The labor market crashed last year when the pandemic blindsided every business. This rendered some business models moot and demand for goods and services changed rapidly. Many industries, especially restaurants, were left with difficult choices regarding their employees. It became untenable to keep a full staff at a restaurant that couldn’t open their doors. Remote work and digital sales helped some companies survive; however, it was not a one size fits all solution. A record unemployment was predicted when dealing with the pandemic; however, most believed that when companies reopened their workers would return. Now, we have reached a peculiar situation where restrictions have been lifted and companies unlocked the doors, yet the workers have not returned. Why is there a labor shortage when we have open jobs and people without work?

As a great sign of recovery, many restaurants have now returned to a capacity that rivals January 2020. For an industry that has been starving for over a year this should be a renaissance, instead companies like Texas Roadhouse are facing the prospect of turning customers away. This industry along with others cannot hire enough workers to meet the renewed demand. The labor shortage is preventing companies from rebuilding and prolonging economic recovery. There are many possible causes for this such as health concerns and employees leaving for other industries or pursuing benefits like remote work. However, the main reason causing the most concern for employers is the high income being earned through unemployment. Many companies are unable to compete with the $300 bonus unemployment checks that are combined with what a state already offers. For example, the maximum unemployment benefit available in Florida is $575 a week which comes out to a little over $14 an hour in a 40 hour work week. Entry level jobs like cashiers and servers that get paid at or just above the federal minimum wage are having a hard time being filled. Initially, these benefits were meant to be temporary until many businesses resumed operations. The boosted payments helped soften the blow for many Americans who suddenly lost jobs and lacked other prospects. We have now reached a point where the available jobs are exceeding the number of job seekers, but the unemployment payments have been extended until Labor Day.

Many establishments are working to counteract these shortages through hiring promotions and even some state governments have stepped in. Eleven states will be opting out of the $300 unemployment checks in a bid to convince more people to return to work and aid the economy. An individual is subject to denial of unemployment benefits if they turn down a “suitable job” according to the Department of Labor. The Biden administration had to step in and call on the labor department to work with states to ensure no one is sidestepping the rules. Some businesses, like Chipotle Mexican Grill, have taken matters into their own hands by raising wages. Not all companies can afford a wage hike when they are recovering from the pandemic, but cash payments seem to be a popular trend. Some McDonald’s locations are paying $50 to anyone that showed up to an interview and others are offering one-time bonuses to employees who work for a set amount of time. Establishments have changed working conditions to increase safety and are providing more flexible hours or remote work benefits. Some of these measures are likely to be permanent and are good for employees; however, it will be of little consequence if they can’t staff enough workers to keep the doors open.

The workforce will be a major factor in the U.S. returning to normal and recovering. The disarray caused was swift and unfilled jobs will only prolong the rebuilding process. The good news is that companies are able to reopen and want to fully staff their operations. It is also a relief that there is an appetite for returning to many brick and mortar pastimes. Workers returning to these jobs are only a piece of the puzzle in ending the pandemic. We all want to return to our favorite restaurant or theater, yet it won’t matter if no one is there to turn the lights on.