The Scary Truth About Dallas’ Employment Growth

Lucas Buckels
Dec 3, 2018 · 7 min read

The word of the moment is incredibly simple but endlessly complex: jobs. Politicians, economists, news analysts, radio jockeys and even Facebook feeds, all constantly slap us in the face with an empty excitement over this four-letter word. Dallas-Fort Worth is far from being the manufacturing capital of the United States and even farther from a place where we’re told that “jobs are being shipped overseas.” Instead, the large job growth in DFW has louder overtones for what’s soon to happen, in the coming years, for the U.S. economy and employment.

Courtesy | Bureau of Labor Statistics

In May, the Bureau of Labor Statistics released data for the Dallas-Fort Worth-Arlington Metropolitan Statistical Area revealing “from May 2017 to May 2018, local nonfarm employment rose 3.4 percent (up 122,000 over the year), compared to the national rate of 1.6 percent.” At face value, that doesn’t seem to throw up any red flags or entice caution. However, the bigger problem is that the “where” in this increase of employment is going largely ignored, dismissed and disregarded with excitement just for the fact that employment numbers are up as a whole. Actually, it’s not that local media isn’t talking about it. It’s that the conversation they’re having isn’t focused where it needs to be focused.

In the past two years, Dallas Morning News’ analysis of each new rendition of the Bureau of Labor Statistics employment data boasts a pride in Dallas’ booming employment growth for besting the 12 biggest metropolitan areas in the nation. However, when we turn to why Dallas’ numbers are growing, DMN most often gives a one sentence nod and a watered down explanation. Most of the focus has been an interpretation on what that rise in jobs means for the consumer and not for those that are actually consumed with the growth. The job growth that Dallas-Fort Worth is most consistently seeing falls into the leisure and hospitality industry; more specifically, the service industry. Of those 122,000 jobs that were added between May 2017 and May 2018, ~17,400 fell within the Leisure and Hospitality industry with ~10,100 of those jobs falling within the largest sector, food service and drinking places. On percentage alone, DFW nearly tripled the national growth of 1.6 percent.

In DFW, leisure and hospitality job growth far exceeds the national average.

It’s not a secret that Dallas loves going out to eat and drink. Multiple times a year a “Hot Take” appears, explaining how people in Dallas spend the most on food and booze. It’s THOSE hot takes that are further fueled by DMN’s vague dismissals of “economists often use leisure and hospitality job growth as a signal that families feel comfortable spending money on fun.” Yes. They’re right. Dallasites spend, on average, a higher percentage of their annual take home income going out to eat and drinking alcohol. But service industry employees are being dismissed and framed as a byproduct of this notion.

DMN also speculates that the industry with the second largest growth, professional and business services, may be the culprit, “a sign that the restaurants and bars that serve all those new office workers are expanding quickly to keep up.”

But that may not be it at all. Dallas turns over new restaurants hand-over-fist with some concepts struggling to survive even a full fiscal year. These new and shiny concepts keep us distracted long enough before another takes their place. Developers aren’t looking at national chain and fast casual/quick-service restaurants to fill their developments, either. On April 25, Subway announced that they will be closing 500 stores by the end of this calendar year. They aren’t alone. Other fast-food franchises have been closing doors nationwide, as well. Their problem? Rising labor costs and high turnover.

“So many restaurants, not enough people. If someone has a bad day at one of our restaurants, they just walk across the street and take the same job at another restaurant.” — Jay Jerrier, owner of Cane Rosso and Zoli’s. High turnover isn’t a new phenomenon in the service industry, though, and it’s rare that turnover is due to movement out of the industry entirely. But there is a new high turnover phenomenon, and it involves the labor needed to keep all these concepts open.

“2017 and 2018 are the ‘year of the ghost,’” says Jay Jerrier, owner of 12 restaurants (Cane Rosso, Zoli’s, Cow Tipping Creamery) in DFW, Houston and Austin. “We’ve had staff at every conceivable level — from manager to line cook to pizza-maker to busser to dishwasher — either no-call, no-show for a shift, for an interview or actually just vanish during their shift. As in, they take out the trash and never come back. Staffing is absolutely our biggest challenge — either we can’t find enough employees or the unqualified people we do find have extremely high pay expectations.”

As the market becomes increasingly saturated, locally owned bars and restaurants can’t keep their businesses staffed. Wages and hours afforded for available shifts need to stay low in order for any profit to occur, which creates a competitive market where its inhabitants have to hustle to survive — and where dozens of other restaurants are eager to swoop in and steal away talent. “At the Star, other restaurant managers stalk the parking lot looking for cooks/servers getting off their shifts. It’s like Vegas where those guys are handing out strip joint coupons 24/7,” Jerrier says.

“Most of our restaurants are (thankfully) busy, so we have people that may even take lower salary to be someplace where they don’t have to hustle,” Jerrier says. “This has been the worst couple of years I’ve seen since I’ve been doing this.”

Even though the market is in employees’ favor, that doesn’t mean the industry is rolling out the red carpet to keep talent. There are a number of private Facebook groups in DFW that are solely dedicated to service industry workers announcing job openings or looking for work. Most of the time, these service industry workers already have another job — or several jobs — in order for them to get as close as possible to 40 hours of work and a livable wage, usually without any sort of benefits or savings and retirement plan.

Yet, here we are. Distracted by smoke and mirrors of an increase in employment without a semblance of understanding of the potential effects this will have. We have shiny new restaurants to constantly be excited about. We have old restaurants that we claim to revere closing for us to be upset about. And in between, we have employees in our city and community job-hopping in order to pay their bills and keep their heads above water.

From dishwashers to hosts, Dallas restaurant owners say it’s harder than ever to find and retain talent.

Courtesy | Bureau of Labor Statistics

Bloomberg is even making the assumption that if employment trends continue as they have in both industries of manufacturing and food services and drinking places, the latter will pass the former by February 2020. Dallas isn’t just keeping up with that possibility. We’re setting the benchmark for the nation and we’re setting the stage for the world to see that restaurants are the new factories. All the while, service industry employees are taking home drastically less.

You know that point in a movie when everything seems to be going well but you know that some shit’s about to go sideways? This is that moment. Jobs are rapidly being created in an industry with one of, if not the most humanly-diverse workforces (for now). Maybe it’s the amount of expendable income in DFW that is driving job creation. Maybe it’s the new jobs in other industries. Maybe it’s developer driven.

What we do know is that DFW’s current job growth in the largest growing industry and sector in the nation will have even larger problems for those that will be employed in that industry — problems that the public has to be ready to discuss and address. So, if we start focusing on the actual workforce now, then we’ll be better positioned to control and/or alleviate these growing problems that are barreling toward Act 2.

“It’s a very stressful world — rent prices are ridiculous, staff wants high hourly wages, food cost fluctuates wildly, so much ‘mixed use development’ from Deep Ellum to Prosper with a ton of restaurant square footage,” Jerrier says. “It just creates a Wild West environment where employees can bounce from job to job to job for years.”

But, where will this leave that growing number of employees?

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