Full-service restaurants continue to struggle to reach pre-pandemic numbers, after 2024 ended with significant job growth in the leisure and hospitality industry.
The sector added 172,500 jobs last year, but this outcome paled in comparison to the 309,000 jobs added in 2023. NRA analysts attributed the drop to “nearly four years of catching up from pandemic-induced job losses.”
The NRA surmised that “significant differences still exist by segment,” pointing to the full-service restaurant segment, which had experienced the most significant job losses during the first few months of the pandemic and was still experiencing “the longest path to recovery.”
Impact of Minimum Wage Hikes
While the restaurant industry continues to take small steps toward returning to pre-pandemic levels, some are concerned that an increasing number of states imposing higher minimum wage levels in 2025 will slow that progress.“Restaurants are opening all the time, but we’re having a hard time in Missouri,” Buddy Lahl, CEO of the Missouri Restaurant Association (MRA), told The Epoch Times.
Lahl is a plaintiff in a lawsuit against Proposition A, passed in November, raising the minimum wage in Missouri to $13.75 on Jan. 1, with new mandatory sick pay laws also included. As part of Proposition A, the minimum wage in Missouri will be raised again, to $15, on Jan. 1, 2026.
“When you add costs to an employer, you have to raise costs for the customer. The smaller ones on the bubble are going to struggle. When you’re a restaurant and you finally begin to make financial headway and get a devastating blow like this, it especially hurts the small businesses,” Lahl said, adding that two family-owned restaurants in Missouri, in business for more than 20 years, have already closed since the law was passed.
Lahl and the MRA are suing the state over a perceived election violation in passing Proposition A. The case is expected to go to the Missouri Supreme Court next month, with a decision expected before May 1.
The NRA said that while restaurant employment edged higher nationally last year, job growth was uneven across states. Twenty-four states and the District of Columbia had fewer restaurant jobs than in November 2019. Maryland has lost the most restaurant jobs since 2019, down 7.2 percent.
Lahl said it’s difficult to view the restaurant industry as a single entity. Smaller and larger restaurants, chains, fast food, and casual dining are experiencing different employment scenarios and are also affected differently when a minimum wage is raised.
With many restaurants trying to make do with fewer employees, Lahl also pointed to a difference in restaurants adapting to new technology needed to serve customers.
“Quick-serve restaurants adapt to tech faster than fine dining, for instance. Casual service is just now starting to adapt, but at the end of the day, you can never replace the human factor,” he said.
