Looking for solutions
Worker shortage: Is paying more the answer? Minimum wage: Most agree it should be higher
“I don’t think anyone wants to be standing when the music stops. Everyone wants to find a place to land and right now is the perfect time to be searching. There are a lot of opportunities out there.”
— Pat Bokovitz, workforce development director, Chester County
In the midst of a nationwide employee shortage are calls to end the enhanced unemployment benefit now — before its Labor Day expiration — along with renewed calls for an increase in the minimum wage and for employers to pay their employees more.
Pennsylvania’s minimum wage has been $7.25 per hour since 2009. In fact, July 24 will mark 12 years since the minimum wage was raised — the longest period without a raise since the federal minimum wage was enacted in 1938, according to Business for a Fair Minimum Wage.
For workers that receive tips — employees that include restaurant servers, the minimum wage is $2.83 per hour plus tips.
None of the employers inter
viewed pay their workers minimum wage, other than the servers in the restaurants. But each restaurant owner said those servers are making a good hourly wage with tips.
David Magrogan, owner of Harvest Seasonal Grill & Wine Bar, which has eight locations, said servers at his restaurants make the server minimum plus tips, and said they are making anywhere from $30-$40 per hour on a Saturday to $17-$25 per hour on slower days.
“I understand one of the arguments is to pay a living wage. We do pay a living wage and we do pay very competitive rates. It’s not that it’s the fact that there’s just not a lot of people in the workforce right now,” he said.
Mary Keenan was offering a sign-on bonus for new employees at Pepper’s by of Amedeo’s in Upper Merion, but dropped it because it “didn’t seem to be enough of an incentive.”
“If money is not the motivation — I don’t know what is,” she said.
Pearl Somboonsong is director of development for Win Signature Restaurants, which owns five restaurants in Montgomery and Delaware counties. She said there are so many factors changing in terms of labor and the company is looking at its pay scale.
“Are our wages attractive enough to hire the people we want and we’re kind of adjusting to that. We’re finding that we’re getting to that ‘sweet spot’ where we can attract the right people,” she said.
She said the company is focusing on doing “the best we can” for hourly staff.
“For servers, fortunately we are so busy and have such generous customers — they are doing better than ever,” Somboonsong added.
Domenick Savino is CEO and managing partner at The Drexelbrook Catering & Event Center in Drexel Hill. He said Pennsylvania’s minimum wage is “way too low.” He said The Drexelbrook pays “well above minimum.” High school students earn $10-$12, and wages go up from there. Employees at the hotel restaurant are paid $8-$10 per hour plus tips.
“We’re taking that money off the bottom line but hoping as ownership to build a bridge to the future. I can’t say come work for me for $2.80 an hour plus tips. Why would they come to work for us?” he said.
“In our restaurant we have done a good job over the last 5-7 years in getting wages to a livable wage where people can support their family,” said Travis Odom, owner of 12 Moe’s Southwest Grill restaurants. He added that increasing wages will ultimately impact consumers. “As wages increase, so will prices. That is economics 101.” Odom said.
Pat Bokovitz, Chester County’s workforce development director said wages are a topic of discussion among industry partnership groups, and the conversation has been shifting as competition for employees increases.
So what is the solution?
Several employers said they believe Pennsylvania’s minimum wage is too low and needs to be addressed.
“We need to be smart in how we do it. We’re not having the proper conversations on how to make it fair and relevant,” Magrogan said.
“As a restaurant, we do need to compete as well,” Somboonsong said. “Does it mean if we raise wages that we also raise some of the menu items? The same thing with food costs. Food costs have increased an incredible amount just for the normal stuff.”
She said she is neither for nor opposed to an increase in the minimum wage, and the company will “navigate” it, and figure out “what the best system would be.”
U.S. Rep. Chrissy Houlahan (D-PA 6th Dist.) said that emerging from the pandemic, employees have discovered they have newfound power, which is also slowing a return to the workforce.
“I think that as people make decisions where to go back to, the power is in their hands, as opposed to that of the employer, and I think that’s good. Here in Pennsylvania, it’s been forever since we have had an adjustment to the minimum wage,” she said, adding that the living wage across the region is significantly higher than other areas of the state.
“People are recognizing they have autonomy and ability to ask for, and demand and get the kind of wage that allows them to live in society,” Houlahan said. “It is really expensive to live in Chester and Berks counties.”
“Everyone wants to hear what the one magic bullet is. There is no real magic bullet — there are layers to what we’re facing. The pandemic didn’t help us. Getting younger people into manufacturing and blue collar jobs is a harder struggle,” Christy Piskar, manager, people and performance for Glen-Gery in Berks County said.
Magrogan said organizations are learning how to run leaner, and questions whether — by September or October — they will have found ways to adapt to the shortage of employees.
“It will be interesting to see when everyone gets back into the workforce in the fall what unemployment will look like,” he said.
Scott Walsh, owner of J Scott Catering, said he can sustain his business, “but I cannot grow the business without having them come back to work.
“It would be better to come out of this stronger. Instead, we have to tread water. No one expected to tread water this year,” he said.
Chef Keith Taylor, who owns Zachary’s BBQ & Soul, said employers are putting themselves at a disadvantage if they’re not looking for opportunities to connect them to people better.
“A profile on Indeed isn’t enough. There are tons of fish in the sea, but they are talking with who is communicating with them on a quicker and more personal level,” he said.
In response to the workforce shortage, the Pennsylvania Restaurant & Lodging Association has launched an initiative it calls “Level Up.” The statewide multimedia campaign showcases opportunities in the hospitality industry and is a recruitment tool to drive job seekers to PAHospitalityJobs.com.
The campaign features paid display ads, Google search ads, paid social media posts with animation and links to the Pennsylvania Restaurant & Lodging Association job board.
Bokovitz said he hopes those receiving unemployment compensation don’t wait too long to get back in the workforce.
“I don’t think anyone wants to be standing when the music stops. Everyone wants to find a place to land and right now is the perfect time to be searching. There are a lot of opportunities out there,” he said.