Service Industry Worker Shortage Exacerbated By Employees Leaving… Forever

Working in the service industry has always come with a plateful of shut-up-and-take-it: Late nights, missed birthdays, rare paid time off, scarce health insurance, demanding customers and low pay. 

“All of these these things were things that everybody just kind of knew and accepted,” said Lamar Cornett, who has held restaurant jobs for 21 years. “Until the world fell apart.”

The COVID-19 pandemic upended life in America, including where we spend a lot of our time — at work. Currently, the country is facing a labor shortage in many sectors. But, the leisure and hospitality industry is worse off nationwide than several other areas, including manufacturing and retail, according to data from the national Bureau of Labor Statistics. You’ve probably noticed the restaurants with signs advertising $100+ sign-on bonuses and higher wages. 

Bosses shake their fists at increased unemployment payments, and economists say that has likely had an impact. But, the restaurant and bar workers of Louisville see another side of the story that experts also endorse: A workforce that is sick of an unforgiving work life that was made worse by the pandemic, inspired to switch careers by the shakeup of the social order and the availability of jobs in other fields. 

In April alone, 4 million people quit their jobs, according to the Bureau of Labor Statistics. Employees in the leisure and hospitality industry were the second most likely sector to see departing workers, with 780,000 of them exiting.

“I think what the pandemic did is it gave people a lot of time to think. It gave people a lot of time to reflect and asking themselves, you know, do I really want to do this when I go back to work, or do I really want to find something else out there that might pay more,” said Uric Dufrene, an economist and the Sanders Chair of Business at Indiana University Southeast, who also said a lack of child care could have impacted people hesitating to return to work. 

Cornett, unhappy in a chef job at a local, casual-dining restaurant, almost quit during the pandemic to work at a factory or warehouse. But, the 40-year-old was offered an opportunity to run the kitchen at a new concept — the Sally Forth Taproom — with more creative power and better pay. So, he stayed. 

That has not been the case for some of his peers, like Kathryn Jacob, who took her LSAT while unemployed and plans to go to law school instead of continuing her career of 22 years as a server, currently at Seviche. 

She compares her current mindset to the song, “My Shot” in the musical Hamilton, in which a “young, scrappy and hungry” Alexander lays out his plan to use the American Revolution as a stepping stone to a better life. 

“I’m 42 years old, so, this is my opportunity,” Jacob said. “I’ve prepared for a long time for it. I’ve thought about it. I just have this opportunity to take this and go right now.”

Jacob, Cornett and other service industry workers that LEO spoke to said they want more for their hard-working restaurant industry compatriots, including higher wages and better benefits — which is already starting to happen in response to the labor market squeeze. But, are the new postings for jobs $15 an hour-plus here to stay?

Lamar Cornett in the kitchen of the Sally Forth Taproom.

Multiple Possible Reasons For Shortage

Chad Coulter has not seen the harshest of the service industry job shortage’s impacts. His business baby, Biscuit Belly, is a brunch restaurant with an early-morning schedule that he thinks attracts workers. But, he’s also increased wages at his locations in order to retain his employees: His back-of-house workers make $13 an hour and above. 

He sees a couple factors exacerbating his fellow restauranteurs’ employee search, including workers leaving for other jobs and increased unemployment benefits. The federal government added an extra $300 per week to unemployment during the pandemic.

Dufrene said that these factors are likely driving the employee shortage in the restaurant industry and other sectors, but it’s too soon to tell which is having the bigger impact — or if the honor goes to some other economic impact of the pandemic, such as a lack of child care options or a lingering fear of COVID (which Dufrene didn’t address, but  is a theory that has been floated by other economists). 

“People can speculate,” Dufrene said, “but for more to be comfortable, I would want to see more data and more time.”

Nationwide, though, there were actually more service industry jobs available than unemployed service industry workers, according to the latest data available. As of April 30, there were approximately 1.5 million openings in the leisure and hospitality sector and 1.4 million unemployed workers as of the end of April. The service industry gap is worse than it is retail and manufacturing, although not as bad as in the healthcare and business service sectors. 

Data isn’t available for the Louisville Metro area, Dufrene said, but he suspects that the city and its surrounding areas have the same problem.

Dufrene does know that the Louisville Metro area has almost worked itself back up to the same amount of service industry jobs as it had pre-pandemic. In May, there were around 62,000 jobs available in the leisure and hospitality industry, compared to around 72,000 in the same month in 2019.  The unemployment rate for the Louisville area would also be considered low in a normal year, at 3.7%, Dufrene said. 

In addition to people leaving for different jobs, some employees during the pandemic have decided to retire, said Dufrene. 

There are aspects to the service industry — irregular schedules, low pay and a lack of benefits — that may incentivize its workers to search for a new job moreso than employees in other industries, according to Dufrene. 

“They’re being rational in their thinking,” he said. 

What makes the industry unappealing to some people may also attract others. 

Stacy Roof, the president of the  Kentucky Restaurant Association, said that the service industry’s nontraditional schedules are also more flexible. 

Workers who LEO spoke to who are leaving the service industry, though, say that the perks of the job aren’t worth the drawbacks. 

Why Workers Say They’re Moving On… And Staying 

Camila Jasis-Wallace, 34, had been working in the service industry for 12 years when she was let go during the pandemic. She had held on as a server for so long because the money came fast and it provided flexibility for her other career as a burlesque performer — despite the fact she only made $2.15 per hour before tips, just above minimum wage.  

But, the events of 2020 — the pandemic and the social justice movement — showed her what she really wanted to be doing and made the drawbacks of the job untenable. 

Camila Jasis-Wallace (right), serving with Feed Louisville.

When she was forced to take a break from the service world, Jasis-Wallace began to work in outreach and mutual aid. It started with the Breonna Taylor protests, where she came to the aid of demonstrators with food and supplies. Then, she joined Feed Louisville, a grassroots group that formed during the pandemic to supply the houseless community with chef-quality meals and essentials.

Now, she doesn’t want to leave the social services sector — which she had dabbled in before 2020, but hadn’t fully committed to. 

“Seeing, like, a lot of different facets of the community come together for a joint cause during what was arguably one of the most devastating years of our collective experience, seeing people tying together, I felt it was a far more fulfilling thing than I had ever been a part of in all my years of the service industry, whether I was a server or a host or back of the house,” she said. 

Jasis-Wallace also realized that the risk of picking up a COVID variant wasn’t worth it for her to return to waiting tables, nor was the amount of pay or the sometimes entitled and aggressive customers. 

“I think that 2020 taught everyone a lot of what they were capable of,” she said. “And, you know, taught a lot of people what they wanted to demand themselves.”

There are things that Jacob, the server turned law school student, loves about the restaurant industry, such as her coworkers and her longtime, generous regulars. But, the pandemic set her up to pursue an alternative career. 

When she was laid off at the start of COVID, she finally had time to study for her LSAT. She devoted herself to her studies and passed. Now, she plans to attend law school and go into art law. 

The pandemic also showed her the vulnerabilities in the service industry. Before, she figured there would always be a job available to her. Until there wasn’t.

“It made me want to pursue something where I knew, like, if something like this happened again, which is totally in the cards, right, I could have that position where I could work from home and not be put in the position of being exposed or whatever,” Jacob said. 

She already caught COVID after she went back to work, although she’s not sure where she picked it up. It stole her sense of smell, which still affects her job as a server. 

Kathryn Jacob with her LSAT study materials.

There are other aspects of the service industry that she won’t be sad to leave behind, such as its sometimes toxic relationship with substance abuse, which the sober Jacob now avoids (and actively combats with her recovery group Ben’s Friends). She also dislikes the late hours and having to miss family celebrations, which is made harder by the fact that her husband is also in the industry.

“I’m looking at this as my shot to move forward towards something where maybe one day… I can go to a restaurant and have, my husband and I will have our favorite server and we’ll give them wedding presents, you know? Stuff like that,” she said. 

Jacob currently plans to continue to work as a server at Seviche while she goes to school. But, if it conflicts too much with her studies, she is willing to leave. 

Jon Larmee, another service industry worker pivoting to a different career — teaching — said he was inspired to switch to a job with a more forgiving schedule because of the birth of his daughter. But also, because the pandemic exposed how demanding customers could be.

Other workers have stayed in the industry. But, they are in jobs in which they feel respected and taken care of. 

Felicia Corbett, the beverage director at Trouble Bar, said she went back to work during the pandemic when she was offered the chance because she likes to keep busy. Plus, her employers work around her schedule and respect her safety concerns. Corbett has cancer, and all of the staff at Trouble Bar still wear masks in solidarity with her and her compromised immune system. 

Cornett, the chef who now runs the kitchen at Sally Forth, returned quickly to his old job at the beginning of the pandemic because he wanted to see people and he felt compelled to help out his co-workers. 

“In retrospect, I kind of wish that I had just stayed home, honestly,” he said. 

Cornett was working even longer hours than usual, was vulnerable to COVID because of his asthma, was dealing with hostile customers and was made to work past curfew during the protests, which he felt endangered him as a Black man. His pay did go up $5 an hour to $18.50, which he appreciated, but it dropped to $14.50 as the pandemic carried on, he said. 

Cornett was about to take any other job he could before he got the offer to work at Sally Forth. Now, he’s creatively satisfied, and making more money than he ever has in his life: $30,000 a year with tips. He’s still busier than he would like to be with work, but he said that his boss is slowly working up to hiring more staff so that they can be paid a fair wage. 

Exploitation in the industry and the undervaluing of workers is the root cause of the service industry shortage, he believes. 

Is that changing? 

Will The Industry Change?

Cornett is a member of several Louisville service industry Facebook groups, and he’s noticed an interesting trend over the last several months. If an employer or hiring manager posts on the group with a job listing that pays lower than $15 an hour, they’re getting laughed off the page, he said. 

“I have personally seen a lot more reasonable job search advertisements,” he said, usually ranging from $14-$17 an hour. 

The hospitality industry is typically one of the lowest paying sectors, said Dufrene. But, the natural response to the worker shortage is increased offerings. 

Larmee said he has seen other benefits start to pop up in job listings that aren’t t traditionally offered. 

Cornett is pessimistic that increased wages will continue. But, it’s a hard perk to strip away, said Dufrene. 

“Wages tend to be sticky,” he said, “and once there’s a pay increase, it’s hard to tell an employee that we’re going to have to reduce pay, because then they’re going back to the same challenge they had before and that’s losing people, right.”

But, increased wages might lead to higher costs for customers. 

Brian Holton, a co-owner of Monnik Beer Co., said that last year, he was having trouble even getting people in the door to interview for his available jobs. He increased his cooks’ pay by a couple of dollars. But that, combined with an increase in cost for some goods, led to him raising prices on over half of his menu items by around $1.

Monnik’s Germantown location is now fully staffed, said Holton, but the New Albany location is still working its way up. With the increased labor and good costs, Holton anticipates raising prices again in the fall.  

Coulter, with Biscuit Belly, said he has managed to keep his prices the same, but he might have to raise them if the job market doesn’t change.

Holton said, “I think that the customers are just kind of have to get used to paying higher prices across the board. So I don’t I don’t see any any way around that.”

Brian Holton, co-owner of Monnik Beer Co.

Dufrene said that prices for products have gone up in the U.S., although mostly for used cars, and financial market indicators suggest that the country won’t see “runaway inflation.” He does foresee employers investing in technology and equipment that will increase productivity from workers. 

Regarding unemployment, Gov. Andy Beshear recently announced that Kentucky workers who are still drawing the benefit will receive a $1,500 incentive if they return to work by the end of July. 

It’s too soon to tell how much this strategy will change things, said Dufrene. 

The KRA has expressed support for ending the supplemental unemployment benefits. They were one of several business groups that signed a letter to Beshear requesting that he ask the federal government to end the supplement. But, the puzzle of what to do about workers that have retired or moved on to different careers will remain regardless of unemployment benefits ending. 

Roof believes that restaurant employers should start attempting to attract different demographics of people to work in the restaurant industry: younger and older employees and those who haven’t worked in service before. 

Cornett sees the Louisville restaurants paying their employees more, and he wonders what was holding them back before. The service industry might have a low barrier to entry, but he doesn’t like the term “unskilled labor,” because it doesn’t match his experience. 

“Anybody that’s ever worked Friday night in the kitchen, I don’t care if you are just flipping burgers, will tell you there’s a whole lot of skill required in that job,” he said.

Now that he’s making a better income, he’s been able to catch up on his bills and do the things and buy the things he always said he wanted to “if I had some money.”

And, he’s happy in his career.

“It’s a fun, fulfilling job, especially, like, you know when, for me, I get to create my own shit. And I would do it for, you know, lower pay, but, like, there’s lower pay than what I make now and there’s lower pay than what it would take to survive,” he said. “No matter how much I love a job, I still got to eat. So, working this job now where I’m making a good amount of money, and I get to be creative, and I’ve only got one boss, that’s really awesome. I’ve never felt more like fulfilled, and more validated in my career, you know?” •