“I know it’s going to be different. I know I’m not going to have the same hours. I know I’m not going to be making the same money as before because everyone will be scared to be around other people” said Jesus Acosta, an unemployed restaurant server from the Greater Seattle Area. Acosta’s situation is the unfortunate reality that many service workers will face even as some states plan on lifting stay-at-home orders and reopening parts of the economy as early as next month. Although restaurants and bars will eventually open their doors to customers, they will not operate at their previous capacity until customers are assured that they are not at risk of contracting COVID-19. For service workers, especially those in the food and beverage industry, who typically earn 45% of their income from tips, it’s not a question of whether but which other sectors of the economy they will transfer into.
Even with restaurants and bars open, it may be at least a year until these types of businesses experience customer volume prior to the pandemic. The National Institute of Health’s lead COVID-19 scientist, Dr. Kizzmekia Corbett, recently told CNN’s Anderson Cooper that the target for releasing a vaccine to the general public would be next spring if “all things go well”.
However, assuming no hiccups in a vaccine’s development, service workers are expected to experience a strain on their income. Once they return to their restaurant or bar jobs, these workers will see less earnings in the form of tips. That is also assuming that employers will rehire the same number of workers prior to the pandemic. Erika Barragan is another server from the Greater Seattle Area who was recently laid off from a restaurant where she had been employed for over 12 years. Barragan says that once restrictions on restaurants and businesses are lifted, her past employer wants to bring everybody back to work. However, with an average profit margin for full-service restaurants like Barragan’s standing at a meager 6.1% in 2018 when the US economy was strong, employers will be forced to reduce their staff, reduce hours for their employees, or reduce wages. But with many employers already paying a minimum wage, the latter is not a possibility.
With the uncertainty of not being rehired or not receiving enough hours to compensate as a full-time income, restaurant workers will need to look for new jobs. But the question remains of where will these workers go? With the food and beverage service industry already uniformly grappling with their own employee layoffs, getting another restaurant or bar job will be difficult. Acosta reported that he would gladly take a cook position despite his conventional role as a server but most restaurants he has talked to suggested they will not be hiring new employees anytime soon. Transferring into other industries will also be problematic, especially those without a college degree, because of how vast the pandemic has affected the economy.
As a result, many restaurant workers will be obliged to turn to unemployment. But with unemployment benefits in most states lasting 26 weeks and the CARES Act only providing an additional 13 weeks of benefits, workers may not be able to wait out the pandemic on the state’s dime as it may take far longer for the economy to find jobs for all the workers displaced by COVID-19.
On the national level, seasonally adjusted initial unemployment claims were 5,245,000 for the week ending April 11. This brings the total initial claims to around 22 million, or roughly 13.5% of the US’s labor force since March 14. Meanwhile, in Washington the claims filed the first week of April alone totaled 171,252, and this is a 164,953-increase compared to the same week one year ago. This brings the total number of initial and recurring unemployment claims in Washington to 585,983 or nearly 15% of the state’s labor force. Looking specifically at food services and drinking establishments, employment is down 11,300 over the month of March. Over the year, employment in this sector is down 6,700.
These numbers along with slowdowns in the overall economy suggest a competitive job market not seen in years. However, there is still hope. Companies like Amazon, Walmart, and CVS have announced they will be hiring thousands of workers, both full-time and part-time in the coming months. Additionally, Instacart, which is a grocery delivery service, has announced that it will be hiring as many as 300,000 full-time shoppers as demand for grocery delivery has skyrocketed as Americans stay home. Many of these positions do not require a college degree and necessitate minimal training.
Two or even three part-time jobs might be the new normal for many Americans in the coming months. It may be more common to see individuals who previously worked 8 hours shifts, 5 days a week in a restaurant working only 5 hours shifts, 3 days a week while also supplementing that with deliveries of groceries or time spent as a store clerk on the other days of the week. When asked about finding another job when she begins working again for her previous employer, Barragan responded with “oh yeah, I need to find another job…I’m going to be struggling for at least a year.”