she says.
Tracy Wilk. Courtesy of Tracy Wilk
“It wasn’t uncommon for one of us to be there for 12 hours,” she says, adding that it was “a job that wasn’t going to get any easier.” So she left.
Along with the grueling hours, frontline workers like servers, hostesses and bartenders have to deal with unwanted attention from the public. An overwhelming majority of female restaurant workers, 90%, say they have experienced sexual harassment at work, according to the Restaurant Opportunities Center.
And with the pandemic, daily contact with dozens of customers puts these workers at even greater risk. A 2021 University of California, San Francisco, a study found that line cooks had the highest mortality risk early in the pandemic. The study looked at excess mortality among Californians aged 18 to 65 from March to October 2020.
Researchers estimated that during this period, line cooks had a 60% increase in pandemic-associated mortality, compared to a 34% increase for licensed practical and vocational nurses, and a 22% increase for all Californians of working age.
“Flexibility is really important”
At the moment, if you work in the restaurant industry or want to, you can make requests that employers might be more open or able to accommodate.
Especially in the wake of the pandemic, “flexibility is really important,” says Rachael Nemeth, CEO and co-founder of Opus, which offers mobile-focused training to the officeless workforce, including customers in the restaurant industry. A flexible schedule is “definitely less expensive than being able to provide health benefits to your team,” she says.
“The commuter benefits are significant,” Nemeth says. Transportation is getting expensive and these are “really tangible benefits” for employers who might say, “we’re going to give you a break on your MetroCard,” she says.
At least for now, if workers’ demands aren’t met, “that’s a time when they’re slightly less vulnerable because they’re in high demand,” says Ileen De Vault, professor of labor history at Cornell and director of the university’s Labor Institute. “So they can vote with their feet.”
Investing involves risk, including possible loss of principal. This content is for informational purposes only and is not intended to be used as investment advice. The strategies and investments discussed may not be suitable for all investors. Consider your financial situation carefully, including investment objective, time horizon, risk tolerance and fees before making any investment decisions.
This content is provided for informational purposes only and is not intended to provide, and should not be relied upon for, accounting, legal or tax advice. Consult your accountant, tax specialist or legal advisor about this.
No amount of diversification or asset allocation can assure profits or guarantee against losses.