Ending Federal Unemployment Payments in Texas Won’t Solve the Restaurant Industry’s Hiring Crisis

On Tuesday, May 18, Texas Gov. Greg Abbott announced that Texas workers would no longer be eligible for the federal Pandemic Emergency Unemployment Compensation benefit starting in June, taking $300 per week out of the pockets of people who are still struggling with the economic fallout caused by the COVID-19 pandemic.

The move comes as restaurant owners across the state — and country — complain about an inability to staff up their establishments. Abbott’s decision to end the $300 in weekly supplemental payments is, according to the governor, intended to encourage people to go back to work. “The Texas economy is booming and employers are hiring in communities throughout the state,” Abbott said in a statement. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits.”

The move is not surprising. 21 other states, including Montana and Alabama, have announced similar plans in recent weeks. Abbott’s decision to cut off access to benefits that are funding in large part by Texas taxpayers was endorsed by countless business owners and lobbying groups. That includes the Texas Restaurant Association, which represents the restaurant owners who have a vested financial interest in forcing people back to work.

This has been a topic of intense debate throughout the pandemic. As early as June 2020, Republican leaders were pushing for an end to federal unemployment assistance. In the first pandemic relief bill, the federal unemployment supplement was $600 per week. That was later decreased to $300 per week, as states like Texas relaxed COVID-19 restrictions and businesses were allowed to reopen.

It’s clear that the supplemental federal unemployment payments had a significant impact in helping keep restaurant workers — millions of whom lost their jobs — afloat during the depths of the pandemic. What is less clear, though, is whether or not eliminating the benefits that people survived on over the past year will actually make them come back to work in restaurants.

Restaurant workers had an absolutely brutal 2020. Even if they were working, those jobs came with some pretty extreme risks, from contracting the COVID-19 virus to potentially being assaulted by customers who refused to wear masks. As a result, many workers who’d spent years toiling in the hospitality industry decided to go find jobs elsewhere. Some used their forced time off in 2020 to go back to school, while others chose the stability and pay consistency of a 9-to-5. Many restaurant workers took jobs at Amazon, where the minimum wage is $15 per hour. In contrast, the average hourly pay for a restaurant worker in Texas is just under $11, according to Indeed.

Amazon may not be able to offer much in the way of improved working conditions, but its wages are demonstrably higher than many restaurant jobs, especially for “back of house” workers like line cooks and dishwashers. A job posting for a “cook/cashier” at Greenville Avenue restaurant Truck Yard offers $10 per hour for a role that involves cooking on the grill, cleaning the space, and interacting with customers. Another restaurant is in search of a morning dishwasher for four hours a day, paid at $11 per hour.

Even though $10 per hour is more than the federally mandated minimum wage, anyone who’s lived in Dallas for more than five minutes knows that it is nigh impossible to make ends meet on that pay. Which is why, prior to the pandemic, most people in the service industry worked more than one job, hoping to patch together enough cash to pay the rent and afford childcare.

If restaurants expect to continue paying poverty wages, then they should also expect for it to be impossible to hire and retain workers. As people are kicked off the federal unemployment program, some may take these poorly paid positions out of necessity — sometimes you have to take a bad job just to stay afloat for a while. But as soon as something better comes along — and it will, restaurants everywhere are hiring — those workers will leave. Which means that the restaurant that refuses to raise its wages, much less provide other benefits like affordable healthcare and paid time off, will forever be in this cycle of searching for good help.

Some employers, though, are choosing to meet their demand for workers in the only way that will fix this crisis: paying higher wages. Uptown bar the Standard Pour is currently hiring cooks at $17 per hour, plus the potential for overtime pay. Beloved barbecue joint Cattleack is offering $15 per hour to dishwashers, along with medical benefits. Many restaurants, like steakhouse chain Saltgrass, are offering “signing bonuses” to workers who are hired and stay in their positions for 90 days.

It is theoretically possible that Abbott’s move to end federal unemployment assistance will bring some people back to work in the restaurant industry — but the data doesn’t seem to bear that out. A study released in March 2021 by the National Bureau of Economic Research found that the federal benefit did not, overall, decrease employment. And, judging by the number of restaurants who have advertised pay that is significantly higher than any compensation they’ve ever offered before, it’s clear that at least some restaurants are starting to get the message: If you pay them, they will come.