There’s a faded help wanted sign in the storefront of Billingsgate in Noe Valley seeking a worker to help staff the neighborhood seafood market and restaurant.
At this point, the display serves more as decor than an effective advertisement. According to Esteban Macias, the shop’s co-owner and manager, he’s been waiting two years to fill the position. With tips, the job pays around $30 an hour.
Macias was hoping for someone with strong English skills and experience working with seafood, but only a handful of résumés have come in in recent months. The candidates that do apply generally don’t meet the standards Macias is seeking.
But he’s starting to get desperate: Without help, he and his nephew are left working regular 12-hour shifts. He plans to bring in a new candidate over the weekend whose only real job experience is working at a local drug store.
“It’s really hard, I just told him to show up and watch what I do for work. If he’s interested, he can join,” Macias said. “That’s really my only option right now.”
Skeleton Crew
Macias’ struggle is typical of a labor shortage in San Francisco that’s left local restaurants and shop owners hamstrung as they struggle to recover from the pandemic.
Business owners say the situation has evolved since the initial rush to staff up when they were permitted to reopen indoors. Now, the trouble is finding qualified workers who want to commit. Small skeleton crews that might include an owner and a relative are faced with the options of grueling hours or scaling back their operations.
San Francisco’s unemployment rate of 2.2% is sitting near record lows. Yet there are fewer people working in the city after the pandemic: Preliminary data from the state labor department shows nearly 10,000 fewer people working in San Francisco June 2022 than were working in June 2019.
Ted Egan, the city’s chief economist, attributes the labor crunch partly to outmigration during the pandemic. An outflow of residents collided with pandemic-related shutdowns in the local restaurant and hospitality sector: Between 2019 and 2021, that sector bled around 42,000 jobs, according to data from the U.S. Bureau of Labor Statistics. Many of these workers left and never came back.
The mass outmigration has subsided, according to more recent data. But one of the city’s main sources of new residents—immigrants from other countries—has also slowed to a trickle due to federal immigration policies.
During the pandemic, the Trump administration curbed immigration visas and immigration into San Francisco plummeted. Between July 2018 and July 2019, net immigration into the city was about 4,700 people. That figure barely topped 800 people from July 2020 to July 2021.
Rami Balat, the owner of Subs Inc. down the street from Billingsgate, cited the immigration slowdown as one of the main barriers to hiring. Because of a lack of candidates, Balat said he’s had to find ways to be more efficient. That means buying ingredients that were once homemade, cutting his hours of operation and drafting his retired 72-year-old father to help out in the shop.
“There’s 100% more pressure and we’ve got to figure out how to solve these issues without looking for more help,” he said.
More Customers, Few Workers
The shop, which has operated for 16 years, saw a boost in customers during the pandemic as the shift to remote work meant more residents in the neighborhood looking for lunch options. But that bump in business coincided with a short supply of job candidates, even with a pay bump meant to help employees deal with the impacts of inflation.
Those who do apply are generally coming in with less experience and with a greater willingness to walk off the job if confronted about performance or work issues.
According to the Bureau of Labor Statistics, workers in the leisure and hospitality category, which includes food service workers, have seen among the highest quit rate levels and total employees quitting their job.
“I can’t justify paying the same wage for a high school student as an adult,” Balat said. “Some people need training; some people need skills-building and it’s hard to me to afford top-dollar wages for lower quality work.”
Back when he originally opened his shop, Balat said he might have asked his extended family to pitch in on staffing. But a lack of affordable housing has driven much of his network out of the city, or into a career that doesn’t include food service.
The San Francisco metro area is the most expensive region in the country, according to the National Low Income Housing Coalition, which found that a household needs to earn $61.50 per hour to rent a modest two bedroom apartment. That’s simply out of reach for many restaurant workers, who generally earn in the range of $20 to $30 per hour.
As a point of comparison, the national average hourly wage to afford a two-bedroom apartment is $25.82. For California, the figure is $39.01.
A New Normal
The compounding challenges of labor and changing consumer behavior has led some businesses to change course entirely.
Before March 2020, Café brand was flying high with three San Francisco outlets and one in Los Angeles. Now they’re down to one location in Noe Valley, a move that manager Hector Perez said was necessary to bring a level of stability for staff and customers.
The shop currently only does to-go service, which made the most sense in light of customer preferences and the needs of delivery apps. Plus, the pandemic has just made day-to-day business a lot less predictable.
Perez said the café is considering reopening its indoor dining room—customers have been asking—but first, he has to find the staff. Having shifted to take-out, many restaurants have decided to give up on indoor seating, he added.
“It’s kind of sad in my opinion because you’re removing that kind of interaction, that front of the house piece that makes it possible to connect with your customers,” said Perez.