Restaurants are ‘sucking wind’ but fighting back to reopen amid a worker shortage

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CNBC 10 May, 2021 - 02:46pm 56 views

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Like many in his field, restaurateur Michael Pasquarello is grateful to have survived the damage the pandemic did to his business and is now looking forward to something that resembles normal.

He knows it won't be easy.

"We all have come to appreciate being able to welcome guests back and we're super grateful to be hosting again," Pasquarello said recently amid the usual din that greets a day shuffling family and business responsibilities. "But it's a different world."

For folks like Pasquarello and his wife, Jeniphur — who run three restaurants in the Philadelphia area and are opening another shortly — the world has changed dramatically from the one they knew prior to March 2020.

The burdens the hospitality industry have faced eclipsed those from probably any other in the country except for education. Proprietors faced a revolving door of closures, space restrictions, sanitation regulations and a lingering air of uncertainty about what's next.

Some survived thanks to government assistance, takeout business and the luck of the draw, but many didn't. On top of that, they're now faced with a crippling worker shortage as well as regulatory and legislative obstacles.

That burden is on a sector whose success at regaining its footing is integral to the path of the U.S. post-Covid recovery.

The Pasquarellos were able to get through the crisis by using the unique assets of each business to adapt.

Café Lift provides brunch-type foods ideal for takeout. The Kensington Quarters has a large outdoor space at the rear to accommodate diners when indoor seating was prohibited. The Prohibition Taproom couldn't have bar seating but became a "streetery" when the city allowed businesses to use parking spaces for dining.

"Like everyone else, we didn't make money. But it felt good to open a business," Pasquarello said. "So it's been a mixed bag of tricks. Each place had to figure a different way to deal with this."

Many such businesses weren't as fortunate.

More than 110,000 bars and restaurants shut their doors for good in 2020, according to the National Restaurant Association. In most states, harsh lockdown measures imposed to combat Covid-19 forced businesses that already operated at low margins to shut completely, then reopen with mostly limited capacity.

But as vaccinations provide hope in the pandemic fight, the fortunes may start turning for hospitality focused businesses.

"I'm super optimistic that we will get back to where we were," Pasquarello said.

In other parts of the country, the picture isn't quite as clear, and it's not just about reopening under Covid-era conditions.

Carlos Gazitua is CEO of Sergio's Family Restaurants, a group of Cuban eateries in Florida.

Gazitua is preparing for a summer he anticipates as potentially record-breaking in terms of demand but fears a significant problem on the other end – supply, as in getting enough labor to meet all the customers hungry to get back to dining out again.

"In the summer, we're expecting record-breaking numbers here," he said. "All the hotels are booked, restaurants expect to be going gang-busters. What happens after that is a different story. Once the stimulus is gone, that's when we're going to understand where the industry is."

In a situation hardly unique to bars and restaurants, Gazitua sums up the essential challenge now – plentiful positions open, but extreme difficulty in filling them due to a number of factors.

There are enhanced unemployment benefits that the U.S. Chamber of Commerce says serves as a disincentive for lower-paid workers to return to their jobs. There are also skills mismatches, resulting in workers struggling to adapt to new disciplines, as well as a lingering fear over the pandemic's future path that is still keeping some at home.

Whatever the cause, the shortage is stressing out business owners who are trying to staff up, as well as employees who must work longer hours to compensate for the lack of available personnel.

"We've increased wages. We have about three different staffing agencies that are constantly looking for people," Gazitua said. "Other restauranteurs are walking around neighborhoods passing out flyers. The heroes in our communities are the people currently working for you and me. These people are burnt out."

April's nonfarm payrolls report delivered a shock when the Labor Department said the economy added just 266,000 jobs during a month when Wall Street was expecting 1 million.

Some economists cited enhanced unemployment benefits as driver behind the shortness of labor, while others said the count could have just been a statistical anomaly. Virtually all other job market indicators have been positive, including jobless claims, the ADP private payrolls count and a report Monday from the Conference Board that showed its employment index rose 2.7% in April and is now 45.7% higher than a year ago.

But the hospitality industry came out of April still down more than 2.8 million workers from where it was pre-pandemic, with an unemployment rate of 10.8% compared to the national level of 6.1%, according to the Bureau of Labor Statistics.

Elmer Schultz Services owner and President Kirby Mallon sees the sector's employment struggles close-up in his business repairing kitchen equipment at restaurants as well as nursing homes, hospitals and schools. He also is based in the Philadelphia area.

"Restaurants, in general, are sucking wind. These guys are crying on my shoulder," he said.

Mallon knows their pain somewhat — he, too, is having difficulty finding workers, despite his recruiting efforts as president of the nonprofit Commercial Food Equipment Service Association. He said there are few takers despite the high level of unemployment, lucrative pay and ample opportunities.

Pennsylvania's jobless rate was 7.3% in March while neighboring New Jersey's was 7.7%, while the national rate was 6%.

"We cannot get any quality people to hire," Mallon said. "That has always been a problem in the industry, but it is absolutely the most critical issue right now. We cannot even find people that we can train."

Gazitua, though, sees another factor holding back job creation, namely the Biden administration's push to make companies eventually pay tipped workers the federal minimum wage. As a member of the conservative-leaning Job Creators Network, Gazitua is a business advocate who says the hospitality industry is being singled out while other professions like real estate and insurance are not required to pay minimum wage.

"I find it a little bit hypocritical that they're attacking the restaurant industry's sales model on employing people at a time when the industry was disproportionately impacted during the coronavirus pandemic," he said. "Changing policy and changing the sales model for an industry that's not even back on its feet is a bad idea."

Still, Michael Pasquarello is awaiting the opening of his fourth restaurant soon with anticipation that as things progress, some sense of stability will return to the industry.

He isn't worried about staffing and hasn't had to pay higher wages, relying instead on a work environment that promises less stress than your average restaurant scenario and guarantees managers two days in a row off and health insurance.

"We call it 'culture' and we try to set up a family culture inside the place that we think surpasses the financial piece," he said. "It's going to take time, but I think on the other side of this the industry is in a better place, with everyone earning more. So I'm very optimistic."

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Ether's Active Addresses Pass 2018 Peak as Cryptocurrency Soars to New Price Highs - CoinDesk

CoinDesk 10 May, 2021 - 03:02pm

The cryptocurrency's rally is supported by increased network usage.

The number of unique active ether addresses, either as sender or receiver, rose to a record high of 7.94 million on Sunday, topping the previous peak of 7.14 million reached on Jan. 16, 2018, according to data provider Glassnode.

The tally has increased by more than 100,000 in the past three days alone, taking the year-to-date growth to 86%.

“Ethereum network fundamentals that include … transactions, active address, fee collection and many other metrics are making ether fundamentally strong,” Shivam Thakral, CEO of India-based crypto exchange BuyUcoin, said.

Active Ethereum addresses and daily transaction count bottomed out in early 2020 and have been rising ever since, signaling the potential for a bull run in ether. “When there’s greater usage of a cryptocurrency, there’s more demand, and that drives the price up,” Chainalysis economist Philip Gradwell told CoinDesk last year.

Ether, the native token of Ethereum, has responded positively to the network growth, rising by a staggering 2,355% since early 2020. The cryptocurrency is trading at record highs above $4,100 at press time – up 450% so far this year. Prices have doubled in the past two weeks alone, per CoinDesk 20 data.

Bitcoin, the biggest cryptocurrency by market value, is trading near $58,200, representing a 100% year-to-date gain.

So far, however, high fees have largely failed to deter users, as evidenced by the continued rise in the active addresses and transaction count (now also at record highs). That’s a sign of real fundamental growth, according to analysts.

“Low-fee chains can fake activity much more easily than chains like Ethereum and Bitcoin,” said Alex Svanevik, CEO of blockchain data company Nansen. “So when active addresses on Ethereum are at record highs, that’s a true sign of organic growth.”

Arash Ghaemi, director of the strategy at Two Prime Digital Assets, foresees a further increase in active user participation, as web search data shows popular interest in Ethereum is rising.

“Ethereum searches are going parabolic while Bitcoin searches drop/level off,” Ghaemi said in a Twitter thread on Monday. “As Google search interest rises, so will active ETH addresses, putting pressure on price upwards.”

Ether Price Surpasses $4,000 For The First Time

Entrepreneur 10 May, 2021 - 10:46am

The ether price passed $4,000 for the first time over the weekend, and after a brief pullback, it climbed back above $4,000 again this morning. Some experts predict that the cryptocurrency's value could reach almost $20,000 by 2025.

The ether price hit an all-time high of $4,141.99 early this morning after climbing almost 7%. Although bitcoin remains the most popular and most expensive cryptocurrency by far, ether is catching up fast. In fact, Most of those who responded to Finder.com's Cryptocurrency Predictions survey said Ethereum would be the most widely transacted digital currency by next year.

Institutional investors have been piling into bitcoin, making Ethereum the next logical cryptocurrency for institutional adoption. However, it's the ether price that has been soaring this year, as CNBC noted that the bitcoin price declined more than 2% last month while either increased by more than 40%.

The Ethereum network differs from bitcoin in that developers can build apps on top of it. Additionally, proponents of bitcoin see its as a store of value like gold, but Ethereum aims to create a decentralized internet that central authorities don't maintain.

Finder.com said the experts who responded to its survey for its Cryptocurrency Predictions report expect the ether price to hit $19,842 by 2025. They believe increased transaction use, the rise of decentralized finance and non-fungible tokens and increased adoption by institutional investors will drive the steady increase in the price.

More than half of those surveyed said Ethereum rather than bitcoin would be the most widely transacted digital currency by the end of next year. Dr. Paul Ennis, assistant professor at the University College of Dublin, believes the ether price will hit $10,000 by the end of this year. He also thinks it is extremely undervalued and pointed out that it has many more use cases than bitcoin.

Seventy percent of those surveyed believe DeFI and NFTs have given Ethereum more use cases than bitcoin. However, University of Canberra Senior Lecturer John Hawkins noted that just having more use cases doesn't mean the ether price will increase. He expects Ethereum to be dragged down with bitcoin in the coming months.

It's no secret that institutional investors and corporations have been adopting bitcoin, but the same thing is happening to Ethereum, driving the price higher and higher. According to Coinshares, institutions had purchased more than $30 million worth of ether as of the end of last month.

Ethereum's market capitalization has now surpassed those of Walmart and Johnson & Johnson and approaching JPMorgan Chase's market cap.

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