Some Hard-Hit Local Small Businesses are Starting to Rebound
May 31, 2021
For small local businesses, the beginning of the pandemic presented a grim view of the future. With massive uncertainty and a slowdown in profits, small businesses had to grapple with issues that a chain like Chipotle could not fathom.
A study of small businesses in the services sector by the Federal Reserve of New York noted that 35% of small businesses tracked prior to the pandemic are still closed and have been inactive for 20 or more weeks. Furthermore, only 3% of currently closed small businesses can expect to reopen, highlighting the challenges that small businesses nationwide face.
Despite the challenges nationwide, some local businesses in San Carlos report that business is picking up, and they are having limited difficulty convincing their employees to return to work. The Office Bar and Grill, a self-declared local “neighborhood hangout and sports destination,” according to their website, has not been faced with any issues in terms of labor up until this point.
Jeff Boebekker, the general manager of The Office Bar and Grill, recounted how the business had shut down early last year, just as “every restaurant had to.” Speaking to the rebound, Boebekker talked about how the business stayed afloat with minimal funds and is looking towards June 15 as a telling sign of things to come.
“We basically took 33% of our sales, and that’s what we had for the entirety of last year,” Boebekker said. “Now, we are starting to do events again, and I’m starting to see consumers coming back. With June 15th being the day we are doing a 100% reopening, business is picking back up due to our availability of outdoor seating.”
The Office and other San Carlos-based restaurants did follow the nationwide trend of shutting down at the beginning of the pandemic. Yet, the reported trend of workers not coming back does not seem to hold up at this establishment.
“Here, we’re happy to announce that every person that we had before [the lockdown] came back,” Boebekker said. “We didn’t have any problems […] People were waiting to come back to work.”
This local experience may be influenced by several factors. One possible explanation would be that San Carlos’ high minimum wage ($15.24) and cost of living in the Bay Area could mean that the government-issued unemployment benefits and stimulus checks distributed over the past year have not covered basic needs, encouraging people to seek employment and/or return to work.
Talking about the prospect of a labor shortage nationwide, Lopezlira said, “If, in fact, businesses are experiencing labor shortages, then that means wages are not as high as they need to be to incentivize workers to supply more labor. So we should see evidence of significant wage acceleration. However, wage growth in April 2021 was only 1.2% higher than a year earlier.”
However, Chipotle’s decision to raise the minimum wage may reflect the changing dynamic as businesses scale back up their operations and compete for employees. Other nationwide brands, such as McDonald’s and KFC, are also increasing their wages. Chipotle may be raising the standard in response to competition, but it could also be a sign of limited labor in certain markets.
It remains to be seen whether the local restaurants will have hiring issues in the future as they continue to expand.
Boebekker said, “We hope people feel comfortable. Our goal is to continue [full steam ahead], and I think we are well-positioned to do just that. Also, we have been trying to hire additional people just because of how busy it has been.”