A New Reality For The Restaurant Industry

Restaurants are in dire need of workers. What’s the solution?

• Jamie Mah @grahammah

Last Sunday I went out for dinner with my family. There were four of us. We went to a quaint and lovely restaurant called Pepino’s. It’s a cozy American/Italian inspired gem, the kind of spot you’d expect Tony Soprano to frequent. The room is intimate. Charming. Dimly lit with carpeting found throughout. Our meal was splendid. Delicious and extremely satisfying. We dined on classic staples spaghetti meatballs and lasagna. Dessert of cheesecake and tiramisu wrapped up things nicely. Overall we were satiated and extremely happy. The experience lived up to all our expectations. We will definitely return. 

From Eater:

Since the pandemic, the demands of restaurant and food service workers have basically come down to one key thing: the need for higher wages. Grueling, “essential” service work was deadly for many, remains dangerous, and has been done for too long on subminimum wage, or a minimum wage that isn’t actually a livable one.

Restaurants aim to provide a respite from our daily lives. They invite us to indulge and experience. We flock to them because we are social creatures who crave connection. If the pandemic has taught us anything it’s how important the hospitality sector is to our way of life. 

However, in spite of this realization, the industry finds itself at a crossroads. Statistics Canada puts the issue centred around one number: 130,000. This is the deficit number of employees currently needed to fill and staff the sector properly. This number is nearly double where it stood pre pandemic. Operators are being forced to adjust with offering higher wages, signing bonuses and benefits. 

From CBC:

Many restaurants are offering signing bonuses for chefs, according to Ernie Tsu, president of the Alberta Hospitality Association. At his own Calgary restaurant, Trolley 5, he’s paying out quarterly retention bonuses of $300 to $600 to kitchen staff who stay on, as well as referral bonuses for staffers who recommend a friend who is hired.

This is great to see, but where’s the rub here? 

In a normal world, the overall restaurant sector in Canada was failing. Most restaurateurs were barely hanging on. The pandemic has exacerbated one of its most glaring issues — a lack of workers — and has thus caused a shift in views and compensation by employers. 

But will it be enough? 

Will workers return? 

Should they?

From The Conversation:

Through our research on restaurant work, and via conversations with many restaurant employees across the country, we’ve learned that many are fleeing the industry because the work is a grind. What’s more, they don’t see any future in a job that will continue to hinder their well-being.

The pandemic allowed workers time to find jobs in other industries that provide more stability and feature regular work schedules, vacation time, higher pay and benefits.

These workers often felt neglected, and that their employers did not believe they were worth investing in.

While there are certainly good restaurant employers, the industry as a whole has failed to improve working conditions because historically, there were always new people to fill roles.

There’s a few things to unpack from this excerpt. The first paragraph highlights an issue I’ve long since written about: Is there a future to be had in this field? For some, there absolutely is. I’m one of them. My job at the Hotel is a perfect example of this. I receive a great wage, full benefits, hotel perks, free food, yearly pay increases, great tips and a positive working environment. I’m lucky. But for the vast majority, none of these advantages exist. 

To give a bit of context in regards to the realities most face while in this industry, a few years back I wrote a piece on chefs and why the restaurant industry was failing them. Below is an excerpt from that column. 

Here’s a depiction of the sad fate many chefs face today.

Let’s say you’re 22, and you decide that you want to cook for a living. You enter a culinary school for 8 months, learn basic techniques. Then you go work at Earls for 2 years where you get some real on the job training doing prep, making dishes in real time while also learning a bit of how to run a line and so forth. All-in-all you’re making $18 per hour plus a bit of tip out. You’re not broke, but you’re definitely just barely getting by. But you’re young, you love working with your friends, and hey, you go out for beers every night, which is nice.

But now you’re 25 and you’ve decided that you’d like to go somewhere where you can learn something more. So you get on at Savio Volpe, a kitchen putting out delicious awesome food. You’re stoked but the hours are long (12hr shifts/5 days a week) and the pay isn’t great ($130 per day — I’m guessing by the way, I have no idea what Savio Volpe pays their employees), but you’re learning and that’s what counts.

You do this for 2 years wherein by the end you’ve risen up the ranks to Sous Chef — but now you’re 27. You’re still broke and your girlfriend wants you to get serious with your life. So you take the head chef job up at Cin Cin. It pays decent (50k per year), and now you’re running your own crew, but you’re not really learning anything new and you’re definitely not saving a lot either.

“Damn, Vancouver is expensive!”, you find yourself lamenting over and over.

You do this for a few years, but now you’re 31. You’re not so young anymore, and you’re finding yourself wondering: What’s next?

Do you either find some investors to open up your own place, which is really hard and very expensive and a total risk that you might not be up to doing, or do you stay at Cin Cin? Not totally sure what you should do, you begin to wonder: Was this why I became a cook? To put out pasta?

The sad fate for many Chefs, is that it’s a tough go and often very unrewarding.

In the end, a simple question must be asked: If you go to medical school for years and become a doctor, you KNOW that one day you’ll be making a lot of money. It’s a fact. But if you slave away for 12hrs in a kitchen at Annalena, what are you guaranteed? Nothing!

If the pandemic has done anything for those restaurant employees who were in this type of situation, it was that it gave them time and clarity. Life has a way of carrying on while most of us make grand plans for it. I know of so many individuals who have left this sector over the past 18 months specifically because the pandemic finally forced them to reckon with their own unhappiness. 

When rent and bills are high and your hours just as long, finding the time and energy needed to make change can be daunting and scary, even if it is what you crave and desire to do. If you go on Craigslist today, all you’ll see is listing after listing for cook positions. It is a dire state of affairs to say the least. Numerous restaurants all over Vancouver have been forced to close an extra day or two a week because they cannot find workers, specifically kitchen staff. The last two paragraphs from that Conversation excerpt says everything in regards to this problem. 

These workers often felt neglected, and that their employers did not believe they were worth investing in.

While there are certainly good restaurant employers, the industry as a whole has failed to improve working conditions because historically, there were always new people to fill roles.

A lot of this shouldn’t be dumped solely on restaurateurs and I’m not advocating for that either. Consumers are to blame for a large percentage of this issue as well. We’re a fickle lot and we have anchoring issues which need reckoning with. 

A conversation I have had with so many general managers and owners in the past has been their reluctance to raise prices when faced with rising costs. The “fear” of backlash from consumers haunts their every move. 

When forced with the belief that you must race to the bottom with the lowest price compared to your competitors to maintain competitiveness, ultimately, everyone loses. 

The general answer is that pricing is incredibly hard. We think of consumers as having a demand function, but in fact, if you think about it for five minutes, you’ll realize how difficult it is. For example, think about something as simple as a cup of coffee or a Popsicle, and then I ask you how much this is worth to you in terms of money. This is an incredibly difficult judgment to make. Imagine, right now, here’s a cup of coffee. How much pleasure is it giving you in terms of money? This is very, very difficult. So what do people do instead? They resort to responses that they can more easily compute. We look at how much it cost us last week or last month.

Behavioural Economist Dan Ariely speaking about his book: Predictably Irrational: The Hidden Forces That Shape Our Decisions

What’s flipping with this concept from behavioural economist Dan Ariely is how operators are now being coerced to view their employees in a different light due to limited options versus solely looking at how they can attract more business. This reality is a new phenomenon, one that has only come to fruition over the past ten years or so, with the pandemic making it even worse. There’s a reason for this. Making a living in this industry has become more difficult with each passing year. The cost of living in most major cities has gone up quicker than what the average hospitality person makes in a year. 

If you want to start a family and buy a home one day, you cannot do that as a chef when your pay is $19 per hour and you receive $400 a week in tip out. 

As I wrote at the top, if this industry is as vital to our economy and way of life as we’ve come to believe, then those who toil in it must be rewarded for their continued efforts. 

In thinking this way, I have a few ideas on how things can be fixed.

• The wage subsidy has to stay in some format long term. I can’t tell you how many times I’ve discussed with restaurateurs how vital this has been during this period. It’s helped keep so many operators alive. Taking it away would be a bad idea. This investment has the potential to have a slew of positive long term rewards for so many small businesses. It should also be expanded for those wannabe restaurateurs who could use some aid in getting things off the ground. Restaurants are expensive to build. With either subsidies or favourable government loans — ones which aren’t a true pain to access, more job opportunities will flourish. The government already subsidizes numerous other sectors, maintaining the one they currently offer for restaurants is a smart investment in a sector that desperately needs it.

Below is an excerpt from a column I wrote back in 2018: Why The Restaurant Industry Needs To Be Subsidized.

The whole of my argument here is the need for the restaurant sector to band together so as to fight for better rights, subsidy or not. Complaining about how things currently are gets us nowhere. The Fets raid caused a stir amongst many restaurant owners here in Vancouver, and that event forced them into action as many have started to band together to form proposals for change to BC’s provincial liquor laws. Hearing this, I believe we’re on the right tract. But more needs to be done. As associations such as the Canadian Association of Professional Bartenders and the Canadian Association of Professional Sommeliers find more prominence within our communities, their reach has the potential to invigorate real debate and change for a massive amount of workers.

Again we’re talking about 1.2 million people, many of whom are young and dying to be apart of this industry for life, yet, the drawbacks of low income and viability hamper plenty, thus as we’ve seen for decades the mass exodus’ for many into more stable and profitable careers. This isn’t good. The restaurant sector shouldn’t be a stepping stone industry for those looking for something better — like becoming a plumber it should be seen as a practical lifelong career choice. Currently for a good deal of restaurant workers, it isn’t. If you don’t believe me, just ask a chef.

As I’ve argued for many of the challenges of the restaurant industry before, here, here and here, my main goal has always been for this simple phrase: it shouldn’t be this hard. Opening and running a business that serves food and drink shouldn’t be this painful or expensive. The rewards are meager and the stress is constant. It shouldn’t be this hard, yet, it is. We need help.

Our governments bailed out our Auto Sector because someone made them believe that it was in the country’s best interest to save thousands of jobs of great working Canadians. I’m glad they did. It may not have been the best choice ultimately, but at least they made one for a good reason. The restaurant Industry has plenty of good reasons that can be shared with our governments. We have 1.2 million people who depend on this industry for survival. I believe that’s a strong enough reason for a little subsidy.

• Minimum wage needs to rise in step with inflation until it reaches a livable wage. Here in British Columbia, that’s around $21 per hour. Currently minimum wage sits at $15.20. That’s almost $6 short of a livable wage. This is unacceptable. The BC government brought the minimum wage up slowly over a three year period. They should not stop. It should continue to rise with inflation and not stay at this level for years as it has in the past. For the vast majority of front of house workers in hospitality, minimum wage is what they receive. Fixing this issue will make the industry stronger and more viable long term. It will give workers more money in their pockets and greater stability financially.

The average hospitality salary in Canada is $41,664 per year or $21.37 per hour. Entry-level positions start at $31,200 per year, while most experienced workers make up to $70,074 per year.

A highter minimum wage will also aid in the perception hospitality workers struggle with regarding their place in this economy. 

“To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease of the pleasure, which interests us. But vanity is always founded upon the belief of our being the object of attention and approbation.

The rich man glories in his riches, because he feels that they naturally draw upon him the attention of the world, and that mankind are dispose to go along with him in all the agreeable emotions with which the advantages of his situation so readily inspire him…The poor man, on the contrary, is ashamed of his poverty. He feels that it either places him out of sight of mankind, or, that if they take any notice of him, they have, however, scarce any-fellow-feeling with the misery and distress which he suffers.” — Adam Smith, The Theory of Moral Sentiments

Believe me or not, perception is a big reason why the hospitality industry suffers from a workers shortage. My older sister still thinks I need to get a real job because she sees what I do for a living as third class. Regardless if her views have legitimacy or not, getting young adults to commit to this sector long term will have to at some point start with this problem. Pay is a big arbiter of this issue, but respect is not far behind. If someone is afraid to tell another person they work as a line cook or bartender, you have a problem with your field. 

The following paragraph is from a column I wrote back in 2019: Will Hospitality Employees Ever Escape Their Third Class Stigma?

The life of someone in hospitality is never easy. We work late and we’re always expected to be “on.” Breaks never happen and we live and die by our patrons generosity. You’re on your feet for hours and when shit hits the fan, and you get rocked with four tables or six bills at once, you’re expected to remain calm even when you clearly are not. This line of work isn’t for everyone. Some love it. Some hate it. Others tolerate it. Wherever you land on this spectrum, one thing is for certain, this is a job and it’s just as important to our economy as every other profession we deem significant.

And finally…every industry has its positives and negatives. Crying spilled milk because the restaurant industry has taken a beating these last 18 months won’t solve anything. Most Canadians don’t care how bad it’s been. They hardly give a damn if you are making ends meet or if you can pay your staff appropriately. If you close or have to let someone go, that’s business. Another will come in and take your place. I’ve seen it a thousand times. Restaurants come and go, as do their workers and their customers. Those that survive long enough to see their ten year anniversary are fortunate enough to have been built upon smart business acumen while delivering an excellent product consumers want. Few are so lucky. 

But ultimately, however you want to square it, washing dishes is washing dishes. Someone needs to do it and it will never pay that well. Expecting a worker to commit to a full time position at $16 per hour with some tip out to wash dishes long term is nonsense. Turnover will happen on the regular. Same goes for line cooks. These jobs are not rewarding. The pandemic gave those on the fringes of this sector who no longer wanted to be in it as well as those who could no longer afford to a chance to break free. We may never recover. There are too many restaurants. Not enough good jobs and too much instability. New ideas have to emerge. Offering part time or— stint— work at higher wages might be the key. Lessons from the gig economy should be looked at. A lot of young workers want flexibility and freedom. They may not want to commit to a full time job while in school. But they could be coerced into a few hours here and there. Uber and Doordash make their bones on this concept. I’m not a huge fan of their platforms overall but they do attract workers, many of whom want that flexibility, and unless drastic changes are on the horizon for the hospitality sector, many of those I’ve mentioned above, going this route might be the only option to solving the worker shortage. 

In the UK and US, startups are emerging and finding success. 

From Eater:

In brief, Stint works like an Uber for hospitality labour. All of its workers are students: The idea is that students have plenty of “downtime,” but that they prefer short, one-off shifts over regular work because of their ever-changing schedules. Some of Stint’s micro-gigs are in small local businesses, such as Chelsea Creperie on the Fulham Road, or Zebrano, a bar on Soho’s Greek Street. Others are in well-known chains, such as Chipotle, the Mexican fast-casual corporation, or Busaba, the London-based Thai restaurant group. In September 2021, a spokesperson for the company told Eater that more than 1,000 businesses have used Stint, and more than 75,000 students have signed up to the app.

While temp workers typically measure jobs in days, weeks, or in some cases months, the students that make up Stint’s labour force take on micro-gigs, known as Stints. Some of these last as little as 90 minutes, with no ongoing commitments. Just as an Uber customer cannot hire the same driver again and again, Stint workers cannot guarantee turning one “stint” into repeat shifts at a particular business without entering into an employment relationship external to the app.

My dinner at Pepino’s on Sunday was fantastic. I’m looking forward to my next great meal here in Vancouver. I love participating in and dining in the hospitality sector. It’s been a tough go of late for sure, but I’m optimistic bright minds behind every excellent restaurant or bar will soon find a way and flourish. They always do.