Job Growth in U.S. Restaurants and Bars Jumps in March

Image result for Average weekly earnings were up to $427.78 per week, as compared to $425.88 per week in February.

Restaurants and bars in the U.S. added 27,000 jobs in the past month, quieting rumblings of an economic slowdown following February’s unexpectedly low job growth numbers for both the industry and the U.S. economy overall. According to the latest economic report from the Bureau of Labor Statistics, March’s job growth numbers more closely align with what the industry had been reporting in previous months: 36,000 jobs added in January and 40,000 jobs added last December.

There were 196,000 total jobs added in March across all industries in the U.S., and the unemployment rate stayed at a steady, low rate of 3.8 percent or about 6.2 million people unemployed. Unemployment rates in leisure and hospitality remained slightly above the national rate, at 5.8 percent people unemployed in the industry.

Average hourly earnings in the leisure and hospitality sector remained essentially unchanged from the month prior, at $16.39 per hour. That’s up about 60 cents from March 2018’s average hourly earnings. Employees in the sector worked an average of 26.1 hours per week, the same hourly average that was reported in March 2018. Average weekly earnings were up to $427.78 per week, as compared to $425.88 per week in February.

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DoorDash Closes $400 Million Funding Round

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“In the last month, a pair of food delivery startups were battling complaints about their tipping policies. Customers and workers chastised the companies for unfairly using tips to subsidize worker pay. As the furor grew, one of the companies, Instacart Inc., changed its compensation policies to match some of workers’ demands.

Meanwhile, the other company, DoorDash Inc., stood firm. It still uses tips from customers to offset some of the minimum payment that a worker gets for each delivery job, in which “Dashers” travel to restaurants or stores and bring food to customers. That decision apparently hasn’t harmed DoorDash’s reputation in the eyes of investors. The company said on Thursday that it received a new round of funding that values it at $7.1 billion.

In an interview Thursday to promote the investment, DoorDash Chief Executive Officer Tony Xu defended the tipping practice, which has been in use since 2017. Xu said internal data show that under the current pay model, Dashers stay on the platform longer, are more satisfied with their jobs and make deliveries in a more timely manner. He blamed recent backlash on Instacart’s implementation of its own policy.”

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Minimum Wage Hikes in New York City Cause Restaurants to Eliminate Jobs, Cut Hours, Raise Prices

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“New York is known for its incredible food scene, but legislators in the Big Apple may have bitten off more than they can chew with the newest minimum wage hike.

The city’s mandated increase, which took effect on December 31, requires businesses that employ 11 or more people to boost wages from $13 to $15 per hour. But most restaurants operate with the tipped wage, offering servers and bartenders a lower hourly base pay and the opportunity to rake in the rest in tips, which often yields better pay overall. If workers don’t earn enough this way, employers are required to make up the difference.

That tipped minimum just rose from $8.65 to $10 an hour. A 16 percent jump is fairly punishing, considering the industry operates on razor-thin profit margins.

A new study conducted by the New York City Hospitality Alliance lends credence to the idea that substantial increases made to the tipped wage are far costlier than they are beneficial. After surveying 574 restaurants, they found that 2019 looks bleak: 75 percent of full-service establishments plan to cut employee hours, and 47 percent will eliminate jobs entirely in response to the forced minimum wage hikes. That follows closely on the heels of a dreary 2018, when 77 percent of full-service restaurants reduced employee hours and 36 percent cut jobs, both of which were also in response to the mandated wage increases.”

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