New York City restaurants are being crushed by the current labor shortage and may take months to get enough staff, Shake Shack founder Danny Meyer said

Restaurateur Danny Meyer
  • Restaurants in NYC are struggling to hire new staff, Shake Shack founder Danny Meyer told CNBC.
  • It could take months for restaurants to recruit enough staff to properly function, Meyer said.
  • Many hospitality staff left the city during the pandemic, while others swapped industries, he said.
  • See more stories on Insider’s business page.

New York City restaurants are being crushed by the US’ current labor shortage – and it could take months for them to reach proper staffing levels, restaurateur Danny Meyer told CNBC’s “Closing Bell” Wednesday.

“Nobody can hire back all of their workers even if they wanted to because many of our workers have left the city,” Meyer said. He founded Shake Shack and is the CEO Union Square Hospitality Group, the parent company of New York City hotspots Union Square Cafe and Gramercy Tavern.

Many restaurant workers left NYC because they couldn’t afford to live there without their usual wages during the pandemic, Meyer said. He added that many laid-off staff got jobs in other industries “that were actually doing quite well during COVID,” and may not return to hospitality.

Read more: 
Shake Shack founder’s investment fund led a $21.5 million raise for a tech tool that keeps good restaurant workers from quitting amid an extreme labor shortage

The fast-food industry is facing a crushing labor shortage, causing restaurant chains such as Subway and Dunkin’ to cut opening hours and close dining rooms.

Chipotle, Taco Bell, and others are offering lucrative perks such as cash bonuses, raises, and education benefits to attract new staff. A McDonald’s restaurant is even offering free iPhones to new hires.

“Everybody is hiring at the exact same time,” Meyer, who also chairs the NYC Economic Development Corporation, said.

“It is going to take, in my judgement, at least two or three months for supply and demand to keep up with each other and to hit an equilibrium,” he added.

The scramble for workers comes after Union Square Hospitality Group laid off 2,000 workers – or four in five staff – last March when the pandemic hit and New York banned dine-in services.

Meyer told CNBC Wednesday that the group’s 18 restaurants across New York were mainly open, apart from some in hotels and art museums, as well as one in a skyscraper.

Because people were still working from home, the lunch business was “pretty much off the table,” meaning that workers often only have to staff one shift.

He said he expected this to pick up as Broadway and other concerts return and people continue to get vaccinated.

“Vaccination has probably been the greatest thing that has happened for our industry, both for the people who work for us and for our guests,” he said.

Meyer added that there’s “absolutely no shortage of demand for New Yorkers to go out.” The shift to outdoor dining, which he expects to become a “permanent part of the landscape,” means that restaurants can have more seats and so serve more customers, he added.