As Detroit unemployment rates drop restaurants struggle to find employees

Posted at 5:30 PM, Aug 23, 2021
and last updated 2021-08-23 18:00:29-04

FERNDALE, Mich. (WXYZ) — Detroit's economy seems to be making a comeback after a difficult year in COVID-lockdown.

A report out of the University of Michigan shows the unemployment rate is at 10%, well exceeding the expectation of economic experts.

The speedy bounce back is not just because people are going back to work according to Donald Grimes, an economic researcher at U of M.

"The fact that it's gone down even more than we expected," said Grimes, "you know the extra percentage points in the city, maybe an extra percentage point statewide is because people are dropping out of the labor force."

In just this one strip of downtown Ferndale, you can find more than businesses with signs reading "now hiring."

Customer bases are coming back, but some restaurants are struggling to keep up.

"We use to do baby showers, wedding showers, anniversaries, you know today I cannot do it," said George Gize, owner of Assagi Bistro.

With only half the servers he needs, Gize is forced to close his doors three days out of the week. He built this business on his own and since the pandemic hit he's been carrying it on his back.

"I am the owner I host the people, I am the janitor, I clean up the bathroom," said Gize. "Because you respect your business, you respect your customer, and you respect your reputation."

In an effort to recruit employees, restaurants are having to pay up, some offering more than just high wages.

"People are offering staggering amounts of money, throwing thousand dollar signing bonuses on to keep staff so people are really incentivizing certain position," said Jeff Briody, a manager at Como's restaurant in Ferndale.

Grimes says some of those labor force dropouts are older people trying to avoid environments where you are more likely to catch COVID.

"If we can get COVID under control there is an expectation, at least by the Federal Reserve and ourselves, that the people who dropped out, some of them at least will come back into the labor force," said Grimes.

At this rate, Grimes says the restaurant industry could start shifting towards technology to replace the workers they don’t have, meaning less face-to-face service and more ordering from your phone and other devices.

"You're going to see an increase in what economists call productivity," he said. "You won't have people coming to take orders down on by hand, they'll be using a computer to order your meal."

"There will be more efficiency," he added.

As of now, Como's, like other restaurants, are depending on the staff they do have. Managers ask that patrons adjust their expectations and thanks to the ones who are still showing up.

"Be patient, just know the people that are working are working really hard," said Briody.

The economic outlook report was a collaborative effort At U of M’s Research Seminar in Quantitative Economics.

Over the next year, they predict major job growth in blue-collar industries, while the city’s lower‐education services industries, which include leisure and hospitality, are expected to remain 3% below their pre‐pandemic employment levels by 2026.