Restaurants and Unemployment Benefits: No, Your Favorite Restaurant is Not Understaffed Because People Are Too Lazy To Work!

BY Inna Burlingame

Governor Larry Hogan recently posted another “L.”

On July 12, a Baltimore County Circuit judge ruled against Hogan’s premature withdrawal of enhanced unemployment insurance benefits – one week before the Governor reinstated the pandemic state of emergency, after all. This court’s decision and the governor’s untimely PR is the latest in a series of “L”s for the highway-loving 2024 GOP presidential aspirant, casting himself into the no-man’s-land of Republican politicians who believe that the COVID-19 threat is real, while also maintaining that unemployment benefits during the pandemic made service employees too lazy to return to work.

Hogan has repeatedly declared that Maryland is “Open for Business.” As an official status of public health reopening protocols, no one disputes this. Does this declaration, though, mean that businesses are open to compete for new hires on the open labor market, or does this mean everyone needs to be forced back to work as if it were 2019 all over again? Declaring the state, or the county to be “open” for business erases the realities faced by small business and labor alike, that simple declarations do not enable an easy snap-back to the way things were. Nor should it.

Some restaurants have closed permanently. The beloved Harp and Fiddle in Bethesda closed permanently after 35 years. They were not able to weather the public health restrictions in the midst of the pandemic. The popular bar and music venue, and the jobs and community vibe that came with it, will never come back. Other restaurants have found the road back to normalcy a tumultuous and rocky one. Kaldi’s Social House in Silver Spring has been gradually adding staff and expanding its hours after a long closure and interim period of limited hours of operation.

Essentially, restaurants have been starkly divided into the Haves and Have Nots. Those with existing financial cushions or easily adjustable COVID-friendly settings maintained disproportionate business advantage. None of this is the fault of the restaurant owners for poor business planning – a lot of it was luck. Who would have known how important access to outdoor space would be? Those restaurants, bars, and cafes fortunate enough to be situated close to county Streeteries – an innovation of the County’s reopening agendas under Executive Elrich, that closed streets to traffic for free public seating – were able to keep a steady flow of patronage, as opposed to more hole-in-the-wall nooks in dense urban and heavily automobile traffic settings. With these types of adjustments, some of which proved very costly, the already high bar to restaurant operational success became even higher.

Conservatives claim that the enhanced unemployment insurance benefits from the pandemic state of emergency are incentivizing people to stay home, collect money from the government, and not go back to work. Restaurant signs claiming “No One Wants To Work Anymore!” have gone viral with claims that people are simply living the dream collecting $600 per week on the couch (as if that would be enough to live on in a place like Montgomery County).

In an interview with Omar Lazo, owner of Los Chorros in Wheaton and President of the MoCo Latino Restaurant Association and now Democrat for County Council District 4 candidate, unemployment benefits turned out to be low on the list of factors preventing restaurant staff from going back to work. Lazo noted multiple other factors that have prevented some of his own restaurant staff from returning to work. In a status which Lazo describes as a chain reaction, other closures have led to restaurant closures and restricted hours. With schools and daycares closed, some of his restaurant workers have not had access to childcare during what would have been their normal work hours. Economic factors have also driven some service employees to move elsewhere – young workers have moved back with their parents; others have moved to lower-cost areas. Still others have found other work, as opposed to waiting for a call back from their old job.

Lazo also described additional factors that have driven up operating costs of restaurants – some of which, in turn, have driven restaurants to raise prices. The cost of food, especially meat, has escalated, beginning with the closures of meat packing facilities due to public health concerns and coronavirus outbreaks. If the cost of food and infrastructure increases, and if general consumer goods increase in price, then wages would need to increase as well. The unemployment insurance only gives the workers leverage – it is not a substitute for work.

The other rising costs known to affect consumers are also affecting restaurants. The cost of lumber and construction has soared, contributing to an already inflated housing market, which has trickled down to high rents. These costs apply to commercial property as well, once again raising the barrier to entry for small businesses even more. As new mixed-use development is approved – all well and good, in many cases – exactly what kind of business tenants would be able to afford the retail and restaurant spaces? For those of us who enjoy locally grown family businesses, the prognosis amid all the rising costs is not so rosy.

Essentially, unemployment benefits are not incentivizing workers not to go back to their old job. It instead offers leverage against going back to a job that has become harder. The same job now has more tradeoffs, risks, and associated costs.

In County leadership, Lazo says, we need more engagement with BIPOC-owned businesses that are navigating our assistance programs and regulations. As candidates running for office focus on ways to appear “business-friendly,” an effective administration should understand that the candle is burning on both ends for some of these restaurants. Costs are increasing, revenue lost from the pandemic has not been recovered, and staff needs to be retained. To move forward, County leadership needs to engage restaurant owners – and staff! – in the decision making processes to implement sensible, public health-sensitive regulations and effective strategies to ride out, and evolve, the phases of this pandemic.

Inna Burlingame, environment & labor activist

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