Fast food customers are back, but workers are not. This triggers a major change.
Fast food restaurants have a problem: customers come back but not employees.
And, more and more, their dining rooms either.
A workforce squeeze is transforming an industry that has been an enduring and at times controversial symbol of American capitalism. For many fast food workers, the coronavirus pandemic has opened up new, better-paying alternatives to the demands of hot grills and deep fryers. And a resurgent virus, fueled by the delta variant, has compounded staff shortages, forcing many store managers to cancel recent dining room reopens or extend closures that took effect at the start of the pandemic.
“We cannot continue at the rate at which we are,” wrote a Chick-fil-A franchisee in Bessemer, Alabama, in a Facebook post in late August. “Our team members are exhausted and we have no relief for them on our current roster.”
The Bessemer location is one of at least a dozen Chick-fil-A outlets in the state that were only accessible by car in early September, according to managers and representatives of the customer service. Others have joined them, notably in Greenville, Texas, and Aberdeen, Maryland.
Some McDonald’s outlets have also switched to drive-thru-only and reduced hours, as the chain showcases sophisticated online ordering tools and invests in technology designed to facilitate the drive-thru and drive-thru experience. . Yum Brands, which operates KFC, Pizza Hut and Taco Bell, looked into services that minimize contact between workers and customers, including curb pickup and, in some cases, delivery.
The Big Mac maker, which temporarily cut most indoor dining at the start of the pandemic, said in late July it was on track to open nearly all of its dining rooms here. Labor Day, unless there is a resurgence of the coronavirus. But a month later, Reuters, citing internal company documents, reported that McDonald’s was advising franchisees when to consider closing dining rooms in areas hard hit by the Delta variant.
Of the nearly 10 million job openings in the United States, about 1 in 6 are in the recreation and hospitality industry which includes restaurant workers, according to data kept by the Federal Bank of St. Louis reserve. This represents 1,734,000 openings against about 1,475,000 unemployed, according to data from the Fed.
In order for the industry to meet customer demand, restaurants would likely have to attract workers from other industries, but the opposite appears to be true. Analysis of job seekers’ search history data by company review site Glassdoor found that people who previously searched for “restaurant waiter” are now more likely to type “office assistant” , “Data entry” or “Amazon”, for example. .
Salaries at fast food restaurants are historically lower than those at other service industry jobs, with the typical American worker earning about $ 11.80 per hour or $ 24,540 per year as of May 2020, according to the Bureau of Labor Statistics. A retail salesperson, by comparison, was making $ 30,940 per year. But even the biggest of them are pushing harder to attract workers: Walmart, Target and Amazon, for example, have all announced full college tuition programs for employees in recent weeks.
Some current and former fast food workers say labor shortages simply reflect the limited appeal of low-wage work which can be physically demanding and stressful, conditions that existed long before the pandemic. The labor group known as Fight for $ 15 has grown into a global movement in over 300 cities since its formation in 2012. And some economists question the correctness of the term “labor shortage” in this context. , claiming that companies are simply paying too low a salary. salary for one hour of work.
“When I’m going to buy an Audi and can’t afford it, I can’t declare an Audi shortage,” said Erica Groshen, labor economist at Cornell University. “At the salary offered, companies still do not receive as many candidates for work. “
Cristian Cardona, a 22-year-old former McDonald’s swing manager in Florida, said he had heard criticism that the shortages were fueled by high unemployment benefits – including the $ 300 per week in aid that supplemented state benefits – during the pandemic, even laziness.
“I think the problem is that workers are paid too little for working full time. This is the real scandal, ”he said.
Cardona said he decided to quit McDonald’s this year because $ 11 an hour was not worth it. Although his salary was increased by $ 13 before he left, he said, it did not match the responsibilities of supervising three or more people – about a dozen during the busiest shifts – at a time. He now works at a theme park in Orlando. He’s also affiliated with Fight for $ 15.
Workers see the lack of a living wage, Cardona said, and ask, “Do I want to be broke? Or do I want to be broke working 40 hours a week and working my whole life? ‘ “
Responding to Cardona’s comments, a company spokesperson said, “We are proud of the McDonald’s restaurant team who have grown stronger and made a difference in our communities in these extraordinary times, and we have sought to prioritize our restaurant employees at all times with actions that make a difference.
Government data suggests the industry as a whole appears to be raising wages. Unsupervised workers in the accommodation and food industry earned an average of $ 15.91 an hour in August, according to the Bureau of Labor Statistics. In February 2020, they were making an average of $ 14.46 per hour.
“The fact that nominal wages have grown so rapidly over the past few months is in itself pretty strong evidence that companies are really doing a lot to attract and retain workers. . . the job market is really very competitive, ”said Michael Strain, economist at the American Enterprise Institute conservative.
In May, McDonald’s announced it had increased its hourly rate to a range of $ 11 to $ 17 for entry-level workers and $ 15 to $ 20 for managers. Also in May, fast-casual chain Chipotle announced that it had increased its average wage to around $ 15 an hour. Taco Bell, meanwhile, used hiring teams to attract staff, as well as increased benefits with paid time off, free family meals and more employee development opportunities, said the chief financial officer of Yum Brands, Chris Turner, on a July results call.
A spokesperson for Chick-fil-A said in a statement that store decisions about hiring and salaries are handled by franchise owners, who operate independently under the brand. Some choose to increase wages in response to local hiring conditions; one of the company’s sites in Hendersonville, NC, recently increased its starting hourly wage to $ 19, for example.
For many fast food outlets, the pandemic has accelerated the trend towards online and app-based orders, as well as drive-thru technology.
At Yum Brands, revenue soared 34% to $ 1.6 billion in the most recent quarter – a momentum that CEO David Gibbs said was supported by digital investments from the based company. in Louisville and its “ability to serve customers through multiple channels on and off site.” . In an earnings call on July 29, he noted that digital sales, including online orders for pickup and delivery, were up 35% year-over-year. , about 1% of its KFC stores and 2% of its Pizza Hut stores were temporarily closed in late June, according to its earnings report.
McDonald’s also posted strong gains in the second quarter, driven by growth in its delivery and digital platforms and higher menu prices. Sales in the United States were 25.9% higher than the same period in 2020 and 14.9% higher than before the 2019 pandemic, the company said.
The average cost to close a restaurant to improve or add advanced drive-thru ranges from $ 125,000 to $ 250,000, according to Aaron Allen, founder and CEO of restaurant consulting firm Aaron Allen & Associates. But he said stores can quickly recoup the investment by increasing sales, removing bottlenecks and ultimately increasing profitability.
Allen estimates that drive-thru accounts for about half of the annual sales of all fast food outlets and fast food outlets, or about $ 169 billion.
“One of the other things they’ve done is turn all of us into cashiers,” he said, pointing to restaurant apps and touchscreen kiosks that have replaced some restaurant workers. “We did a study on automation and robotics and found that at least half could be replaced by robots or automation. “
But part of the work disruption also stems from the way employees were treated in restaurants, he said, and the attractiveness of the concert economy, which offers more flexible hours and does not force workers to work in front of a hot grill.
While the big national chains seem to be mainly reducing their services, some are closing their sites indefinitely.
Dutch Girl Donuts, a donut bakery in Detroit, told customers it will be closing temporarily on September 1 “in an effort to resume full staff and hours.”
Online commentators have been imploring the store to reopen. “I don’t even live in Detroit anymore, but I’m going to go home to take a shift now. I don’t even need the money, just pay me in donuts ”one person wrote
“Need to pay more dough!” Another wrote.