Across Santa Monica, restaurants and bars are bursting back to life and flooding with customers, but there is just one thing missing — the staff.
Labor shortages are plaguing industries across the nation and in Santa Monica this pain is acutely felt by restaurateurs who are eager to expand business, but lack enough employees to meet the booming demand.
Several forces are constraining the supply of restaurant workers, which threatens the economic recovery of businesses in the short-term and could lead to a restructuring of the industry in the long-term.
The most visible and politically charged factor is the ongoing $300 boost to unemployment.
“Multiple workers in both front and back of house have told us they are happy with unemployment and stimulus checks and, after being cooped up for a year, are looking forward to taking the summer off,” said Jeffrey Merrihue, Owner of Heroic Italian restaurant, adding that even with the promise of higher wages, he’s struggling to lure employees back.
Several other local restaurant owners echoed Merrihue’s comments, saying they expect the shortage to last until these benefits expire.
“Unemployment was good enough to be able to go camping a few times,” said Chef Chris Phelps, who is experiencing staffing difficulties at his popular brunch spot Salt’s Cure. “But once everything gets going, I think it would be incredibly boring to not work. You can only go camping so many times.”
Restaurant and hospitality expert Hunter Hall, says that boosted benefits are a red herring when it comes to understanding the labor shortage and warns that there are other contributing factors lurking beneath the surface.
“For somebody to say the only reason that we don’t have workers is because of that darn pesky unemployment is lazy intellectually and also disingenuous from a societal perspective,” said Hall.
Hall points to restaurants’ high stress work environment, the opportunity the pandemic has given workers to pursue other passions, and restaurant-adjacent fields poaching employees with better working conditions as additional contributors to staffing woes.
Unlike unemployment boosts, none of these factors have an expiration date, rendering the timeline of the ongoing labor shortage much murkier.
Joel Dixon, President of the Rustic Canyon Family, is trying to fill around 40 positions across the groups’ nine local restaurants. He noted that many of his former employees have either moved away from Los Angeles during the pandemic, studied for a new qualification, or transitioned to a different field.
“A lot of people have left the industry because they finally have the time to get around to doing the things they really want to do,” said Dixon, adding that a lot of front of house workers in LA see restaurant gigs as a temporary means of financial support while they pursue their dreams.
For some workers who stayed on during the pandemic, the experience proved unpleasant, disillusioning, or even traumatizing.
Capacity restrictions meant less tips and less reliable hours. Work posed health risks to employees and to the people they live with. During this time some employees chose to quit the industry altogether.
Even prior to the pandemic, restaurant work environments ranged from stressful to downright toxic. For some former employees who adjusted to a different pace of life, this high-pressure setting is not one they wish to return to.
“Working at a restaurant is a never-ending assault on every sense you have, whether you’re dealing with noise, or customers or problems that arise,” said Hall. “When you give somebody a taste of what freedom from that system feels like, they don’t want to go back.”
Hall also said that many chefs and line cooks were able to transfer their skills to other jobs that offered higher pay and a more pleasant working experience. These include hotel kitchens, grocery store kitchens, and ghost kitchens.
The collective impact of these factors has left local restaurants competing for a small pool of available workers and, as a result, often unable to utilize all of their available tables.
“What’s so frustrating for business owners and operators right now is that finally the demand is there and the restrictions are lifted, but we just don’t have the workforce,” said Dixon.
At the family owned restaurant Kye’s, Founder Jeanne Cheng says she has to be prepared to cover any shift at a moment’s notice as her staff levels are at the bare minimum to stay open. She has been trying to hire more workers for six months, but is struggling to get candidates to commit.
“Maybe one out of twenty people show up for an interview,” said Cheng. “It’s a strange thing; they’ll schedule with you, you’ll text back and forth and then they just won’t show up.”
Dixon noted that a similar phenomenon is happening at Rustic Canyon, where scores of applicants will disappear midway through the hiring process, presumably having found a more desirable gig.
To combat this, the Rustic Canyon Group is offering a number of incentives, including healthcare benefits, hiring bonuses and a worker referral program for existing employees.
Cheng says these practices are becoming very common and make it even more challenging for Kye’s, a small mom and pops, to attract employees.
“It’s hard to keep up if people are offering crazy things like $500 or $1000 signing bonuses,” said Cheng. “Small businesses like ours can’t really compete with that.”
When it comes to the fight for local restaurant talent, Hall said hotels are emerging as the clear winners, as they have the ability to hike wages the highest.
Santa Monica’s hotel minimum wage is $2 above that for other businesses, meaning hotels were offering competitive wages even prior to the pandemic. Additionally, hotels can use room rates to subsidize their restaurants and provide hourly wages in the $20 to $25 range, which most independent restaurants cannot match.
In the long-term, the higher cost of labor and smaller talent pool may lead to the closure of more local restaurants — even those that successfully weathered the storm of the pandemic. Yet, not all outcomes of the labor shortage will necessarily be negative.
“The operators that have survived and the new ones that are opening are going to be way more aware of what they can do to provide the best possible working environment, because they have no choice,” said Hall, adding that he hopes this will lessen the toxicity and prevalence of substance abuse in the restaurant industry.
Hall also said that the economic challenges of the pandemic coupled with the labor shortage is driving a restructuring of restaurants towards less labor dependent models. While the traditional dining experience isn’t going anywhere, locals can expect to see more counter service, ghost kitchens, and delivery-focused restaurants in the future.