Restaurant reopenings boost recovery in US jobs market

In December, Justine Masters let go a third of the staff at her Jamaican and British fusion restaurant The Edge Harlem “in order to survive”.

But now she is one of an increasing number of restaurant owners expanding their workforces as warmer weather boosts demand for al fresco eating while the return of indoor dining brings the promise of more customers.

Restaurants and bars added 285,900 jobs in February, the Bureau of Labor Statistics reported last week Friday, a massive increase over the 17,000 added in January.

When combined with hotels and recreational facilities, restaurants accounted for the bulk of the 379,000 jobs added to the US economy last month, helping nudge the unemployment rate down to 6.2 per cent.

There’s no real fear of us shutting down again because it seems like we’re making such strides

“We cautiously are preparing ourselves to be busy again,” said Masters, who is planning to reopen her dining room to supplement her outside tables and takeaway and delivery service. “Seeing as we are a small establishment, it doesn’t take that much to make us busy.”

Economists hope the hiring bump signals the end of a terrible year for a restaurant industry that was among the sectors hardest hit by the Covid crisis. It might also be a harbinger of an economic growth spurt in 2021, fuelled by the vaccination rollout, declining virus cases, and President Joe Biden’s $1.9tn stimulus package.

Oxford Economics on Monday said it expected US gross domestic product to increase at a rate of 7 per cent this year, its fastest pace since the early 1980s.

“Conditional on hitting some of these vaccine targets, this does suggest optimism for the spring and particularly for the summer that the sector can see job gains similar to what we saw in February or maybe even larger,” says Nick Bunker, the director of research of the hiring lab Indeed, the jobs site.

However, Bunker warns that the improving trend could stall if the inoculation drive falters or case numbers start to rise again.

Even with February’s boost, leisure and hospitality businesses still employ 3.5m fewer people than they did before the Covid crisis. The sector lost 7.7m jobs — or 47 per cent of its February 2020 total — when the pandemic set in last March.

The governors of Texas and Mississippi have fully lifted Covid restrictions on businesses, while several other states have nudged up occupancy caps. Warmer temperatures are likely to make outdoor dining more attractive, too.

Biden’s $1.9tn stimulus bill, which includes $25bn for grants of up to $10m each for struggling independent restaurants, is also on the verge of passage. The US Senate narrowly passed the bill on Saturday and the House of Representatives is expected to approve it on Tuesday before sending it to the president’s desk to be signed into law.

Karishma Thomas, an event co-ordinator at an Indian fine dining restaurant in New York, returned to work from a furlough last month. It was the third time she had done so since the pandemic began. 

“There’s no real fear of us shutting down again because it seems like we’re making such strides in this next window,” Thomas says. “Just because we have closed so many times before, there was always this fear of us going back to work and then worrying about shutting down because the numbers were escalating.”

Thomas says the demand for dinner reservations is steadily increasing, and shows no sign of slowing down.

New York City permitted restaurants to reopen their dining rooms after a months-long closure on February 12, first at 25 per cent capacity and now at 35 per cent.

Masters, who co-owns The Edge with her sister Juliet Masters, decided to delay reopening fully until staff could get vaccinated, and now estimates that 60 per cent of those who interact with customers have had their first shot.

When The Edge fully reopens later this month, they will have more seats — and staff — than ever before. New York City’s “Open Restaurant” programme allowed them to add tables and 16 additional seats on the sidewalk outside, something that was prohibited before.

Masters estimates that they will need to add six or seven employees to their current staff of 15 to service the extra covers.

But not all restaurant jobs are likely to return quickly, if at all, even as the Covid crisis recedes. As many as 110,000 dining establishments — 17 per cent of all restaurants — permanently closed during the pandemic, and an increased reliance on takeout and delivery could mean they need fewer “front of the house” staff such as hosts and servers.

“Although some operators foresee a normalising of business conditions during the next several months, the time horizon for a recovery in the restaurant workforce will be significantly longer,” said Bruce Grindy, chief economist at the National Restaurant Association.

A survey of restaurant operations conducted by the association found that six in 10 restaurant operators think it will take at least seven months for business to return to their pre-pandemic levels.

Still, Masters is hopeful that the vaccine will make it possible for New York’s shifting Covid restrictions to be permanently lifted.

“It’s a lot of adjustment,” Masters says. “It’s like doing a dance, a nonstop dance.”