CEO of Landry’s and owner of the NBA’s Houston Rockets Tilman Fertitta said Tuesday on CNBC’s “Power Lunch” that businesses are having a hard time finding enough workers because enhanced unemployment benefits Congress passed to combat the coronavirus pandemic’s impact on the economy are now discouraging out-of-work Americans from taking jobs.
Anchor Tyler Mathisen asked, “What have you learned, and what can the country take away from Texas’s approach to COVID and what Texas has done and experienced?”
Fertitta said, “Well, it’s really amazing, and looking at like the month of April, we’re up 2% in revenue, compared to 19, which is the highest in the nation for all of our business. What’s interesting is New York is down 50%, and yet we have a fewer cases percentage. So everybody criticized Governor Abbott for opening this up last May. We’ve been open. So obviously, it was the right decision, but now what we’re all fighting, of course, is there’s no employees out there, and now you’ve got the new American Jobs Act for the infrastructure that is going to make the labor market even tougher. What’s amazing, Tyler, is our average wage for non-tipped employees is $14.50 an hour. Our problem running at 6% to 7% unemployment that 6% to 7% doesn’t want a job. You can get a job in any industry you want basically right now.”
Mathisen said, “I really agree with you on that, because you see ads and you see banners at stores and whether it is Bed Bath & Beyond, or a Target or a local restaurant, or a big national chain like yours, people are looking for workers. Do you attribute most of that inability to attract workers to the ideas that workers are receiving and riding on unemployment benefits?”
Fertitta said, “One hundred percent. It is the extra $300 a week. When I first said this on CNBC a few weeks ago. Everybody looked at me like I was crazy, and then they all realized that this is what’s happening. There is no employees out there. We are offering bonuses everywhere. At the same time, my casinos are having record-breaking months, okay. That’s stimulus, guys. That’s where your money is going. It’s going out there to all of your high-end department stores, your Louis Vuittons, your Chanels, all your high-end steakhouses, all your high-end hotels. In the last week, I have traveled to Philly, to New York to L.A., and I see what is going out there, and it’s not just Houston. People are spending money everywhere.”
Mathisen said, “I think I’m hearing you say we do not have an employment recession in the country, number one. Number two, the extended unemployment benefits, well-intentioned though they may be is actually retarding a full recovery.”
Fertitta said, “One-hundred percent. What’s happening now — you’re getting ready to have huge inflation for the consumer because the people in the slaughterhouses, the people raising the chickens, the people raising your produce, they can’t find employees, so they can only produce so much, so what happens? They raise the price to the consumer businesses like mine, which is retail, which is restaurants, which is hotels, and on and on and on, then what happens? We have to raise the price to the consumer. We have to pay more, so therefore you’ve built yourself in the inflation that you always wanted, it looks like.”
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