Restaurant owners savaged President Joe Biden after he told them to raise wages during a CNN-sponsored town hall on Wednesday in response to a question about how his administration planned to incentivize people to go back to work amid a labor shortage.
At one point during the town hall in Cincinnati, a half-empty venue moderated by host Don Lemon, Biden was asked by John Lanni, owner of the Thunderdome Restaurant Group overseeing 39 eateries around the country, what he planned to do in order to make it more attractive for Americans to reenter the workforce after he signed COVID relief legislation earlier this year that boosted unemployment pay to a level that makes it nearly impossible for small businesses to compete.
Lanni explained that restaurants, especially, are experiencing a massive labor shortage in large part because many Americans can make more on unemployment than they can by working.
“The entire industry, amongst other industries, continues to struggle to find employees,” Lanni, who already pays workers $15 an hour, said. “How do you and the Biden administration plan to incentivize those that haven’t returned to work yet? Hiring is our top priority right now.”
Biden responded by telling him and other restaurant owners to cough up more money to pay workers.
“I think it really is a matter of people deciding now that they have opportunities to do other things and there’s a shortage of employees,” Biden said. “People are looking to make more money and to bargain. And so I think your business and the tourist business is really going to be in a bind for a little while.
“People being seven, $8 an hour plus tips, that’s – I think, John, you’re going to be finding 15 bucks an hour or more now,” Biden continued.
That response did not sit well with restaurant owners who said that raising wages by an inordinate amount will result in higher food prices for customers, thereby punishing them and perhaps driving many to cut back on dining out altogether.
In an interview with the Daily Mail, John Stratidis, manager of The Famous Cozy Soup ‘n’ Burger in Manhattan’s Greenwich Village, made that same argument.
“When minimum wage goes up, who do you think is going to pay for that? The customer. Everything is going to go up just to be able to stay in business. When we give more money, the prices go up and when the prices go up who’s going to pay for that?” he said.
“They’re going to be crying about it, and saying ‘it’s too expensive.’ That’s inflation. You’re going to be walking in somewhere to eat something and paying $40 or $50 for a hamburger,” Stratidis continued.
“We need to get back to reality. A lot of people are in this bubble… the longer we stay closed, the bigger this becomes. We’re already in trouble,” he said. “If we don’t get back to work and get the ball running, we’re going to be in trouble.”
As the COVID pandemic began and businesses like restaurants were ordered closed, owners and managers like Stratidis were forced to lay off all of their staff. Stratidis said he has managed to hire back a handful of workers but he can’t afford to bring the rest back just yet.
“Everyone is chilling right now, collecting $1,200 in unemployment benefits. What happens when those stop in September? When unemployment stops, poverty starts. If there are no restaurants, where are you going to work?” he told the Daily Mail.
Meanwhile, Robert Mahon, owner of Broadstone, Toro Loco, and Amor Loco in New York City, said Biden and Congress should add more funds to the Restaurant Revitalization Fund.
Initially funded at $28 billion, the program doled out money to 100,000 restaurants. But 280,000 applied seeking a total of about $72 billion.
Republicans now want to add $60 billion to the fund.
“If Joe wants to help out the restaurant industry he must replenish the Restaurant Revitalization Fund and cut unemployment benefits now,” Mahon said.
Following Biden’s town hall remarks, the National Restaurant Association cited Lanni’s concerns and added that the food industry operates on small profit margins.
“Last night, Mr. Lanni expressed the same fear and frustration being felt by operators across the country. Restaurants aren’t like other small businesses; they run on very tight margins, so any change in operating costs jeopardizes their stability,” the organization said.
“In most communities the demand for workers is pushing wages significantly higher, and restaurant operators are doing their best to offer competitive wages in this new environment, but they’re also balancing skyrocketing food costs and debt from operating in the red for the last year,” the group’s statement continued.
“Higher wages alone won’t solve the problem when there aren’t enough people in the labor pool to fill the millions of open jobs,” added the group’s executive vice president for public affairs, Sean Kennedy.
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