Posted on 09/02/2017 3:51:13 PM PDT by nickcarraway
Over the course of one week this summer, I counted a staggering 61 local job openings posted on Craigslist under Food/Beverage/Hospitality. Line cooks, bartenders, sandwich makers, hostesses, servers, prep cooks, baristas, sushi chefs, dishwashers and cashiers were all needed across Santa Cruz County, from Scotts Valley to Watsonville.
The long list of available jobs confirmed what I had been hearing from people in the restaurant industry for more than a year. One sous chef and kitchen manager I know, for example, has been pulling doubles and working six days in a rowor morefor months, unable to find suitable line cooks to share the load while commuting from Brookdale. I admire her steely reserve, but I wonder how long anyone can work under those circumstances.
Earlier this summer, I ran into Andy Guy, the hiring manager at 515 Kitchen & Cocktails, at the downtown farmers market. Usually upbeat, he looked pained when I asked him how he was doing.
Not good, he said.
Over the previous two months, he had found himself in the position of needing to hire 10 people, with no candidates walking through the door. Exhausted and incredulous, he ended up calling people who had worked at 515 years before to see if they needed any extra cash.
Earlier this year, I wrote a column in defense of the Santa Cruz food scene and it stirred up a conversation about some of our restaurant scenes shortcomings. Many readers said they were discouraged from going out to eat locally after experiencing chronically poor service. It was a criticism that I couldnt argue with, and I began looking into what many see as a sharp decline in local restaurant service over the last couple of years.
The biggest reason, it turns out, is simple: Santa Cruz Countys restaurant industry is facing a serious labor shortage.
But how could a town with so many young people and college students be facing a labor shortage, especially in an industry where even the most ambitious creative types have traditionally had to start at the bottom and work their way up? Do aspiring chefs find the notoriously ruthless industry less attractive now that they can find better 9-to-5 work in catering kitchens at high-end grocery stores and tech campuses? Is it fallout from the rise of the Food Network, which has led foodies to flood culinary programs over the last decade?
Perhaps, but many local managers and restaurant owners say theres a far more dire reason employers are having a hard time finding and keeping staff: high rents in Santa Cruz County make it difficult, if not impossible, for someone working in service to make ends meet.
Now more than any time in the past, hiring has been more difficult, mostly due to the lack of people being able to afford to live here, says Guy, who has worked in the local service industry for six years and managed three other bars where he hired and fired staff. He says hes never had so much difficulty finding eligible employees.
Guy says that some of the employees who left Santa Cruz didnt necessarily move anywhere with less expensive rentstwo went to New York City, one went to Colorado, and two went to the San Francisco areabut they left under the assumption that they would be able to make more money at larger, more high-end establishments in metropolitan areas with the skills theyd earned.
Santa Cruz isnt a big city, and the opportunities to make the amount of money with the time and money that youre putting in is better elsewhere, he says.
Even after filling positions, hiring so many people at one time puts considerable stress on the business and existing staff. If youve been working at a place for four years and everyone around you is new, you have the same job title, but you have to work twice as hard, Guy says. People arent trained up, everyones learning, so it puts a considerable amount of stress on the people that decided to stay. That makes it even harder for the people who have stayed to stay longer, because their jobs are getting harder and harder.
As a result, Guy admits that hes occasionally kept workers hed like to let go on for longer than hed like, just to have enough people on hand. And if he does let someone go, its easy for that person to find work at another establishment. Ive had to let some people go for very justifiable reasons, but people dont call for references anymore. Managers hire and say, Oh thank Goda body! And then Ill walk into a business and see that that person is there. People are just scrambling to find people.
Guy believes that the only way the industry will stabilize locally is if housing costs become more manageableeither from an increase in the amount of affordable housing, or a decrease in rents. The whole town runs on students and tourism, says Guy. Its hard to have a community when no one in the service industry can make ends meet and youre stacking 25-year-olds two to a bedroom in houses that are falling apart.
NARROW MARGINS
Accommodation and Food Service is the fourth largest industry in Santa Cruz, employing 3,920 people at 297 establishments, according to the City of Santa Cruz Economic Development Office. Economic Development Manager J. Guevara points out that the high cost of living here is not just housing costs per se, but a combination of expensive housing, food, transportation and health care.
The median household income in the city of Santa Cruz is $70,297, and the median household expenditures on shelter, transportation, food and beverages, healthcare and utilities is $66,349. This leaves only $3,948 per year in the median household income left to address any debt, savings, or pursuing further education or opening a businessthats just over 5 percent of annual earnings left over, says Guevara.
Many employees in the service sector, then, exist within a very precarious financial situationan increase to any portion of the cost of living can overwhelm an already extremely thin margin.
The lions share of costs may be devoted to housing, but transportation can also be a significant factor, as many people who make up the service sector workforce may need to live farther away, and then pay more to fuel their commute.
Despite working at two high-volume restaurants in Santa Cruz, Alex Sainez realized it was simply too expensive to live in the area as a cook, and decided to live out of his car. That was two years ago.
I ended up spending most of my wages on basic needs, and my bills for my truck, says Sainez, and I quickly realized that I was putting in all my time at work, and barely spent time in my room because of it. It made renting a room kinda pointless. I would stress all pay period about my bills and still struggle at the end of the month to get groceries. It wasnt fun.
Hes confident that hell find housing againjust not in the Bay Area. Temporarily, he believes the sacrifice is worth the culinary education hes receiving in Santa Cruz. Its one of the best areas to learn to cook in the nation because of all the produce that can be found and utilized by various chefs that have raised restaurants here. I stay here and struggle like this simply to learn and improve my resume in hopes that Ill find better employment with more survivable wages in an area that has a more affordable housing situation, he says. Passion over pain.
BOTTOM LINES
As a result of legislation in the state of California that went into effect on Jan. 1 of this year, the minimum wage, which most restaurant workers earn, will increase every year until the end of 2022from the current $10 per hour to $15 per hour. While supporters of the increase argue that it will create a more livable wage for millions of workers and increase their ability to buy goods and services, critics say the financial strain on some business owners will be too severe.
Alec Stafansky Oasis Uncommon Brewers Alec Stefansky, owner of Oasis, says its hard to keep wages on pace with Santa Cruzs ever-increasing cost of living. PHOTO: KEANA PARKER
The wage increase, and his ability as a business owner to provide a living wage for his employees, has been at the forefront of Alec Stefanskys mind since he opened Oasis, Uncommon Brewerss tasting room and Matambre restaurant, with business partner Chris LaVeque earlier this year.
Its one of the things Im looking at, says Stefansky. Just being able to offer regular raises and cost-of-living adjustments, given how quickly rents are rising, is going to be really difficult to do. I can see a future in a couple years where people who are working normal jobs are going to be priced out.
With the knowledge of the competitive service industry market and in anticipation of the increase, he says Oasis is offering wages above the minimum in the kitchen in order to try and maintain the existing staff and keep them motivated.
Kitchen work is hard work with long hours. Its meticulous and hard to do. Its one of those jobs where theres a lot of demand in the county, so if it doesnt work out one place, people can hop around fairly often. Its one of our concerns right now that they keep the core group.
While the wage increase may strain his business down the line, Stefansky says the alternative is not an option, at least not in Santa Cruz. How do you expect to pay rent on minimum wage? Its not going to happen.
He points out that rising living costs, accelerated by rapidly increasing rents, are going to lead to a larger problem in this communityless expendable income means that fewer people will dine out.
If people are spending all their money on housing, then theyre not spending their money going out to a nice dinner and then having a beer, he says.
Despite his best intentions to provide a sustainable work environment for his employees, Stefansky feels theres little he as a small business owner can do to fix larger political issues. The pathway to the middle class is getting narrower in this country, and thats something as a small business owner that I dont have the power to change. Hopefully well be able to vote for someone who can do something about it.
BREAKING POINTS
Nikki Howe, co-owner of Cafe Cruz, believes that there may be other factors in addition to rising rents contributing to the shrinking service labor market. She points out that the construction industry is booming again, and the sectors draw from the same hiring pool. At the same time, increasing political pressures on immigrants may be contributing to fewer being able to secure work permits. She says that several potential hires have fallen through when the restaurant has asked for work authorization.
Maybe it has something to do with rent increases, but looking down the line, its hard to know because I think all these factors contribute, says Howe.
Because Cafe Cruz offers benefits, health insurance, vacation and sick days and 401Ks to all full-time employees working more than 30 hours, Howe says that while finding labor is a concern, they have not felt it as acutely as other local restaurants. She says they are currently hiring for one line cook position, but otherwise are fully staffed.
However, Howe explains that when employees have left the community, housing concerns generally play a part: Maybe its not rent increases, but theyre looking down the line, and realizing they could have more in a more affordable community.
With housing in Santa Cruz at a premium, its unlikely rents will decrease anytime soon. According to Zillow, the leading online real estate and rental marketplace, the average rent in Santa Cruz Metro area for July 2017 was $2,978, about $2.30 per square foot, an increase of 0.6 percent from June 2017 and an increase of 2.8 percent from last year. Watsonville is experiencing the most rapidly increasing property value, at 0.9 percent per month.
Perhaps Cafe Cruzs model is the solution restaurants will have to face, offering restaurant workers more attractive benefits in order to see the industry return to the competitive job market.
This may seem dramatic for an industry that traditionally pays minimum wage by the hour and often doesnt provide paid leave or healthcare, but as the lack of skilled service workers becomes more severe, financial losses resulting from low and unskilled staff may outweigh the costs.
BIG SHIFTS
Sue Slater, chair of Cabrillos Culinary Arts and Hospitality Management Program, says she receives calls and emails about five times a week from restaurants desperate for employees. Theyll call and say, Please, I just had two line cooks leave. Or they have no one to work for Mothers Day. Everyones desperate for bodies.
Unfortunately, shes often unable to help them. Weve seen a tremendous drop in students. Each semester, the numbers chip away, she says. For instance, we were turning away students from the program two years ago. Now were struggling to keep labs open. Its a big topic of conversationwhy is this happening?
She admits that they typically see lower enrollment when the economy is good, as it is now, because people are more likely to return to school to pursue new careers when jobs are scarce. But she also sees many workers driven into other more profitable industries. Those that remain, especially line cooks, are in high demand.
Employers are basically hiring people off the street, says Slater. They then incur the timely and expensive task of training those employees from scratch, keenly aware that customers may not return to their establishment if they have a poor service experience in the interim.
Clearly, this labor shortage is not unique to Santa Cruz County. Cooks are fleeing expensive cities like San Francisco in favor of more affordable locales. In an attempt to address this, California is implementing the Strong Workforce Program, which will create more job skills training courses at community colleges in the state. As part of this program, Cabrillo will offer two non-credit entry level classes in knife skills, and sanitation and cooking techniques for restaurant workers.
Slater hopes that these one-day classes will be a short-term band-aid for problems that face the workforce, but doesnt expect them to be available before fall of 2018. Were here to serve the community, and we see that this is something the community needs right now. Employers are already trying to pre-book, and some have said theyll offer raises to employees who take them.
But in order to keep skilled workers, especially cooks, she believes employers will need to consider how they can make these jobs more attractive. One example of how this might be done was implemented by Danny Meyer, CEO of the Union Square Hospitality Group, at his high-end restaurants in New York City including Gramercy Tavern and The Modern. In an attempt to compensate his whole team fairly, in 2015 Meyer eliminated tips in lieu of a service charge included in the price of the meal, a program he calls hospitality included. The price on the menu is the price the customers pay and profits are equitably distributed among all staff. Skeptics decried the controversial experiment, but eighteen months later Meyer reported in an interview with NPR that his staff were very happy with the change, and to his knowledge he hadnt lost any customers to sticker shockin fact, he said, the practice was very well-received. Slater believes this may be the path forward for restaurants. While its scary and risky, she says, the industry has to change.
Update 08/31/17 3:55PM: Misspelling of Alec Stefanskys name and Uncommon Brewers corrected.
In some of the agriculture in Santa Cruz County there are organic farms that have year round works that are paid a survivable salary. Their produce may be a little bit more expensive, but the produce you by in the super market is at a lower cost, because it's subsidized vy illegal migrant workers.
A few things come to mind:
He isn’t paying enough.
Welfare is distorting the market.
He isn’t charging enough for his products/service.
High Taxes —> High housing costs
Most local governments are totally clueless about “affordable housing”.
Two words for the chronic lack of housing in the oil patch when the oil economy is booming: MAN CAMPS!
Uncle Sugar, per typical, artificially inflates prices by paying more for apartments of welfare recipients. Section 8, is it called?
need a below the minimum to hire HS kids
just down the freeway n lovely SF are a couple of hundred thousand out of work homeless.
Market forces will eventually sort this out. Wages will rise and more applicants will compete for those openings.
sorry, up the coast I thought Santa Rosa in my senior moment
They can eat ramen.
Housing is so expensive there, was talking to a guy from Santa Cruz 3 nights ago, his son makes 100k per year and is leaving the state because he doesn’t want to spend all his earnings on a roof. He’s able to work from home so that’s exactly what he did.
Offer an American wage to legal Americans and you’ll do much better. Hire illegals, hire Americans at the rate you can hire illegals, you’ll have the problem being experienced.
how do you walk around with a name like J. Guevara? He could probably get a good position with AuntieFaye.
Wages will rise and the number of establishments will decrease, in part because “wages will increase.” For restaurants that don’t expect their clientele to be tuxedoed it is hard to raise prices more than an itty bitty bit and keep clientele.
Then the McDonalds came to town with a bunch of copycats like Burger Chef, Bob's Big Boy, Tastee-Freeze and Hardees. That was actually still considered "eating out" in those days.
Now there are endless "casual eating" joints from coast to coast and in the urban areas, countless "upscale" eateries that seem to be on every street corner. My favorites though are still the Irish pub joints where you can get a decent burger and some pints of ale at a bar with a lot of brass and wood.
Not to mention the meal kits you can pick up at the supermarket or have delivered to your home (i.e. Blue Apron).
Also, Coastal and near communities restrict building with severe zoning and land use “plans” in order to keep the riff-raff out of their communities. San Fran does that with a vengeance then welcomes in bums and wetbacks so the city looks and smells like a third world cesspool. But those folds don’t belong to the dreaded middle class so there are compensations, I suppose.
I don’t think a lot of them can afford to live in Santa Cruz or any place near it.
In SC, half the small businesses are owned by foreign nationals with big $$.
A nice Irish pub for some fish and chips made with Icelandic cod and a few brewskies. Yes sir!!
my wife learned to cook from her stay at home mom 10 kids. but she went to work as a nurse and came home tired/. No body iced my cooking so I had excuse. ewe ate dinner out 4-5 times a week to give her a break. i think women working g sparked restaurant boom and of course Micky Ds
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.