Restaurants Are Dangling Big Perks But Are Still Short Of Labor As the U.S. economy continues to rebound from the pandemic recession, lots of people are going back to work — but not as quickly as many employers would like. Employers added 943,00 jobs in June.

Restaurants Are Dangling Vacation And Matching 401(k), But Many Workers Aren't Biting

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A MARTINEZ, HOST:

A lot of people are going back to work, but not as quickly as many employers would like. The Labor Department said this morning that U.S. employers added 943,000 jobs in July. That's up slightly from the month before, but overall employment is still about 5.7 million jobs short of where it was before the pandemic.

NPR's Scott Horsley joins us. Scott, I know you've been talking with a lot of employers. What are you hearing?

SCOTT HORSLEY, BYLINE: A, factories, delivery companies, construction firms - they've all been clamoring for additional workers to keep pace with increased demand. Once again last month, restaurants and bars led the way in hiring. They accounted for about a quarter of all the jobs that were added in July. The hospitality industry, though, is still down about 1.7 million workers. I spoke this week with Liz Valenti, who runs a couple of restaurants in Dayton, Ohio. She says sales there are better than ever.

LIZ VALENTI: Customers, since the vaccination has kicked in, they've been much more eager to spend dollars, and we've benefited from that.

HORSLEY: But even with that strong demand, Valenti is keeping her restaurants closed on Sundays and Mondays. She just doesn't have the staff to stay open seven days a week.

VALENTI: Not everybody wanted to come back to this industry. So people that have been in this industry for five, 10, 15 years made the decision not to come back to hospitality. They've moved on to other areas of career paths.

HORSLEY: Restaurant jobs are still relatively low-paid, but the wages have been coming up as employers try to compete for workers. Valenti's boosted pay for her line cooks from $13 to $15 an hour. She's also been touting fringe benefits that we don't often associate with the restaurant industry.

VALENTI: There's paid vacation. There's health insurance that we underwrite. There's a 401(k) match. So we really are trying to get people to see that they have the capacity to earn a good living here, as well as to have a good quality of life.

HORSLEY: Ordinarily, you wouldn't think workers have a lot of bargaining power when millions of people are unemployed, but that's what we're seeing. Julia Pollak, who's a labor economist with the job-search website ZipRecruiter, says a lot of businesses are finding they have to put more money on the table to recruit workers. In some cases, they're also having to hire people with less experience than they like.

JULIA POLLAK: For example, we saw a huge increase in the number of job postings offering signing bonuses and advertising that starting salaries were $15. And that should help some employers seal the deal.

HORSLEY: Sure enough, a couple of the big publicly traded restaurant companies, Chipotle and The Cheesecake Factory, say they have been able to staff up fairly successfully after raising their wages. At the same time, millions of workers are still on the sidelines. Many were expected to go back to work in September. That's when a lot of schools are supposed to reopen, spelling relief for working parents. It's also when pandemic unemployment benefits are set to expire in the states where they haven't already lapsed.

However, the new spike in coronavirus infections has thrown that timeline into question. Federal Reserve Chairman Jerome Powell says the rise of the delta variant could drag out the recovery in the job market.

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JEROME POWELL: Some people might say, you know what? I'm just going to wait a couple of months before going back to work. It may be that the effect is to slow the economy down just for a period of months.

HORSLEY: The worsening health outlook has also prompted some companies to postpone their plans for a return to in-person workspaces. ZipRecruiter's Pollak says that's a potential setback for neighboring businesses that rely on that office foot traffic.

POLLAK: As people were returning to offices, they were, of course, returning to the restaurants and nail salons and dry cleaners around their offices. And that was sort of reviving employment in downtowns. That may now be on pause for the next couple of months.

HORSLEY: Because of the delta variant, servers at Liz Valenti's restaurant in Ohio have chosen to start wearing masks again. They got to go mask-free for all of about 10 days this summer. So far, Valenti is not asking her customers to mask up, but she says that could change.

VALENTI: Governor DeWine has made it clear he is not going to make a mandate again. So I think it's going to be on the shoulders of independent businesses to make that hard call. And it's unfortunate that it's going to be a young person at a host stand that's going to possibly have to ask someone to put a mask back on. That's a really unfortunate situation.

HORSLEY: And, A, the prospect of having to deal with a few hostile customers who don't want to wear a mask is not going to make recruiting at restaurants any easier.

MARTINEZ: Scott, anything else stand out from this morning's report?

HORSLEY: Well, this is a strong report. Job growth is picking up steam. But a cautionary note - this reflects the job market as it was a few weeks ago, before the big spike in coronavirus infections. So, as always, the path of the recovery will depend a lot on what happens with the virus.

MARTINEZ: NPR's Scott Horsley - Scott, thanks.

HORSLEY: You're welcome.

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