Improving labor market turns tables on restaurant owners

Maverick's restaurant sign
A sign outside Maverick's in Roseville tells passers-by the restaurant is closed on Sundays and Mondays "due to labor shortage."
Jon Gordon | MPR News

At Maverick's, a strip-mall restaurant in Roseville, the lunch crowd steps up to the counter to order its specialty: roast beef sandwiches.

While watching customers move through the restaurant, owner Brett Hazlett says he can't find enough dependable workers to serve them. He's currently got six full-time employees, but has a hard time finding more. So he's put a sign out front telling passers-by the restaurant is closed on Sundays and Mondays "due to labor shortage."

"Especially on the weekends, it's hard to get kids that are reliable," Hazlett said.

Hazlett, who has owned the restaurant since 1999, says the starting wage is around $9 an hour, more depending on experience. Hazlett says margins are too thin to increase wages much more.

"If minimum wage did go to $15 an hour, I would be gone. There'd be a lot of businesses gone," he said.

Hazlett's also seeing higher turnover lately. And he's probably not alone.

"It's been a buyer's market for decades and that's really going to swing the other direction here," said Steven Hine, chief labor market economist with the Minnesota Department of Employment and Economic Development.

State data show the number of job vacancies grew by 8.1 percent between the fourth quarters of 2014 and 2015. Food service and hotel jobs had the second-most vacancies. Nearly 70 percent of those jobs are part time and the offered pay is $9.39 an hour.

"It's not surprising that some of the lower-paying industries may be seeing a more difficult time finding workers because there's plentiful opportunities out there now for better paying jobs for many individuals," Hine said. "And we're just not adding additional workers at the same rate that we have been in the past."

That's directly tied to the number of baby boomers hitting retirement, Hine said. And economists expect the boomers' retirement rate will pick up over the next 10 to 15 years.

The wave of retirees can be good news for job seekers.

"Kitchen wages are already going up. Basic starting wages for cooks are well above minimum wage, dishwashers are well above minimum wage," said Dan McElroy, president of the Minnesota Restaurant Association.

"Members are competing for employees in lots of ways," he said. "I talked to a restaurant operator who pays a longevity pay or a bonus if you stay."

But other changes may mean fewer job openings.

Restaurants are moving to more automated systems for taking orders. They're also cutting out table service in lieu of having customers order at a counter and having food brought to them.

And like Mavericks, some may decide to cut back their hours.

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