Sandra Weise, owner of the Finnish Bistro in St. Paul, recently announced that she would begin closing 4.5 hours early every day because she can’t find enough workers to keep the doors open.
Even though she said her workers make between $22 and $28 per hour once tips are factored in, she hadn’t had an applicant in a month when she made the announcement. She said she could hire 10 people and uses disposable dishes and utensils because she doesn’t have the staff to wash dishes. Before the pandemic, she “never went a week without a dozen applicants,” she said.
The bistro’s business is booming, she said, up about 25% from 2019, but she’ll go back to April 2020 numbers by closing early.
“We literally are gonna have to close and ask people to leave,” she said.
Her full-time barista made $67,000 last year — more than Weise did.
“My full-time baristas have never made less than $18 an hour,” she said. “People think that it’s just like a garbage position.”
Her workers tell her some of their roommates and friends are choosing to draw unemployment benefits rather than go back to work, which frustrates Weise, who calls herself a liberal.
“I am pro-unemployment; I think it’s a great tool,” she said.
But she thinks it’s a big reason she can’t find workers anymore.
Republicans agree with her on an issue that is fast becoming a partisan litmus test: Whether it’s time to end the federal $300 weekly boost to help unemployed people weather the pandemic, as 21 states have done.
Democrats say people still need help and argue if employers really want to hire more people, they should raise their wages.
Paul Krugman, an economist and New York Times columnist, noted after the most recent jobs report that “if unemployment benefits were holding job growth back, you’d expect the worst performance in low-wage industries, where benefits are large relative to wages. The actual pattern was the reverse: big job gains in low-wage sectors like leisure and hospitality, job losses in high-wage sectors like professional services.”
This week Republican members of Minnesota’s congressional delegation called on Gov. Tim Walz to end the federal benefit to “get Minnesotans back to work.”
U.S. Reps. Jim Hagedorn, Tom Emmer and Pete Stauber and Michelle Fischbach said in a letter to Walz it’s time to “allow the economy to roar back to life.”
“Small businesses across Minnesota are desperately seeking workers but cannot compete with these federal payments,” they wrote. “It is time to get Minnesotans back to work by not paying them to stay home.”
On the heels of a disappointing April federal jobs report earlier this month, the Minnesota Department of Employment and Economic Development announced Thursday that state employers added 11,300 jobs last month, the fewest so far this year.
The state lost about 416,000 jobs “in the blink of an eye” during the early months of the pandemic, DEED Commissioner Steve Grove said. The Minnesota economy has regained 235,000 or about 57% of lost jobs. The battered leisure and hospitality industry gained just 3,100 new jobs last month, for a total of 88,000 gained back since the state lost 147,000 during the pandemic.
Minnesota lost a larger share of leisure and hospitality jobs than the U.S. in general, likely because the state had an aggressive plan to fight the coronavirus, Grove said.
Grove defended the Walz admnistration’s unemployment policy. Unlike some states, Minnesota never dropped a work search requirement. Grove said DEED is “ramping up” its engagement with people receiving benefits, calling them, offering job clinics and “trying to help them navigate this new economy.”
As for those who say the state is holding back workers with too-generous unemployment benefits, Grove said the issue is far more complex. Some parents are still struggling to find child care and transportation, and there are lingering concerns about COVID-19, with only about half of U.S. adults vaccinated. He said nobody’s getting rich off of unemployment — which pays people about half their previous salary — even with the federal bonus.
“Even if everyone got vaccinated today, things wouldn’t just snap back into place instantly,” Grove said. “I think if the pandemic taught us anything, it’s that some jobs, you have a long life, and others are more vulnerable.”
The state unemployment rate now stands at 4.1%, and weekly unemployment claims are trending downward, with about 10,000 fewer people applying for unemployment weekly, Grove said.
The manager of the Colossal Café just down the street from Weise’s bistro said he’s been in the restaurant business for more than 40 years, and has never had so much trouble finding workers.
Steve Stoffel said his café is closing earlier, working without a dish washer and can’t get any applicants for his jobs, which pay $15 to $20 an hour.
“We’re blaming it on the government giving out money and making it so people don’t wanna work,” he said. “Nobody’s looking for work; I just don’t get it.”
Joel DeBilzan, head chef and owner of The Kenwood in Minneapolis, survived the shutdown by “putting the best darn food in a box that you could” and said business began booming as people got vaccinated and came out of hibernation.
But he’s struggling to find cooks and can’t open for brunch or lunch until he gets a full crew.
“It’s not like restaurants are making a crazy amount of money right now but this summer is gonna be poppin’,” he said. “It’s the busiest it’s ever been. Oh my gosh, it’s just insane every single day.”
Ben Wogsland, spokesman for Hospitality Minnesota, said finding workers is the industry’s biggest problem. He said the hotel and restaurant industry was having trouble finding workers before the pandemic, with estimates that it needed to add up to 25,000 jobs to meet demand.
“We believe a significant portion of workers may have made lateral moves to other industries to be able to keep food on the table and keep an income coming in,” Wogsland said. “The unemployment with the federal kicker is probably playing some role in that as well.”
He said other states are offering signing bonuses rather than the federal unemployment boost; a Minnesota bill proposed a $2,000 signing bonus for people who go back to work before July.
“The demand is really pent up among Minnesotans,” Wogsland said of customers. “They’re hungry and thirsty to get back.”
Weise is skeptical that people are really looking for work, even though they have to check a box saying they are looking for work in order to get benefits. “People have learned to hustle it,” she said.
“I’m down a half a million dollars,” Weise said. “That is my life savings. That is everything I’ve worked for. … Rain, sleet, snow, even COVID didn’t close my business. But unemployment did.”