‘A major realignment’: More than 200,000 restaurant workers left the industry during the pandemic. Here’s where they went

Peter Ramsay, 40, wanted a desk job. After two decades flipping burgers and chopping vegetables, he was starting to feel it in the knees.

“I was getting too physically old to be working a cook’s line every night,” he confessed.

Nick Watson, a bartender who spent six years in one of Toronto’s busiest hotels, just wanted some peace and quiet. Earlier this year, the 39-year-old bought a home outside the city and became a florist.

“The lockdowns gave me time to think about what made me happy and what didn’t,” he said.

These three workers are among the 205,800 Canadians who left their jobs in the food service industry during the COVID-19 pandemic and started anew.

Since March 2020, when thousands of businesses closed and millions of Canadians lost their jobs, the national labour force has undergone a seismic transformation spurred by droves of workers moving from one sector of the economy to another. In pursuit of higher earnings, job security and a change of scenery, they’ve taken up new jobs in new industries while leaving their old work behind.

Employment is at its highest point during the pandemic — higher, even, than it was in the months leading up to it — but job vacancies have surged in hospitality and retail while employment has grown in professional services and finance.

The labour force has not been depleted so much as it has been rearranged. If the U.S. is experiencing what some economists have called a “Great Resignation,” with millions of Americans quitting their jobs in exchange for self-employment, the Canadian economy may be facing something more like a “Great Realignment.”

Nowhere are labour shortages as severe as they are in Canada’s food services sector, which relies heavily on cheap labour and rapid turnover to turn a profit. Statistics Canada reported 196,100 job vacancies in the sector last September, according to the most recent data, and economists say the mass departures could change the very nature of the industry.

It’s what the Canadian Centre for Policy Alternatives is calling a “major sectoral realignment.”

“It’s not that restaurant workers are refusing to return to work; quite the opposite,” said CCPA economist David Macdonald in a recent study.

“They definitely do want to work, but they’ve already gotten a job in another sector — perhaps one that pays better.”

The CCPA study found that workers in low-wage jobs were moving to higher-paying sectors while job vacancy rates were twice as likely to be driven by low-wage industries.

In December, Statistics Canada reported a net gain of 153,700 new jobs across the economy, marking the sixth consecutive month of job growth. Surprisingly, there are now more people working than there were in February 2020, before the pandemic took hold.

The professional services sector alone — consisting of secretaries, office administrators and clerks — has gained a whopping 187,600 workers since the beginning of the pandemic. Finance, insurance and real estate firms have welcomed 78,500 new employees over the same period.

Meanwhile, workers have rapidly left jobs in food services, agriculture, construction and warehousing.

Some 600,000 food service employees lost their jobs early on in the pandemic, and only 65 per cent of those workers have returned in the 22 months since.

What has been a difficult time for restaurant owners has, in some instances, marked a period of notable prosperity for some workers.

The lifting of COVID-19 restrictions last summer, following the third wave of the pandemic, set off a spate of hiring that forced employers to compete for workers by advertising stronger hourly pay, sometimes with signing or retention bonuses.

Rather than seek higher wages in the same industry, though, economists have detected a rise in workers seeking occupations with a history of attractive pay.

Ramsay left his job as a chef in Toronto’s Parkdale neighbourhood after visiting his parents back in Walkerton, Ont. He caught up with some friends from high school, one of whom offered him a job as an office administrator at his roofing repair company.

It seemed like an odd fit at first, but Ramsay soon discovered his skills were surprisingly transferable. He’d done similar clerical work while opening restaurants and managing their finances.

After two decades spent standing in a kitchen, he relished the chance to sit at a desk. Even better, his starting salary “is where my restaurant wages would have topped out,” he said.

Brendon Bernard, an economist at Indeed.ca, noted a rise in the number of workers who typically earn low wages joining occupations with higher wages.

Between November 2019 and 2021, the percentage of workers with high-school diplomas or less working low-wage jobs declined to 39 per cent from 42 per cent, according to Statistics Canada. The percentage who joined higher-wage occupations rose to 21 per cent from 18.7 per cent.

Indeed, the numbers show that professions with higher pay and relative entrance accessibility have welcomed a wave of new entrants over the course of the pandemic.

Between 2020 and 2021, the number of real estate agents in Toronto grew 10 per cent to about 63,000 members, according to figures from the Toronto Regional Real Estate Board. Data from Statistics Canada shows that the number of workers in educational services has grown by 93,100 since February 2020.

Labour shortages aren’t new to the hospitality and food services sector. Before the pandemic, economists started noticing hints of a decline in workers entering hospitality jobs.

Tourism HR, which conducts research on hospitality firms across Canada, found a 16 per cent drop in people who viewed hospitality as a viable career option since 2017. Between 2018 and 2020, the food services and accommodations sector lost 5,700 workers; not much, compared to the losses incurred during the pandemic, but enough to detect a shift.

The sector has long struggled to retain workers when the business model overwhelmingly relies on low wages and a lack of job security, said University of Guelph professor Bruce McAdams, who managed a restaurant in the ’90s and found line cooks and pastry chefs routinely difficult to attract.

Labour rights are loosely enforced within the industry, while long shifts, few breaks and unpleasant bosses are not particularly uncommon, he said.

“There’s more to be done (to win back workers) than I think the industry fully realizes,” said McAdams, a professor of Hospitality, Food and Tourism Management. “We’re talking about a significant overhaul of a business model that hasn’t changed in half a century.”

That model isn’t so attractive to young workers anymore.

Hein joined the restaurant industry in her twenties while travelling the world. She picked up service jobs in London, Abu Dhabi and Melbourne to keep a steady income before returning to Toronto just before the pandemic to spend time with family.

COVID-19 upended her reliance on hospitality work. She was laid off during the first Ontario lockdown and applied for emergency government worker benefits.

Her decision to switch industries, she said, was in part due to federal subsidies. The monthly $2,000 cheque from the Canada Emergency Response Benefit gave her time to enrol in an online boot camp for wannabe-coders that ran 12 hours a day, six days a week. Soon enough, she’d conquered JavaScript and joined a boutique development agency that now lets her work anywhere she wants.

“I feel really valued now as an employee,” she said. “Just the concept of having benefits is kind of amazing.”

By the time he was laid off in March 2020, Watson was experiencing what he would later realize was burnout. A combination of long hours, customer relations and late nights left him in a perpetual state of exhaustion.

When he started as a bartender 15 years ago, he “just kind of fell in love with the business.”

“Engaging with guests, creating cocktails behind the bar. Sometimes I still miss that endorphin rush of working a really busy shift,” he said.

Since becoming a florist in Bracebridge, Ont., where he now owns a home with his partner, he’s had time to reflect.

“My job made me so miserable without really recognizing it. I just accepted all these things — attitude from upper management, long hours with no breaks, low compensation — because people just think that’s the way it is in the industry. I feel a lot happier now, not being a part of all that.”

Amidst a rapidly shrinking workforce, hospitality businesses should start viewing employees as “internal customers,” McAdams said.

“They’re going to have to redesign how their workers operate: more breaks, better hours, better scheduling. They need to be at least as focused on being a great employer as they are on being a great burger joint.”

In the past year, some restaurants and bars have gone beyond wage hikes, implementing benefits packages to boost retention.

Hilary Drago, manager of Pizzeria Libretto in Toronto, raised hourly wages for her staff above inflation and introduced a health and dental plan that includes physiotherapy, massage therapy and mental health services.

For restaurants operating on thin margins, the increased labour expense comes with trade-offs; not all firms can afford to strengthen their workforce and boost pay without incurring losses of their own.

Menu prices at Pizzeria Libretto are increasing, Drago said. “If we’re going to pay people more money, which they deserve, then those labour costs have to go into the price of the menu.”

Since business restrictions were lifted over the summer, industry groups have campaigned intensively for policy changes designed to maintain the sector’s low-wage model.

In October, Restaurants Canada called on Ottawa to extend work visas for a year while expanding the Temporary Foreign Worker Program, a system that allows businesses to hire workers from other countries at a lower cost.

The lobbying has produced some success. Earlier in January, the Quebec government doubled the admission rate of temporary foreign workers for certain employers in the province to address labour shortages.

But an expansion of low-wage programs will not be enough to overcome the growing deficit of Canadian restaurant workers, said McAdams. Provinces cap the number of migrant workers allowed in small businesses so that Canadian workers remain the dominant hiring pool. Firms with debt incurred during the pandemic will still have to attract workers, all while repaying government loans.

Over the next five to 10 years, he anticipates the food service industry will shrink as smaller hospitality businesses buckle under the weight of increased debt and expenses.

“It’s going to be a challenging environment for the next several years, for sure,” he said.

Meanwhile, for some of the workers who left, the pandemic sparked an encouraging new chapter in their professional lives.

“I used to feel so disposable at work,” said Hein, who knew nothing about coding two years ago, but now earns a starting salary of $50,000 as a full-stack developer. “Now I feel like I have all this opportunity ahead of me.”