Jobs Return, Restaurants Struggle to Hire

Some blame bolstered unemployment benefits, but others say service industry jobs don’t pay workers enough to live in the city.

With the statewide reopening date of June 15 rapidly approaching and the glimmer of a post-pandemic world in sight, the San Francisco job market is slowly rebounding. 

In late March, the city entered the second least restrictive tier for COVID-19 constraints, allowing businesses like bars and breweries to reopen and places like restaurants and movie theatres to expand capacity. In the month following, the unemployment rate for San Francisco and San Mateo counties fell to 5.1 percent –– down from 5.2 percent the month prior and 12.5 percent in April 2020, according to the California Employment Development Department

Of the 15,100 jobs rejoining the market, the leisure and hospitality industry registered the most growth, with bars and restaurants accounting for approximately 70 percent of the jobs in that category. 

Rodney Fong, who serves as the president and CEO of the San Francisco Chamber of Commerce, says over the last few months, more jobs have come onto the market at one time than ever before.

But as capacity restrictions go away and the service industry, in particular, staffs back up, he is concerned over whether those workers are still in the Bay Area or if they have opted for higher-paying work. 

“San Francisco, a hospitality city, is so dependent on those types of service jobs that [the labor shortage] addresses some other critical things like minimum wage, like housing in the Bay Area and the affordability in the Bay Area for those lower-paying service jobs,” Fong says. 

Over the past year, the leisure and hospitality industry has been hit particularly hard, reaching a national unemployment rate of 35.9 percent at the height of the pandemic in May 2020, according to the U.S. Bureau of Labor Statistics. 

Madeleine Michaels, an assistant manager at Barley, is one of the many hospitality workers who spent much of the last year receiving unemployment benefits from the federal government. The craft beer and wine bar, nestled between the Polk Gulch and Tenderloin neighborhoods, where Michaels now works, was originally slated for a grand opening in June 2020. 

But when the pandemic hit, the opening was delayed indefinitely, and Michaels was laid off from another bar in the city where she worked.

“There were times that the extra $300 was helpful,” she says, “but it was nothing compared to what we were making prior to the shutdown.”

In the fall of 2020, Michaels ended up picking up a few shifts at Finnegans Wake for about three or four months. But working a handful of hours on Friday and Saturday nights was less than what she would have made from unemployment benefits.

“I would have to let unemployment know how much I made at Finnegans over the two weeks, and unemployment would cover the rest,” Michaels says. 

As bars and restaurants prepare to welcome San Franciscans inside without capacity restrictions, industry workers say hiring has become a challenge. 

Before the pandemic, Kylie Wyart, a general manager at Café Meuse, says finding people who wanted to work at the Russian Hill wine bar wasn’t difficult.

“You’re making tips, you’re making decent money, and you’re working with wine and eating good food,” she says of working at the wine bar pre-pandemic. “This isn’t the kind of job you had to beg people to do.”

But when Café Meuse was ready to hire more staff following the shelter-in-place orders, Wyart says they struggled to rehire former employees who had been previously laid off. Recruiting via online ads and signs in the store window hasn’t been going much better as many of those selected for interviews haven’t even shown up. 

Wyart says she believes the reason is two-fold. COVID-19 still remains a concern for many, and essential workers risk exposure to the virus. The federal government also is still paying out an additional $300 a week for those on unemployment, which she says may deter people from coming back to bar and restaurant jobs –– especially if they’re making less in tips or only can get part-time work.

But some economic experts say that added unemployment benefits aren’t the reason jobs are going unfilled. A September 2020 report from the Federal Reserve Bank of San Francisco suggested that even an additional $600 a week, which unemployed individuals received at the height of the pandemic, didn’t discourage people from working. 

“First, when assessing whether to accept a job offer, benefit recipients are likely to place more weight on the long-term income associated with a lasting job than on the temporary income available from [unemployment insurance,]” Nicolas Petrosky-Nadeau and Robert G. Valletta wrote in the report. “Second, labor market conditions have been quite weak, with many job seekers and few job openings.” 

Still, more than 20 states have decided to end the additional $300-a-week unemployment benefit, which runs through Sept. 4. 

In his role at the chamber, Fong can attest to the labor shortages in the San Francisco hospitality industry. But in the local architecture, engineering and bioscience industries, he says he isn’t seeing the same workforce deficits. 

And that, he believes, is in large part because of the Bay Area’s skyrocketing housing costs and lacking transit system, which has pushed many service workers to commute into the city from areas such as Modesto, Vallejo or Sacramento. 

Despite the reopening, Fong said he believes the unemployment rate will continue to fall in the coming months. 

“I’m optimistic, in that from the city’s perspective, that it will be a very busy summer in San Francisco, and those jobs will need to get filled before businesses can fully open,” he said. “I also would expect that some of the pay will start to increase because of sheer competitiveness to make sure they’re able to hire and secure people throughout the summer.”

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