That's the ultimate point isn't it, at the wages they're prepared to pay. Pay peanuts, get monkeys.

And I think its a bunch of BS about razor thin margins. If the margins are so bad, why bother going into the restaurant business in the first place.

It depends on the restaurant and type of food being sold, but generally the returns are pretty poor. The local pizza shop usually is more profitable than the local fine dining place. Protein is expensive and you can't mark it up like you can carbs. A burrito at $10 (flour, beans, rice and a bit of protein) probably has a higher gross profit than a steak at $60. The fine dining place basically runs the food as a loss leader in the hope you'll drink up big. Why do people bother? There's lot of industries with poor economics that seem to attract a lot of people. I guess owning a restaurant for a chef is a big milestone and for a lot of wealthy people it's seen as a sort of trophy.

I have a friend who is pretty successful in the food industry. He used to be in fine dining, but got out for the reasons above. Now he owns a chain of pizza places. He claims one pizza store, attached to a service station no less, generates about 2x the profit of his old restaurant.

For most restaurants, the margins are razor thin. Look at the pre-COVID failure rate. It isn't even a matter of "prepared to pay" wages, because owners generally don't have anything more to give. If you look at the work day of a small restaurant owner, 12 hours would be a short day. I've known a lot of small restaurant owners over the years, and have seen a lot of small restaurant failures from hard working, proud people that put every last cent, and have squeezed every last drop of credit, and have put out great food at fair (but not under-market) pricing, and can't make a go of it. In some places, bureaucracy in getting the doors open don't help, and make it like leaving college with untenable student loan debt before your first paycheck. But that is just one of dozens of factors.

A couple of steaks or pieces of fish "sent back" and tossed, and then replaced, could eat up most of the evening's food (not beverage) profits.

Why bother going into the business? Well, other than as a hobby where you don't care about losses, a chef is an artist, and like any artist, finely crafted his/her art, without having a clue about Finance 101, but still wants a canvas to call his/her own.

There are the people who work in the industry (primarily cooks and servers) who go into the business as they have an idea that they want to put into action, and be their own boss (I prefer these restuarants as I see and appreciate the owners putting in long, hard hours with little recompense. Their passion makes up for a lot.. Commercial viability is another topic. And then there are those who have money (or believe they have) that want to get into the business as an investment (usually via franchise - ready-made operating plan). Generally not involved on the floor/front line. These people may be sold a bill of goods by franchisors. Wired magazine has a good story about the poor reliability and finicky maintenance required for some machine (franchisees have to buy it) that they have to pay pretty expensive maintenance contracts for.

In my neck of the woods, high rent is what kills most restaurants,The consequent trend (continent-wide though perhaps just catching up with other countries) is for the food artisans to start mobile kitchens (a.k.a. food vans) where they can present their art (perhaps not in a formal setting) and at least get to control their overheads.

Whenever I am in France, I marvel at how restaurants where the proprietors also own the property underneath can take time off: They can limit their hours, such as last service for the week being Sunday lunch and not open again until Tuesday dinner.

I knew a cook-proprietor who had rent and property tax overhead of at least $17k a month. Lots to cover before you can even pay for ingredients and wages. Prior to COVID, a lot of restaurants had given up operating for lunch and dinner 7 days a week because they couldn't get staff.

There was support for employees, as they received unemployment and federal benefits in addition to that. The support was lacking for employers to continue to employ people.

Right, but in order for the employee to benefit they had to be unemployed. The program here was similar to the UK in that the government subsidised the employee's wages at a flat $750/week but only while they remained employed. Coupled with rent-relief and government cash handouts to small businesses of up to $100k that kept everyone in work even when there were takeaway only/limited seating options.

Yes, this is a better way of saying it...the government shut down indoor dining, that's a good correction to my statement. Many restaurants in our area just shut down completely. Some because they couldn't or didn't want to pivot to takeout/delivery, some because they just didn't feel like it was worth it. I'm sure there were other reasons. And then some others made it through the winter by finding loopholes - such as building indoor structures in their parking lots, which qualified as outdoor dining, even though it was no safer (and much colder!) than dining inside the restaurant. We haven't experienced any shortages at our favorite places personally either...but we're still only partially open. I have recently heard about the issue in other areas around Chicago. In any case, I actually think seeing the staff was 1/3 new is quite good. In the restaurant industry, people move around a lot or just come and go. High turnover is the norm, and in a year's time I'll bet a lot of owners are happy to have 33% turnover.

We also had a couple new places open, but not as many as normal for this area. And quite a few have delayed opening. We've been anxiously awaiting the second location of one of our favorite Neapolitan pizza places opening in our town - and we've now been waiting since last fall. Seems like everything takes longer than normal still.

So the program basically subsidized payroll for restaurant owners in order to keep staff employed. Do I understand that correctly? Did it allow employers to decrease or stop payroll for people getting the $750? If not, I don't see the incentive for employers.

There was a loan program here than restaurants could apply for, but I think it ran out of money pretty fast. I've read many quotes from chefs and owners around here who very much wanted to keep people employed. Some owners pledged all profit would go toward paying employees last year.

Regardless, the reality is that here in the US we have a high unemployment rate, still more than double what it was before the pandemic. So if there's a "labor shortage", something else is now causing it, because there are able-bodied people out of work. Sure, restaurants pay low wages and often are not fun jobs. But that's always been the case, and people took those jobs because they needed to pay their bills. I still think the only variable that's changed is that now people aren't worried about paying their bills - they're getting larger than normal unemployment benefits and don't even have to pay their rent if they can't or just don't feel like it. And again, I have no problem with all of that during the pandemic, but it seems like time to start moving back to normal.

Yes, and in the US, it was easy for restaurants to lay off employees, between some not doing carryout initially and just a general lack of demand for that many servers in a takeout only model.

Even President Biden seems to be coming around on the "labor shortage" in his comments today, although he didn't actually admit it was the enhanced unemployment that caused it.

"We’re going to make it clear to anyone collecting unemployment who is offered a suitable job they must take the job or lose their unemployment benefits." - President Biden

I agree with the concept, but not sure how it's actually enforceable - difficult to be offered a job if you aren't actually applying for one. Hopefully it gets at least some people moving.

Yes, that's correct. It wasn't just hospitality it was any business that could reasonably have assumed a 30% decrease in revenue back in March last year because of the pandemic. The employer received the money and passed it through to the employee. Even if an employee only worked a couple of shifts a week they received the $750, so the second order affect was it was also economic stimulus beyond keeping people employed. It was adjusted back in September as things got back to normal, and then ended in March. Look at the UK's unemployment rate, if the government wasn't subsidising wages it would be sky high. The latest figures were 1.7m (4.9%) people unemployed, but 4.7m on the UK's job retention scheme.

Here a lot of retailers that used the program but ended up having boom conditions have paid the money back to the government.

Here in CT the local NPR station interviewed a bunch of (again, local to CT) restaurant and business owners.

They all said the same thing:
People apply just to prove they are looking in order to get the unemployment and bonus. Some "applicants" come out and say that
People who are serious only want to work 1/2 time so they can get part-time unemployment and full bonus $$
The serious applicants aren't always qualified for the jobs that are open.

For example, the landscaping company needs someone experienced in design, drainage, etc....not a body to push a mower in straight lines.

I'm sure every state is different. In IL, you don't even have to prove you're applying unless they audit you. I took unemployment a few years ago for maybe 3 months when I got a severance package from my employer -- it was either weekly or bi-weekly I had to go online and answer some questions on a website. Basically they asked 1) if I had worked a certain number of hours in the last period, and 2) if I was seeking employment. There wasn't even a question about whether I had applied anywhere.

I was enjoying a full paycheck from my former employer and then received unemployment on top of it. All completely legal, in fact I fully explained the situation to the state agency just to make sure I wouldn't get in trouble later. Certainly a different situation than we're discussing but the end result was the same - since I had basically received a raise to not work, I didn't look for work until my severance package ran out. Seems like that's what's going on today.

We are seeing the F and B shortage in Austin. One bill they passed was to make permanent take out cocktails to go with the take out food.

Its not just restaurants.
My son runs a dental office that had the March April 2020 swoon and the State Government locked him down because he does mostly elective stuff in the office.
Once he could open back up (wisdom teeth at the end of the school year) when he recalled his staff, at least 50 percent said no thanks, unemployment and not working
was better. Over the next 6 months he has staffed up and is a little over staffed because there are so many jobs available, people still get COVID or just call in sick.
I dont see it as political, I think its economic. And it will sort itself out.

in the 90s, maybe 1996, our business was seeking a front door receptionist / staffer because we hadn�t adjusted to a phone VM tree. I still recall a person who came to fill out an application and then politely begged me to sign a line on a form with other signatures / addresses where she had applied for work. I filled out the line on her form, she exited, and i later saw a very sad application.

If the dental staff can earn as well with unemployment compared to employment at a dental office, then we can imagine the societal challenges - which can include virtual learning forcing parents to stay at home. Our planet really depends on schools to house their children during parents� working hours.

This came out

Waiters Reject Signing Bonuses, Hobbling an $860 Billion Industry

While unemployment benefits may be an issue..