Lack of workers causes crisis at South Florida restaurants

JUPITER, Fla. — In a growing regional trend, a lack of workers is causing logistical problems for South Florida businesses, and the sectors hardest hit in Palm Beach County are restaurants and hotels.

No Workers, No Service

WPTV NewsChannel 5 talked to frustrated business owners all over South Florida, and they are all dealing with the same crippling business issue.

"People aren't coming in and applying," said Angelo Abbenante, owner of four Lynora's restaurants. "We have openings right now at all of our locations."

"We've been hiring for a week and we've had three people come in and say, 'You know, I'd like to work here,'" said Rocco Mangel.

Both restaurateurs are frustrated and reaching a tipping point because they don't have the staff to provide their guests quality service. They along with other small business owners think they know why.

"When people tell you they want to work? No, they want to sit at home and collect unemployment," said Randy Singer from Boca Black Box Theater.

"Lot of these folks are making as much money to stay home than they would be to come to work," said John Reisigl, president of Cheney Brothers.

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"I feel like we are competing against unemployment on some level," said Jodi Cross, regional director for the Florida Restaurant and Lodging Association, which is based in Jupiter.

It's a competition, they believe, they can't win right now.

"The government is paying people to stay home, and when you pay people to stay home, you know, this is the consequences," said Abbenante.

"People have a paid vacation until unemployment runs out," said Mangel.

"You may have 10 people accept an interview and nobody show up," said Mark DeAtley, managing partner of Scusi Trattoria in Palm Beach Gardens.

"It's something I've never seen before," said Abbenante.

No Help Available

"You'll go days and not even one application comes in. Because half the workforce is lazy. Half the workforce doesn't want to work," said Michelle Lefkowitz, owner of Salute Market.

That may sound harsh, but Lefkowitz is at the end of her rope.

"When you need the right people for your team to grow and you can't find them because no one wants to work -- you're talking about a front-of-house manager, a lead hostess, a line cook and a prep cook," said Lefkowitz.

That's about $200,000 in salaries she is looking to fill.

"Yeah, those four positions we are hiring for right now and we can't get qualified applicants that want to work," Lefkowitz said.

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Lefkowitz added that other businesses are offering cash incentives to attract employees to join the workforce like signing bonuses.

"I don't want to have to motivate somebody to get off their couch to come to work," said Lefkowitz, adding that the workers she does have are putting in overtime. "Our kitchen has been putting in 70 hours a week. We have to pay overtime. We have no choice."

Lefkowitz said she was able to reward her hardest-working employees.

"We were actually able to give raises to our top three people in our kitchen this quarter. They helped see us through a very difficult time," Lefkowitz said.

Fire and Water Damage

Rocco's Tacos is experiencing a "difficult time" right down the road with only a few applicants knocking on his door.

"We are having a very hard time finding help," said Mangel.

Mangel's Palm Beach Gardens location wants to reopen from fire damage is suffered last November. Appropriately, he wants to open by Cinco de Mayo.

"I'm hoping we get enough people to come in and apply by then, but we don't know," said Mangel.

Mangel needs more than 50 employees. While some are working at his other locations, others say, "I'm waiting for unemployment to run out and I'm going to come back. And we're going to welcome them back," said Mangel.

WPTV contacted Rocco's Tacos on Monday to see if it was going to be open by Cinco de Mayo, but the restaurant is not going to be able to open the Palm Beach Gardens location.

Are Unemployment Benefits to Blame?

In an alarmingly growing trend, a lack of workers is causing logistical problems for South Florida businesses. But what or who is to blame?

"[Unemployment benefits] are certainly a factor. And it's a factor across the bar in all of our employment sectors, but it seems to be particularly so in leisure and hospitality right now," said Tom Veenstra, spokesman for CareerSource Palm Beach County.

Discover the Palm Beaches, the county's tourism arm, said total leisure and hospitality jobs are typically about 100,000 for Palm Beach County. When the coronavirus pandemic began, those dropped to 49,200. In March, those numbers grew to 81,500.

"We're moving in the right direction," said Veenstra. "Palm Beach County is doing better than the state and the nation. It was really encouraging [Friday, April 16] to find out that 88% of the number of jobs lost since COVID began have been recovered."

But with the job availability rebounding, why aren't people applying for them?

Right now, workers can claim $275 a week from the state of Florida and $300 from the federal government. That's $575 in weekly unemployment benefits.

"And yes, they are making more money staying at home, and then stimulus check upon stimulus check upon stimulus check," said state Rep. Dana Trabulsy, R-Port St. Lucie. "And so, yes, it's discouraging people from engaging in the workforce. It's unfortunate."

In a growing trend, many South Florida restaurants told WPTV there are jobs, but business owners said there aren't the people to fill them.

Randy Singer runs three entertainment venues in Boca Raton, Lake Park and Port St. Lucie.

"We were able to post an ad on our sources and we'd have 50 to 100 applications in two days. I'm lucky now to get one application," said Singer.

WPTV asked food distributor Cheney Brothers, based in Riviera Beach, if they feel like they compete with the government for employees.

"I could have not said it better. That's exactly who we are competing with," said Reisigl. "We should be competing with our fellow distributors. Restaurants should be competing against other restaurateurs. But right now we are all competing with the U.S. government, and that's a tough battle to win."

"How does a small business compete with someone who can print money? You can't compete," said Jason Emmet of Sundae House in Delray Beach.

WPTV contacted Florida's government leaders about the unemployment check issues the restaurant industry is reporting.

“When visiting small businesses throughout Florida last week, I saw firsthand the businesses and jobs that were saved by the Paycheck Protection Program. I also heard the challenges facing many employers as we rebound from the COVID-19 pandemic. One of the biggest concerns is finding enough workers. While Florida’s economy is booming in comparison to other states in the country, there is a real concern that some federal emergency programs are unintentionally keeping people out of the workforce. Our state is on the cusp of fully re-opening our economy, and we need to make certain that the federal government does not limit our ability to bounce back through continued bad policy choices.”

U.S. Sen. Marco Rubio

“Small businesses are the backbone of our economy, and the COVID-19 pandemic has hit them hard. Workers have also been devastated by this economic crisis, and my office has heard from countless Floridians who are struggling to provide for their families. Simply put, unemployment benefits just don’t compare to a good-paying job. Workers are afraid for their lives and the lives of their loved ones, many are unable to find or pay for child care, and with some customers refusing to wear masks or adhere to social distancing requirements, some feel forced to stay home. That being said, the American Rescue Plan does provide additional resources for small business owners through PPP and EIDL loan opportunities, as well as a new grant program specifically for restaurants, which will be available in the coming weeks, so I would encourage any employer who is struggling to visit sba.gov to learn more about the resources available to them to help them stay afloat.”

U.S. Rep. Lois Frankel, D-Fla.

“Throughout this pandemic, [I've] focus has been keeping families healthy and supporting the families and businesses that have been hurting and struggling to keep their doors open. He is opposed to policies that harm or slow economic recovery, which is why he offered an amendment to the CARES Act last year to prevent Unemployment Insurance benefits from exceeding a worker’s previous salary. [I continue] to oppose the use of American taxpayer dollars to pay people more to not work than they would receive if they were back on the job.

“As our economy works to fully reopen, and with the COVID-19 vaccine being distributed, [I] will continue to work with families and small businesses to ensure they have the resources and support they need to succeed.”

U.S. Sen. Rick Scott

But state Sen. Tina Scott Polsky, D-Boca Raton, said not so fast. There was a shortage of low-wage workers before the pandemic.

"Before the pandemic, there was a bit of an over employment situation," said Polsky. "There were a lot of, sort of, lower-paying jobs that were having trouble being filled. I think [restaurants] need to offer proper wages. You know, we have this $15 an hour wage coming up."

The wage increase is coming up in 2026, but not soon enough to solve an immediate problem that Mark DeAtley, who is a managing partner at a Palm Beach Gardens restaurant, said has been around for a while.

"Prior to the pandemic, I think we were pushing it. We were kind of at the limit, starting to feel it," said DeAtley. "And since the pandemic, a lot of people haven't come back. A lot of staff that has not come back has found alternative sources of supporting themselves. And it's kind of a shame because the demand is there right now."

"It really does worry me that we are going to have to change the way we do things just to keep up with the higher labor costs," said Victoria Parmelee, owner of Jumby Bay in Jupiter. "Right now we are paying higher prices for food, liquor, beer, everything. The prices [have] gone up, even to-go containers. I'm definitely
feeling the pinch and I've had other restaurateurs say, 'Hey, we're having to raise our prices on our menu.'"

The Florida Restaurant and Lodging Association said other factors are keeping candidates away.

"They just didn't want to work nights, for example, or they didn't have child care, for example," said Cross. "It's also the cost of housing here in Palm Beach County."

In a committee meeting with Sen. Rick Scott, R-Fla., the Florida Restaurant and Lodging Association wants to return to a system where people on unemployment need to show they are looking for work.

Carol Dover, president and CEO of the Florida Restaurant and Lodging Association, said in Senate testimony, "There are so many jobs available right now that if we could go back to a system where you used to have to show that you've applied but turned down."

The Cost of Recruitment

"A lot of employers are sweetening the pot by offering increased pay, signing bonuses and referral fees and things like that," said Veenstra.

Employers changing their own rules to get people to sign up, like 401ks, health insurance and paid vacations.

"We're starting off with the benefits immediately," said Abbenante.

"The market is causing the [wages] to go up, and that's a good thing," said Polsky.

It's a risky situation for Abbenante, who owns four Lynora's locations with plans to expand opening new locations at Uptown Boca and in Fort Lauderdale. "We're taking a chance going to the South end, where we are new."

"I know a couple of operators that are opening places and they have to push the opening by a couple of weeks just because they couldn't find employees," said Cross.

"It's very, very scary," said Abbenante. "Wages have gone up in the last few months."

Restaurants are paying time-and-a-half, increasing wages, adding more benefits and worker's compensation, all of which is pushing costs for restaurants from the normal 25-35% labor cost range they like to maintain.

"You'll start to get up into that 40%, once you start getting into those numbers, [you're] breaking even at the point," said Abbenante.

Abbenante even has some employees based in West Palm Beach without vehicles. He is transporting to Palm Beach Gardens.

"I'm actually paying for their Ubers," said Abbenante.

The Burnout Factor

Restaurants said their staffs are feeling the strain and relief is much needed.

"I think some people go out to eat and they see empty tables and think, 'Oh, they're not busy,'" said DeAtley. "They don't realize the proverbial duck paddling underneath the water. The feet are going as fast as they can and restaurants are really working hard and the staff is there is working extremely hard under a difficult situation."

"Be patient when you're going out to eat," said Reisigl. "These restaurateurs didn't forget how to run their restaurants overnight. But they are struggling with staff. The staff they do have is very tired and very overworked."

"And it may be your server didn't forget to put your order in. It may be there aren't enough people in the kitchen to cook the food," said DeAtley.

"I've had my staff cry more [in the] first quarter of 2021 than in five years because people can just be mean," said Lefkowitz.

"They are closing off day parts and they are closing days of the week," said Cross. "Like, they may want to open Sunday for brunch, but they are unable to. The employees that they have are willing to work the extra shifts and extra hours, but they also don't want to burn them out."

Ignoring the Long-Term

CareerSource Palm Beach County is advising potential workers to jump on getting a job now.

"Don't take the short view of collecting jobless assistance," said Veenstra. "Hey man, now's the time. This is the best time in more than a year to get out there, get the job you want at the pay you want. And you'll be at the head of the line."

"It's definitely an employee market," said Cross.

"I don't think [workers on unemployment] are looking at the long-term picture of what it means to have a job with full benefits and 401k and everything else," said Reisigl. "You know, their needs are being taken care of with the money they are getting from the government right now."

On Monday, May 10, CareerSource Palm Beach County is creating a virtual platform for the free event allowing employers and candidates to meet online. Click here to sign up.

Participating Businesses:

• 1000 NORTH
• BEACON
• The Cooper
• Fit2Run
• Lucky Shuck
• Rocco’s Tacos
• Spoto’s Oyster Bar
• The Tacklebox
• Topside
• Tory Burch
• Williams-Sonoma