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Expiring unemployment money could push Dallas restaurant worker to ‘seek out work that really isn’t safe’

Restaurant owners are also worried. 'We’ve been on a hiring spree for months now and we’re not getting people wanting to work,' says one operator.

An effort to extend unemployment benefits failed in the Senate Thursday, leaving many in the struggling restaurant industry worried as weekly federal aid payments expire Friday.

Senate Majority Leader Mitch McConnell (R-KY) is swarmed by reporters as he leaves the Senate floor and walks to his office at the U.S. Capitol on July 30, 2020 in Washington, DC. Republicans and Democrats in the Senate remain in a stalemate as the the $600-per-week federal unemployment benefit in place due to the coronavirus pandemic is set to expire on Friday.
Senate Majority Leader Mitch McConnell (R-KY) is swarmed by reporters as he leaves the Senate floor and walks to his office at the U.S. Capitol on July 30, 2020 in Washington, DC. Republicans and Democrats in the Senate remain in a stalemate as the the $600-per-week federal unemployment benefit in place due to the coronavirus pandemic is set to expire on Friday. (Drew Angerer / Getty Images)

Unemployment benefits have become a hot-button topic in the restaurant industry: Some employers say generous government payments in addition to state benefits de-incentivize workers from going back to their jobs, while some restaurant workers say the payments are financial lifelines that help them pay their bills — and in some cases allow them to stay home to protect themselves or those in their lives who are high-risk.

As the $600-per-week unemployment payments expire, many restaurant workers are trying to figure out what to do next. The industry continues to be one of the hardest hit by the pandemic; the Texas Restaurant Association suggests that more than 25% of Texas’ restaurants will fail.

When unemployment doesn’t add up

With Congress at an impasse over federal unemployment benefits, jobless Texans will not receive aid beyond what the state offers, which ranges from $69 to $521 per week. Some restaurant workers like Steven Danby say state benefits alone aren’t enough to live on.

Danby, who has worked in the restaurant industry for 18 years, was laid off from his job as general manager of Sprezza in June. He filed for unemployment and relies on the money he receives through state and federal unemployment benefits to cover his living expenses. Losing a portion of those funds will eventually require him to make difficult decisions between which bills he can pay and which ones he can’t, he said.

“I see people say, ‘Why don’t you go to work?’ But there really aren’t that many jobs to take,” he said. “This is the first time in my life I’ve gone without work, and you hear people place judgement on people who’ve collected unemployment. What are you supposed to do when what you’re good at is void?”

Since losing his job, Danby has applied for several Dallas-area jobs that fit his skill set, but he said the options are limited and the restaurants that are taking applications for management positions seem to be holding off on filling them until things stabilize.

The Dallas market has more job-seeking managers than available manager jobs, he said, which means landing a gig right now requires luck and willingness to take a significant pay cut.

Since March, the Texas restaurant industry has lost hundreds of thousands of jobs as restaurants shutter either temporarily or permanently, according to data from the Texas Restaurant Association. And the unemployment rate in the industry is expected to rise as more restaurants close permanently due to insurmountable operating costs and fewer customers.

Some restaurant workers feel unsafe

Ivy Vance is receiving unemployment not because her waitressing job is no longer available but because she fears she could contract the virus while on the job. She wouldn’t disclose what restaurant she worked at out of fear of jeopardizing her job there but said it is a fine-dining restaurant in Dallas.

Vance applied for unemployment when she was furloughed in March and is choosing to stay furloughed until she feels it is safe to be in a restaurant again.

“We all agree that we want to be safe and return to work safely, but a lot of us feel that we can’t do that right now,” she said. “With dining service, it’s different than working at a grocery store. You don’t have to interact with people who aren’t wearing face masks.”

It also wouldn’t be financially beneficial to return to her waitressing job right now with dining rooms limited to 50% capacity and dine-in business in decline, she said. She estimates that she would likely make a quarter less than her typical take-home pay.

Vance organized a small demonstration of local restaurant workers last week to hold banners along U.S. Highway 75 and petition for an extension of federal unemployment benefits. She said they wanted to vocalize that they work in an already precarious industry and that unemployment benefits are critical.

“I’m so anxious about them not extending [unemployment benefits] because that money needs to go toward my rent, bills and groceries,” she said. “If there’s not an extension, I’m afraid what it’s going to do is force people like us to go seek out work that really isn’t safe yet.”

What restaurant operators say

Dallas Hale, CEO of Shell Shack, Sushi Marquee and Ebb & Flow, has seen the downside to the federal unemployment benefits. Across all his restaurants, Hale said staffing levels are down 30%, despite an increase in business due to takeout sales and higher tips from customers.

“We have had a very hard time staffing during these times. We’ve been on a hiring spree for months now and we’re not getting people wanting to work,” he said. “I personally gather that people are taking advantage of the situation and that people have sat here and realized that they are making a healthy paycheck by not having to do a whole lot.”

The co-owner of Tacodeli says the taco chain hasn't had much trouble bringing staffers back. But other restaurateurs say the additional $600 a week that unemployed workers received de-incentivized them to return to their jobs.
The co-owner of Tacodeli says the taco chain hasn't had much trouble bringing staffers back. But other restaurateurs say the additional $600 a week that unemployed workers received de-incentivized them to return to their jobs.(Jae S. Lee / Staff Photographer)

Hale said not everyone receiving unemployment benefits is taking advantage of the system and he knows there are people receiving money who are unable to find work or face health issues that require them to stay home, but he believes the federal benefits should be restructured to prevent workers from being more incentivized to stay unemployed.

The issue isn’t as straightforward as it seems, though, said Eric Wilkerson, co-owner of Tacodeli.

The taco chain experienced a dip in staffing levels in April when workers seemed to be nervous to go back to work, Wilkerson said, but since then the company hasn’t had much of an issue with hiring people back.

He thinks some of the reasons why Tacodeli hasn’t had difficulties with staffing might be that the company tries to keep wages competitive, they don’t follow the pay structure of dine-in restaurants where servers rely on tips for most of their pay, and their business is mostly takeout. Employees in dine-in restaurants may be less inclined to go back to work in environments where they are making less money in tips and working in close proximity with the public, he said.

The concern that an additional $600 a week from the federal government could deter people from going back to work is a legitimate one, Wilkerson said, but he doesn’t think it is as big of an issue in the restaurant industry as some people believe it is.

“You can see how some people might say that they really like making that money and not having to go back to work, but we really haven’t seen many cases of that,” he said. “I also understand that in the end people are spending that [federal unemployment] money and so there’s an economic stimulus component to it as well.”

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