- Employment in restaurants, bars, and cafes fell in August for the first time since April 2020.
- Jobs in the sector had been growing steadily between May 2020 and July 2021.
- Experts said the Delta variant was largely to blame for August’s disappointing payrolls report.
- See more stories on Insider’s business page.
Employment in US restaurants, cafes, and bars fell in August for the first time since April 2020 as the Delta variant of the coronavirus spread across the country.
The number of people working in food services and drinking places dropped by 42,000 in August, to 11.34 million, according to preliminary data from the US Bureau of Labor Statistics (BLS), released Friday.
This was the largest drop in employment across all nonfarm industries, including retail, healthcare, and manufacturing.
In April 2020, at the onset of the pandemic, restaurants and bars were forced to close their doors and lay off or furlough staff. Employment in the sector fell to just 6.33 million that month – but climbed every month from May 2020 to July 2021, BLS data show.
Pandemic-era employment in food services and drinking places peaked at 11.38 million in July 2021, and appeared to be on track to return to the pre-pandemic level of 12.31 million in February 2020 when it plummeted in August 2021, per BLS data.
“Delta seems to be the overwhelming factor affecting the labor market right now,” Daniel Zhao, senior economist at Glassdoor, told Insider’s Juliana Kaplan. In August 2021, 5.6 million people said they were unable to work for reasons linked to the pandemic.
Fast-food workers are “especially vulnerable” to COVID-19 community transmission, a report by UCLA and UC Berkeley found. Between July and December 2020, around 15% of Los Angeles County’s documented coronavirus workplace outbreaks were at fast-food restaurants, the report found.
There are other factors making people quit their jobs in the sector, though.
A third of former hospitality workers said in a survey by Joblist that they weren’t planning on returning to the industry because they wanted a different work setting, higher pay, better benefits, more flexibility, and remote work.
And restaurants say they’re struggling to find enough staff. The owners of Cafe Elk Grove in California told Insider that some job applicants aren’t showing up to their interviews, or are accepting jobs but not turning up for their first shift.
Every other sub-sector of the leisure and hospitality industry added jobs in August. But the drop in employment in food services and drinking places meant that employment in the industry overall remained flat in August.
Across the US economy, private employers added just 235,000 jobs to their payrolls, far below the median estimate among economists of 733,000.
“In a month where so much was riding on the August employment report, this is a major miss and screams Delta disruption,” Seema Shah, chief strategist at Principal Global Investors, said.