Tough as it was for him to close Cafe Miranda in Rockland last month after 29 years in business because of chronic understaffing, two circumstances made it less painful for chef-owner Kerry Altiero.

First, Altiero, 66, said he’s ready for retirement. Second, he owns the cafe building, so he can lease the space to another restaurant.

Altiero is aware that many of his fellow Maine restaurateurs don’t have the luxury of those same circumstances right now, in a shrinking economy with one of the worst labor shortages in years. And he feels for them.

“My guess is you’re going to see bucketloads of keys on bankers’ desks later this year,” Altiero said.

Others who closely follow Maine’s restaurant industry agree. “I think we should expect to see more restaurant closures in the next six months,” said Matt Lewis, chief executive officer of the nonprofit trade group Hospitality Maine.

The state and its restaurant industry are both highly dependent on summer workers, so the current labor shortage presents daunting challenges to Maine’s restaurant owners. Last month, two long-established restaurants – Cafe Miranda and Parker’s, a fixture in Portland’s North Deering neighborhood in business for 33 years – attributed their closures to lack of staff.

Each year from 2015-2019, Maine recorded a 30 percent workforce increase at eating and drinking places in the summer season according to the National Restaurant Association, by far the largest proportional summer employment increase of any state in the country. Alaska had the second-biggest increase at 20 percent.

Restaurants nationwide are facing a similar crisis. Employment in the nation’s restaurant industry remained 6.1 percent below its February 2020 pre-pandemic high as of May, according to figures from the restaurant association. In a survey that month, 58 percent of restaurant owners said hiring and retaining employees was currently their biggest challenge.

“It’s a tight market. The pay and what we offer is better than ever before, but it’s still a challenge,” said Portland chef Matt Ginn, who has faced hiring problems at his restaurants, Evo and Chebeague Island Inn, as well as a catering business. The lack of a complete staff means Ginn and his managers constantly find themselves buried in work.

“I couldn’t be more pleased with the people I have on staff,” Ginn added. “Despite having fewer people, the ones who are here are sharp, they’re on it.”

Still, a burden remains, having to pick up slack from unfilled staff positions. “Any manager or restaurant operator has to admit right now that they could be working all day long. I could truly work from 9 a.m. to midnight every day,” Ginn said.

“We’re seeing managers loading trucks and doing deliveries when they should be managing,” said Derek Fassett, director of education and workforce development for Hospitality Maine. “They’re having to do a lot more work with a lot less people.”

A CRISIS ACROSS THE COUNTRY

The labor shortage in the restaurant industry well predates the pandemic, caused in part by inadequate wages and the perception among career-minded job seekers that restaurant work is a dead end.

“The pandemic just shined a spotlight on those issues and exacerbated them,” Fassett said. “We need to show that there can be career progress in the hospitality industry.”

What makes it worse, Fassett said, is that the sales and retail industries are poaching hospitality employees because of their customer service training and greater opportunities for remote work.

Restaurants throughout the country have been beset by the same staffing challenges this summer. According to a report released this month by National Restaurant Association chief economist Bruce Grindy, the restaurant industry added 40,800 jobs in June, about on par with the number of jobs added in each of the prior three months. Still, restaurants are 728,000 jobs below their pre-pandemic peak – the biggest shortfall of all U.S. industries, according to Grindy.

Full table-service restaurants have lost more staff than any other type of food-service establishment, since the start of the pandemic. As of April, full-service restaurants were almost 600,000 jobs (or 11 percent) below their staffing levels in February 2020, according to National Restaurant Association data.

“Staffing has been our largest struggle” over the last two years, said Cassidy King, who helps run the Brunswick Diner with her mom, longtime owner Jane Davis. King said they’ve had a particularly hard time finding cooks.

So to keep their business viable for now, King said Brunswick Diner raised menu prices and instituted a 3 percent service charge on all checks. The service charge money goes to the two cooks and two dishwashers they have on staff.

The diner also raised their starting back-of-house wages by about $4 an hour “just to get anybody to show up.”

The strategy has paid off, at least to an extent. “The 3 percent service charge adds nothing significant to any one check, but it adds up,” King said. “It’s basically an additional $2, $3 or $4 additional hourly pay for back-of-the-house staff, on top of the increased wages.”

Still, the diner remains understaffed by about two cooks and two dishwashers, forcing it to cut back from operating daily to being open only five days a week.

“We seem to be doing well, but we’re not open enough to make any money,” King said.

THE WAY FORWARD

Industry insiders insist that the way out of the current economic challenge for restaurants seems to involve the very tack that Brunswick Diner took – a combination of paying cooks more and raising menu prices to cover increasing business costs.

“Raise your prices, add your services, whatever it takes for you to be solvent, take the hit now, and then, essentially, the market will determine whether you exist, if people will pay the prices you have to charge,” Altiero advised struggling Maine restaurateurs.

Hospitality Maine officials noted that the news isn’t dire for all Maine food and beverage businesses, and that they’ve heard many employers tell them they’re almost back at their full staffing levels now.

But for those restaurants facing staffing issues, “they’ll have to raise their prices not just to cover rising expenses, but if they want to hire and retain employees,” Fassett said. Lewis noted that he expects restaurant operation costs to continue to rise for the foreseeable future.

From inside the restaurant industry, the outlook for the rest of 2022 is dour. According to the National Restaurant Association’s June survey, only 18 percent of restaurant operators said they expect economic conditions to improve in six months – the lowest reading since March 2020 (15 percent). Forty-three percent of operators said they think conditions will worsen in six months, while the other 39 percent expect conditions to be about the same as they are now.

This is only the second period in the 20-year history of the association’s tracking survey that over 40 percent of restaurant owners said they expect economic conditions to worsen in six months. The first time was in 2007, during the run-up to the Great Recession.

Maine restaurants have already bumped up the wages they offer to cooks. Countless online help-wanted ads for restaurants like Ginn’s Evo list wages between $20 and $25. The national mean hourly wage for full-service restaurant cooks last year was about $15, according to the U.S. Bureau of Labor Statistics.

Moreover, Maine pays some of the highest mean wages in the country to cooks, between $33,900 and $40,380 annually, compared with the national mean of $31,350, according to the bureau.

But the cooks should earn even more, Altiero and others argued, saying the substantial pay disparity between line cooks and tradespeople like plumbers and electricians isn’t fair to culinary workers.

“We need to show that there can be career progress in hospitality, and higher wages that are more competitive with workers in other industries is one way to do that,” Fassett said.

“Are good, experienced cooks worth $30 an hour? Yes,” Altiero said. “A quality craftsperson is a quality craftsperson. When do we start to invest in the people, the human capital, that is the lifeblood of our business?”

HOW MUCH WOULD YOU PAY?

At the Brunswick Diner, King said they invested in a quality kitchen staff, hiring fine-dining chef Chris Geer (formerly of Cinque Terre in Portland and Tuscan Brick Oven Bistro in Freeport) in May 2021. Geer cooks all the diner’s dishes from scratch, and has added some slightly more upscale dishes to the menu like a crab cakes eggs Benedict and his slow-cooked house-made brisket hash.

“We figured if we were raising menu prices, we may as well elevate the dishes. We’re trying to keep things as high quality as possible. And we’ve created a new group of regular customers who love it,” King said.

Along with wage and menu price hikes, Altiero said what the industry really needs is a sea change in the public’s attitude about restaurant costs. “Say you sit down for a full dinner at your favorite place that usually costs you $70. Would you pay $80 so that restaurant is still there two years from now? Make your choices, because it’s time to put your money where your mouth is, literally,” he said.

Fassett said he sees improvement on the horizon for the state’s restaurant industry. He pointed to Hospitality Maine recruitment and kitchen apprenticeship programs that will be tapping into “underutilized labor pools,” including teens, people in addiction recovery and the formerly incarcerated. A new online job board aimed exclusively at the state’s hospitality industry, mainetourismjobs.com, went live in March and has had more than 22,000 hits from job seekers since then.

But when will the supply of available, experienced kitchen workers meet the demand?

“Our students get scooped up by restaurants even before they graduate,” said Maureen LaSalle, chair of the culinary arts and hospitality management program at Southern Maine Community College. The school currently has about 65 culinary students and 35 hospitality students. The pandemic caused enrollment in the program to drop, but it’s bouncing back now, and LaSalle said she’s very encouraged by fall enrollment numbers.

So in the near term, while experts insist menu prices must increase to cover increasing wages and other costs, restaurants will only be able to stay afloat if their customers agree to pay the higher prices.

“Consumers are extra-sensitive to menu price increases, and restaurant owners know this,” said Hudson Riehle, a senior vice president for the National Restaurant Association. He noted that from May 2021 to this past May, the nation’s menu prices have risen 6.9 percent, the most in one year since 1981, though still short of other inflated costs, like the 9 percent increase in grocery prices in that same period.

“If you need to raise your wages, you raise your prices, like every other business on earth,” Altiero said. “You cannot be afraid of that. We’re afraid of going out of business. Well kids, you’re going to go out of business if you don’t raise prices. Do it now, or you’ll regret it.”

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