Spokane restaurant owner says labor, supply shortage ‘just keeps trickling’
For the first time in over two decades, the owner of a popular pizza restaurant in Spokane is closing his doors on Sundays. Why? Because there’s a worker shortage.
“I defy anyone to go stand outside and look up one side of the street and down the other without finding a sign that says now hiring, help wanted,” said Mark Starr, owner of David’s Pizza in Spokane.
Starr says he had 27 people working for him before the pandemic, and now has just 11.
“These are people who want to work and do a great job and our business came back gangbusters. It’s just been incredible since the state reopened, but we’ve not been able to attract labor,” he said. “And the problem is not unique to Spokane and it’s certainly not unique to our industry. There’s some pretty good compensation packages out there right now that got started during the COVID era that are continuing on. And I asked the very simple question if there’s that many people that are looking for employees, why do we have unemployment?”
Starr told the Jason Rantz Show on KTTH that he does think the extra perks involved in unemployment due to COVID is part of the reason why people are choosing to stay home.
“I’ve heard you know from a lot of people that have not been able to go back to work or have chosen to stay unemployed that they can make more money staying at home,” he said. “I think the bad thing about that is the free money. In other words, if we’re teaching people that they don’t have to do anything, if that’s the example that we’re going to set, they can just stay home and we’ll send them checks, how do we find people that are wanting to get out and produce an income and be part of the society and keep it moving forward?”
Starr suggested that instead of giving an extra $300 a week to those on unemployment, give it to the people who are working 35 hours or more a week and have been for the last six months.
“Those are the people that are keeping our economy moving right now,” he said. “And I’d love to see them get a thank you for doing that while so many others have chosen not to go back to work.”
At David’s Pizza, Starr made the decision to close on Sundays to give his workers a break. He said he can see that they’re worn out having to work late and then be back early the next day.
He has had applicants, but a lot of them are asking for more money than Starr can afford to pay.
“The state of Washington pays higher minimum wage than anywhere else in the country and built to stay that way. If I compare Spokane to Coeur d’Alene, which is a quick 20 minute trip to the east, depending on your position, you could be easily making two, three, even four times as much in Washington state, Spokane, then you would be in Coeur d’Alene,” he said, then describes someone who said he’d work if Starr were to give him 40 hours a week at $20 an hour.
He’s told all the people who contacted him to send over a resume, but says he only got one.
“I can’t tell you how many people say, well, what are you paying? And maybe that’s not a bad question,” he said, but it depends on ability and experience.
Shortages impact the entire chain
The demand for higher pay is coming at the same time, Starr explains, that prices are up on goods.
“The statistic I’m about to give you that I hope your listeners take to the bank with them is that for as busy as their favorite restaurant is — and I call it napkin math — you look at how many people are at each table and you figure each one spending however much. They’re thinking to themselves, as they should, ‘God, this guy must need a wheelbarrow to get to the bank. This place is insanely profitable.'”
“Well, here’s the truth: Anything that goes underneath like $1.5 to $1.7 million a year in gross sales, and the vast majority of small businesses are a million or less, is running a 6% profit margin, Jason, if they’re doing everything perfectly, perfectly — with no breakdowns, with everything running like it should, that’s six cents on the dollar,” he said. “So the only way that you make it in the restaurant industry is with volume.”
Starr says people who stay in the restaurant industry stay because they love what they do.
“Trust me, it’s not for the money, and anybody listening to the show that knows the industry is shaking their head up and down right now. But the vast majority of the public doesn’t get that,” he said.
“That’s neither here nor there for our customers,” he added. “We want to provide the best services that we can.”
They’re also now dealing with delays and shortages all the way through the chain.
“I have suppliers, … they’ve got a labor shortage going on, too. We have a very well-known restaurant over here and their delivery was three days late because they’re short of drivers,” Starr said. “My daily deliveries, which are usually here before eight o’clock in the morning sometimes don’t get here until two in the afternoon because they’re short of drivers.”
Drivers have to have a break between their shifts, so if they get in late one night, Starr explains, then they’ll be starting later the next day.
“So now you’ve got restaurants that are not only struggling with low labor, but now they’re getting deliveries in the middle of the lunch hour, which means that they’ve got to pull somebody off to receive the freight,” he said. “Well, they may have only had a few people to begin with and there wasn’t somebody to pull off.”
“This thing just keeps trickling,” he added. “And it’s not just true to the restaurant industry, this is affecting everything. You’re seeing it everywhere in so many different facets. What’s going to happen and what is starting to happen is prices are going to start to go up.”
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