Republicans and business groups are sniping at President Biden over remarks at a town hall event Wednesday night in which he told a restaurant owner struggling to hire workers that his business “is really going to be in a bind for a little while.”
Restaurant groups said Biden’s offered solution to restauranteur John Lanni — pay higher wages — won’t actually solve his dilemma.
“Restaurants aren’t like other small businesses; they run on very tight margins, so any change in operating costs jeopardizes their stability,” said Sean Kennedy, executive vice president of public affairs at the National Restaurant Association.
GOP lawmakers reiterated arguments they’ve already been making about the expansion of unemployment benefits, arguing those policies are keeping workers at home.
“I worry that the president is still in denial about how harmful these labor shortages are to survival of our small businesses,” Rep. Kevin Brady (R-Texas), the top Republican on the House Ways and Means Committee, told The Hill Thursday. “And unfortunately his policies are driving up prices, because all along the production and supply chains our industries can’t find the workers they need, slowing deliveries, driving up prices.”
Brady recommended that Biden end the federal boost to unemployment benefits immediately. Many states — including Ohio, where the town hall took place — have already taken action to end the $300 supplement in their jurisdictions.
Biden’s remarks also got attention on the campaign trail, indicating that Republicans think the comments could be damaging to the president and that attacking Biden over the remarks could be to their benefit.
“What he said isn’t just insulting to the people who own restaurants; it demeans people who show up for work every day,” JD Vance, who is running in the Republican primary for Senate in Ohio, said in a statement. “It was disgraceful.”
GOP strategist Ford O’Connell said that Biden’s remarks will hurt Democrats in the midterm elections because they’re a “microcosm of the White House not understanding how business works on Main Street.”
Biden made the attention-getting remark after a Republican restaurant owner asked during the town hall in Cincinnati what the administration is doing to incentivize people to return to work.
“I think your business and the tourist business is really going to be in a bind for a little while,” Biden replied.
Biden, who said he saw no evidence that the boost to unemployment benefits was playing a major role in keeping people from working, said he thinks there may be many people who worked in restaurants before the pandemic who may now look for new careers. And he suggested Lanni may just need to raise wages.
“John, my guess is that people being seven, eight dollars an hour plus tips, that’s I think, John, you’re going to be finding 15 bucks an hour or more now,” Biden said. “You may pay that already.”
Lanni told the Cincinnati Enquirer after the event that most of his employees already make at least $15 per hour including tips and said he felt like Biden didn’t really answer his question.
“We are in a labor crisis and we need to find a way to incentivize people to get back to work. I just heard restaurants are going to have a hard road going forward and that we need to pay our workers more,” Lanni said. “That’s happening and it’s still not enough.”
The pandemic appears to have given real leverage to workers to ask for higher wages as businesses in various sectors struggle to hire.
Kennedy, of the National Restaurant Association, said that in most communities, worker demand is pushing wages higher and employers are balancing competitive wages, high food costs and debt from COVID-19 closures to try to stay afloat.
“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,” Kennedy said.
Matt Haller, president and CEO of the International Franchise Association, also said small businesses are already paying higher wages and stressed that there’s a skills gap that’s affecting small businesses.
“Large corporations can afford to upskill workers to fill specific needs, but small businesses must fill those specific needs with existing talent at a wage that works for both the employer and employee,” Haller said.
White House press secretary Jen Psaki, when asked about Biden’s comments at the White House on Thursday, said it’s a worker’s market in the U.S.
“I think what the president was noting was that in this point in time, it’s also a worker’s market and in some places it may be that you have to pay more wages in order to attract workers,” she said on Thursday.
The Independent Restaurant Coalition, a key voice behind getting the Restaurant Revitalization Fund in Biden’s American Rescue Plan, called for more funding for the program to help the situation.
The $1.9 trillion coronavirus relief bill funded a $28.6 billion program that provides debt-free support for restaurants and other establishments and covers eligible expenses like payroll, mortgage, rent and utilities.
Democrats on Capitol Hill said that Biden’s comments make sense.
“He’s right. The restaurant workers seem to be the industry that most struggles to bring workers back,” said Rep. Don Beyer (D-Va.), chairman of the Joint Economic Committee.
Beyer said that part of that is due to the fact that the federal minimum wage for tipped workers is only a little more than $2 per hour, so restaurant workers are reliant on tips. People who worked in restaurants prior to the pandemic may not want to return to being dependent on tips and may want to find jobs elsewhere.
“It will settle out over time, but there is a big mismatch right now,” he said.
Beyer added that states that have ended the boost to weekly unemployment benefits early are also struggling to bring restaurant workers back. He said that having children at home and struggling to find child care are bigger factors in people staying out of the workforce than the extra $300 in weekly benefits.
Senate Finance Committee Chairman Ron Wyden (D-Ore.) said there are many issues that contribute to the state of the job market.
“The president and I share the view that there are a lot of factors in workforce policies today,” he said.