Restaurant, Retail Jobs Go Begging
When Sivi Stuart signed on to wait tables at Marie Callender’s Restaurant in San Juan Capistrano, nobody told her the job would involve out-of-state travel.
Stuart and a dozen other servers, cooks and busboys from the chain’s restaurants in Southern California were shipped to Houston two weeks ago to work at the firm’s newest--but critically short-handed--eatery.
They were sent after Marie Callender’s scoured all of Texas unsuccessfully for workers. The chain spent several thousand dollars on employees’ air fare, hotel and meals so the restaurant could open on time.
Marie Callender’s struggle to find sufficient workers has become an all-too-familiar tale. As the nation marked 15 consecutive months with unemployment below 5%, businesses that rely on low-wage employees--mostly restaurants and retail outlets--say they are hurting for workers. Many are resorting to extraordinary measures--such as doubling the minimum wage--to recruit employees.
The labor shortage is affecting businesses of all sizes--from the Moorpark Pharmacy in Ventura County, which hires a handful of workers, to Wal-Mart, the nation’s largest private employer with 720,000 U.S. employees.
“It’s an epidemic,” said Bruce Van Kleeck, vice president of the National Retail Federation, the nation’s largest retail trade association. “For many businesses, it’s a daily battle to keep the doors open.”
“We’re encountering the most acute labor shortage in the post-war period,” said William T. Wilson, an economist for Comerica Bank in Detroit. “Fast food restaurants here are putting up signs advertising $400 signing bonuses.”
Even Friday’s unemployment figures--which showed the September unemployment rate rising slightly to 4.6%, up from 4.5% in the previous three months--proclaimed a robust retail sector. More than half, or 53%, of the 69,000 jobs created in September were in restaurants and retail outlets.
During the last year, retail trade has been one of the fastest-growing sectors, averaging 41,000 new jobs a month.
“More people are showing up and spending their money at the restaurants and at the malls,” said Ken Goldstein, an economist with the Conference Board, a New York-based business research group. “That’s not about to stop.”
Faced with this prospect, retail firms trying to hire kitchen helpers and other low-wage workers often raid their competitors’ ranks. Others double the $5.15-an-hour federal minimum wage. Some dangle signing bonuses--an incentive usually reserved for professional athletes and high-tech employees. Many grant instant interviews to anyone who inquires about a job.
“The demand for labor remains as strong as any time during the last 4 1/2 years,” Goldstein said. “This is not an economy that’s about to fall into recession.”
Labor Shortage Expected to Worsen
The hiring situation is expected to get worse--at least in the near future.
The Block at Orange, a $165-million sprawling retail and entertainment center, is expected to hire 3,000 retail and restaurant workers from an already depleted pool when it opens next month.
Many business owners now worry that there might not be enough workers to wrap presents and wait on customers this Christmas season.
The labor shortage is so severe in Michigan (where the unemployment rate is only 4.2%) that a Burger King in Detroit had to close its dining room and offer only drive-through service because managers couldn’t find enough people to staff the counter.
“This is the most difficult it’s been to hire workers in 50 years,” said Jeff King, founder of the University Restaurant Group, which owns eight restaurants including the Water Grill in Los Angeles.
At Santa Monica’s Third Street Promenade, “now hiring” signs on storefronts are as ubiquitous as street performers.
The Stop’n Cafe’s “Help Wanted” sign duels with Fatburger’s across the street: “Whistle while we work? Hell, we don’t mind if you sing. Now Hiring.”
David Guerci, who owns Indian Arts clothing and gifts store next to Fatburger’s, stuck a “help wanted” sign on his window two months ago and raised his hourly wage to $7, $1.25 more than the state minimum. He still hasn’t found a clerk.
“It hasn’t made a difference,” Guerci said. “In two months, only three people have made any serious inquiries.”
The labor shortage has also spawned a small but unlikely set of commuters--like the Marie Callender’s employees who were sent to Houston.
On some days, Lisa Caviezel drives her Chevy Tahoe 220 miles--that’s a 4 1/2-hour trip--from her rural San Joaquin Valley home to fill in at the understaffed Sun Shade Optique store at Third Street Promenade.
Caviezel, who normally runs the Sun Shade store in the Hanford Mall, spends nights at a neighborhood Travelodge when she is needed to open the store the next morning. Despite paying wages of up to $12 an hour, Sun Shade has not been able to attract enough workers. And without Caviezel’s help, the store might be shuttered. Last month alone, the company reimbursed Caviezel $1,000 in hotel and gas bills.
As restaurants and retail firms scramble to find workers, Labor Secretary Alexis M. Herman said they should search in minority communities. September’s unemployment statistics showed that relatively high unemployment rates persisted among minorities--7.4% for Hispanics and 9.2% for blacks. The unemployment rate for black teenagers stood at a whopping 30%, Herman said.
“Here’s a potential talent pool we have to tap into,” Herman said.
Some executives say the huge demand for employees has changed the way firms recruit--and retain--workers.
At Wal-Mart, anyone who walks in the door and asks for a job now gets an interview on the spot, said Coleman Peterson, vice president of Wal-Mart’s human resources department.
Clerks “have a lot of options now,” Peterson said. “Some of them go to a mall and walk out with three job offers. If we don’t respond immediately, we may lose” a potential employee.
Some Wal-Mart stores now try to retain new workers by offering $100 gift certificates that they can redeem after three months on the job.
M.L. Smith, a professor at the University of Houston’s Conrad N. Hilton College of Hotel and Restaurant Management, said restaurants and retail firms are reeling because their labor pool is rapidly shrinking.
Other businesses, which are experiencing labor shortages of their own, are hiring away some of the teenagers, homemakers and low-skilled workers who are traditionally employed by restaurants and retail businesses.
And even though some eateries and retailers have begun to offer health insurance, 401(k) retirement plans and other benefits not usually found with such low-wage jobs, they are finding that they still cannot compete with businesses that pay more and offer more interesting work.
“These are kids that grew up on Nintendos and computers,” Smith said. “Why would they want to put catsup and mustard on a bun when they can tap away at a computer in an air-conditioned office?”
Many restaurants, especially those in Texas and California that often rely on illegal workers, are particularly suffering from the labor crunch. A recent crackdown by federal immigration officials has forced some employers to stop hiring illegal immigrants.
Recruiting From Competitors
Some employers have simply given up trying to find workers.
Ron Diamond, owner of Moorpark Pharmacy, said he stopped looking for a second part-time driver after no one responded to his newspaper ad.
Other employers are going where the workers are--at other workplaces.
Brian McDonough, a human resources manager for Marie Callender’s, patronizes competitors’ businesses to dangle jobs before their serving staff.
“Everybody is stealing from everybody else all the time,” said Len Dreyer, McDonough’s boss and Marie Callender’s chief executive. “We do it.”
Nakia Reese, an assistant manager with Nature’s Wonders at the Santa Monica Place mall, said she has received three job offers in three months from other store managers posing as customers.
“They look very disappointed when I tell them I’m not interested,” Reese said.
Myra Dimson, a Costa Mesa High School student who works part-time for Toys International at South Coast Plaza, said she too has been wooed.
One customer, who turned out to be a manager at the nearby Best Buy electronics store, offered to hire her on the spot because he liked her courteous and helpful manner, she said.
“It feels good to be needed,” Dimson said. “But school is my first priority. I don’t need to work many hours. I’m only 17.”
Stuart, the Marie Callender’s waitress, said she had expected to work in Houston for two weeks. A week into her stint, her boss in San Juan Capistrano telephoned to say she was needed at her old job.
Stuart left the same night for Orange County.
“It’s kind of crazy,” she said. “I’ve become a roving waitress.”
