Restaurant owners are lashing out at President Biden for telling them they have to raise wages in order to attract staff, a move they say will drive inflation, put them out of business and shows how little he understands about the country’s labor crisis.
At a town hall in Cincinnati on Wednesday night, President Biden was asked by restaurant owner John Lanni what his administration was going to do to end the staff shortages. He replied by telling Lanni that he should increase wages and that the reason restaurants were struggling to hire people was that workers were considering ‘different opportunities’.
But restaurant owners in New York City, where the minimum wage is already $15, say the President – who has never run a business – is detached from reality.
They say the only way to bring restaurant staff back is to get rid of the high unemployment payments keeping them at home.
If they are forced to increase wages to attract staff, they say they have no choice but to increase the prices on their menus too. It’ll put customers off and eventually, put them out of business.
Republican lawmakers slammed Biden’s remarks as ‘patronizing’ and ‘out of touch’ on Thursday and said he created the shortages by paying people too much to stay at home.
John Stratidis, the manager of the Cozy Soup N Burger diner in Manhattan’s Greenwich Village, told DailyMail.com on Thursday that raising wages would punish consumers and eventually put people off dining out.
‘When minimum wage goes up, who do you think is going to pay for that? The customer. Everything is going to go up just to be able to stay in business. When we give more money, the prices go up and when the prices go up who’s going to pay for that?
‘They’re going to be crying about it, and saying “it’s too expensive”. That’s inflation. You’re going to be walking in somewhere to eat something and paying $40 or $50 for a hamburger.’
John Stratidis, the manager of the Cozy Soup N Burger diner in Manhattan’s Greenwich Village, told DailyMail.com on Thursday that raising wages would punish consumers and eventually put people off dining out. ‘You’re going to be walking in somewhere to eat something and paying$40 or $50 for a hamburger,’ he said
Stratidis hasn’t been able to hire back most of the staff he let go in COVID. On Thursday it was just him, one other server and three chefs in the diner which has dozens of covers
‘We need to get back to reality. A lot of people are in this bubble… the longer we stay closed, the bigger this becomes. We’re already in trouble.
‘If we don’t get back to work and get the ball running, we’re going to be in trouble.’
When COVID started, Stratidis said he had to let go of all of his staff. On Thursday, there were five workers there – three chefs, one other front-of-house server and him.
He says he still can’t afford to bring any more staff back, and that competing with generous unemployment makes it even harder. The only solution he sees is to cut the unemployment benefits that are keeping people at home.
‘When minimum wage goes up, who do you think is going to pay for that? The customer…You’re going to be walking in somewhere to eat something and paying $40 or $50 for a hamburger.’
John Stratidis, the manager of the Cozy Soup N Burger diner in Manhattan’s Greenwich Village
‘Everyone is chilling right now, collecting $1,200 in unemployment benefits. What happens when those stop in September? When unemployment stops, poverty starts. If there are no restaurants, where are you going to work?’
Robert Mahon, owner of Broadstone, Toro Loco and Amor Loco, in New York City, said Biden must also replenish the Restaurant Revitalization Fund, which allotted $20billion to 100,000 restaurants. Republican lawmakers are pushing for an additional $60billion to be added to it.
‘If Joe wants to help out the restaurant industry he must replenish the Restaurant Revitalization Fund and cut unemployment benefits now.
‘The quicker this is done the industry will have path to normal capacity. Right now there is no clear path and the future remains uncertain from an operational stand point.
‘Inflation caused by supply chain issues – not stimulus programs – is having inflation spiked on goods and services. In addition, restaurants have to deal with wage inflation which could be put under control today if the unemployment is cut.
‘Restaurants have endured enough especially in Democratic states since March 2020. No wonder the the mass exodus of residents continues to Republican states.’
Erika Palomar, Executive Director of the Independent Restaurant Coalition, told DailyMail.com the government must play a role in the survival of restaurants.
John Lanni, the co-owner of a restaurant group that has 39 venues across the country, on Wednesday night asked Joe Biden what the president could do to try and help him find more staff for his restaurants. Biden replied that wages needed to go up
‘Neighborhood restaurants and bars have lost revenue for 16 months and will be hurting for many more. Many of these small businesses do not have the financial stability or resources to bring back their employees and keep them on the payroll.
‘That’s exactly why the Biden administration and Congress must work together to refill the Restaurant Revitalization Fund and ensure every restaurant and bar on the brink of closure has a chance at survival,’ she said.
In 2020, the weekly average COVID unemployment check tripled to more than $900. It has now come down to about $600 which is still $300 more a week than in the past.
Twenty-six states have ended the payments because they say they’re deterring people from working. Biden has vowed to end them entirely in September.
Republican lawmakers say Biden’s remarks prove how ‘out of touch’ he is.
‘President Biden’s patronizing response to this struggling restaurant owner proves how out of touch he really is,’ the House Committee on Small Business Republicans tweeted.
‘POTUS’ response to this struggling restaurateur shows a blatant disregard for the policies he has signed that have created this issue,’ Republican Rep. Byron Donalds tweeted.
Lanni, who says he already pays staff $15-an-hour, said: ‘The entire industry, amongst other industries, continues to struggle to find employees. How do you and the Biden administration plan to incentivize those that haven’t returned to work yet? Hiring is our top priority right now.’
In response, Biden seemed to wipe his hands of the issue, claiming the shortage wasn’t down to increased benefits but people no longer wanting to work in restaurants.
Even if his benefits contributed to the problem, he said they were ending soon.
‘My gut tells me that… there’s a lot of people looking to change their occupation. But I could be wrong. I think it really is a matter of people deciding now that they have opportunities to do other things and there’s a shortage of employees. People are looking to make more money and to bargain.
‘I think your business and the tourist business is really going to be in a bind for a little while. People being seven, $8 an hour plus tips, that’s – I think, John, you’re going to be finding 15 bucks an hour or more now,’ he said.
He then even conceded that the expanded benefits might have contributed to the shortage but said ‘they’re ending now’.
‘Let’s assume it did, but it’s coming to an end,’ the President said.
The Labor Department said Thursday that jobless claims increased last week to 419,000, the most in two months, from 368,000 the previous week. This chart shows how unemployment claims have dropped from March 2020. They have increased to the highest number in two months – more than 419,000 – despite businesses reopening
Lanni said later Biden ‘didn’t answer the question’ and other restaurant owners said the response showed the President does not understand the labor crisis unfolding across his country.
Restaurants say they are still struggling after 18 months of closures due to COVID-19. While their laid-off staff were able to claim benefits, they weren’t.
I don’t know that he fully understands the challenges we are facing. ‘If we cannot find workers, restaurants cannot survive
Jean-Francois Flechet, restaurant owner in Cincinnati
The Restaurant Revitalization Fund awarded $20billion in grants to 100,000 restaurants but many say more money is needed. Many of the payments have also been halted due to a lawsuit against the Small Business Association which alleges the money was being unfairly given out because it women and minority applicants were given first priority.
Biden, in his response to Lanni at the townhall, said: ‘If you notice, we kept you open.
‘We spent billions of dollars to make sure restaurants could stay open and a lot of people who now work as waiters, waitresses decided that they don’t want to do that anymore because there was other opportunities at higher wages because there was a lot of openings now in jobs and people are beginning to move.
‘There’s some evidence that maintaining the ability to continue to not have your – have to pay your rent so you don’t get thrown out and being able to provide for unemployment insurance – has kept people from going back to work. There’s not much distinction between not going back to work in a restaurant and not going back to work at a factory.
26 states have ended Biden’s expanded unemployment benefits early because they were stopping people from going to work. They are now seeing an increase in the number of people who are applying for work again
‘So people are looking to change opportunities, change what they’re doing.’
‘All kidding aside, I think it really is a matter of people deciding now that they have opportunities to do other things and there’s a shortage of employees, people are looking to make more money and to bargain.
‘So I think your business and the tourist business is really going to be in a bind for a little while. We’re ending all of those things keeping people from going back to work, et cetera. It will be interesting to see what happens, but my gut tells me, my gut tells me that part of it relates to, you know, you can make a good salary as a waiter or waitress.
‘But there’s a lot of people who are looking to change their occupation. I could be wrong.’
Pressed on what he could do to help Lanni, the president said that the government had implemented programs to keep businesses running.
‘John, first of all, the thing we did to help John and the Johns out is provide billions of dollars to make sure they could stay open, number one,’ Biden said.
‘So you all contributed to making sure John could stay in business. And we should. We should have done that, as we did for other industries. But secondly, John, my guess is that people being seven, $8 an hour plus tips, that’s – I think, John, you’re going to be finding 15 bucks an hour or more now.
‘But you may pay that already. You may pay that already.’
Lanni and another Cincinnati restaurant owner, Jean-Francois Flechet, later told The Cincinnati Enquirer that they already pay staff more than $15-an-hour and that Biden doesn’t understand the issue.
‘We are in a labor crisis and we need to find a way to incentivize people to get back to work. I just heard restaurants are going to have a hard road going forward and that we need to pay our workers more. That’s happening and it’s still not enough,’ he told The Cincinnati Enquirer.
Taste of Belgium owner Flechet added: ‘I understand where the president was going; everyone deserves a living wage; But he was mixing answers. This wasn’t about living wages. Anybody who works Thunderdome or Taste of Belgium make more than $15 an hour. I don’t know that he fully understands the challenges we are facing.’If we cannot find workers, restaurants cannot survive,’ he said.
U.S. states putting an early end to federal unemployment benefits saw a larger jump in local labor supply in June – above people line up outside a newly reopened career center for in-person appointments in Louisville
A ‘Now Hiring’ sign advertising jobs at a hand car wash is seen along a street in Miami, Florida in 202
Some economists argue the federal benefit remains an economic lifeline, that many jobless Americans want to return to work but aren’t able to because they can’t access child care or remain fearful of contracting COVID-19.
But many of the states decided to end the benefits after some business owners complained of being unable to fill jobs.
Workers in Indiana, Maryland, Texas and Ohio sued their states for ending jobless benefits early.
Judges in Maryland and Indiana made decisions to temporarily reinstate federal benefits.
Biden appeared to accept that the additional unemployment payments may have discouraged people from working.
State-level jobs data released earlier this month show that in the 26 states stopping benefits early an additional 174,000 people joined the labor force in June, by either taking jobs or beginning work searches, compared to 47,000 in the other states.
The numbers are small in a national labor force of 161 million and come with a cautionary note: Job gains in both groups of states were roughly the same.
The CNN town hall seemed to draw a meagre crowd for Biden, with photos from journalists showing row upon row of empty seats.
Donald Trump, who held large rallies through much of the pandemic, frequently taunted Biden for small crowds, which Biden on the campaign trail made a deliberate policy to avoid the spread of COVID-19.
It is unclear if the room was half-full due to concerns about the virus or due to a lack of public interest. A White House official referred an inquiry to CNN.
CNN spokeswoman Lauren Pratapas told The New York Post: ‘This was a typical audience size for a CNN town hall.’