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Utah restaurants pressured by record unemployment lows

Beyond burger with runny egg

I’ve been covering the issue of restaurant staffing with increased scrutiny of late. It’s a story that I believe we’ve only just started to turn the first few pages on; more prologue than end credits. And yet, many still aren’t paying attention.

Onlookers have blamed everything from a lack of patriotic duty, to van life wannabes, through to those fat juicy guvmint paychecks. You might recall in this piece back in August, I asked the following:

Lastly it should be noted that we’re almost knocking on the door of record unemployment levels. That low tide was set back in 2006, with just 2.4% unemployed. Should we reach or surpass that level again, is it even plausible to suggest that staffing issues are merely the fault of some recalcitrant worker class refusing to get off of Tik-Tok and federal benefits. Quite.

Well. Guess what folks. We’re there. Data from the Utah DWS now reports a record all time low unemployment of just 2.2%. This smashes a fifteen year record for the Beehive, and is also less than half the national average which clocks in at 4.6%. Only Nebraska can claim to have us beat when it comes to employment levels. Contrary to weak-minded belief, people are working.

While many independent restaurant job postings now show hourlies over $20 – plenty have yet to hear the news; it’s still all too easy to find businesses dangling sub $10 hourly rates. It’s equally simple to dig up a story from a desperate business owner, hand-wringing over their existential crisis. Why won’t people just come back to work they wail.

As I am so Clavin-like fond of droning on about – watch the big guys if you really want to divinate. In corporate land, Raising Cane’s and Starbucks have recently targeted $15 as a basic wage for their employees. That’s still hardly Mansa Mura territory mind. To quote that August story once again:

Lets put that $15 per hour wage into some context as well. Working even a forty hour week (not out of the imagination) yields a little over $31,000 per annum, a rough take home of $25K. With the average rent in Salt Lake county assuredly now passing the $1,200 per month mark, this puts solo renters into what the Deseret News cites as “severely cost-burdened, meaning they pay more than 50% of their income on rent, according to state and federal data.”

The now perilously small pool of available labor might just force a few reluctant owners to fig deeper. As economist Michael Jeanfreau from the DWS told FOX 13, “Labor shortages sound scary because it’s scary for the average employer, but it’s great for the average citizen of Utah because it’s a time of huge opportunity. For most people they’re able to get the best value for their labor, and that’s the key for the American idea of capitalism.”

Wages of course are only one factor at work here. This piece by Restaurant Business Online cites a study by Joblist, highlighting the fact that 58% of hospitality workers surveyed intend to quit their positions by the end of 2021. A massive 20% of those queried confirmed they’d be leaving the industry full stop; the pandemic giving many a time for reflection on their career path – before duly recalibrating and retraining.

A quick gaze into the crystal ball suggests all of this will have a profound effect on the local food and beverage scene. As I said at the top of the page, we’re still early doors here. It seems incredulous that we can sustain the current explosion of home grown mini-chains Utah is experiencing; a dizzying big bang of a thing with everyone reporting their second, third and tenth location opening. Contraction and closure feels inevitable. Lets not even get started on the soaring commodity costs and the typical reluctant Utah wallet to offset that. This might be the unexpected brick wall that finally halts the fast-casual Big Bang of the last five-ten years.

Anyway, that’s my two cents for the day. As ever, remember to smile and tip your server dear reader. It might be the last time you see them.

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