Hospitality business Professor Jeffery Elsworth sat down with me to discuss what this recession has done for local restaurants, local businesses, and what the forecast for young entrepreneurs will be for the next coming years..
Alyssa Firth: What do you teach at MSU and for how long have you been teaching here?
Jeffery Elsworth: I’ve been teaching here since 2001 and I teach hospitality business courses. I teach hospitality business entrepreneurship which is both a introductory course and an advanced course. I teach food and beverage management, which is what we call the gateway course for restaurant management. I teach facilities and maintenance systems for hospitality business. I teach quality for hospitality industry. I have taught advance food service and have taught food safety and nutrition. I also teach a food safety and security for the restaurant industry module for the food safety and toxicology center.
AF: What’s your background in business?
JE: I ran restaurants. I graduated from Purdue in 1981 and ran restaurants until 1996. Actually, I started running restaurants in 1976 and I stopped running restaurants in 1996.
AF: How as the economy when you worked for those restaurants?
JE: You know it was actually pretty bad. When I was in Texas in the ‘80s, and that’s when you know the oil economy and the gas rationing and you know, the economy was bad. There were a whole lot of people from the Michigan area that were living in Texas and a lot of them were without jobs. I had a lot of people in the oil industry either in, not so much corporate, but in supportive roles that were working for me in the restaurant because they couldn’t find jobs and used to make more. So, it wasn’t really that great an economy at the time, but it did get, you now, you see the ebbs and flows and the waves, but nothing like this recession. Unemployment rate was high, inflation was high, at that time.
AF: How do you think the unemployment rate in Michigan affects restaurants right now?
JE: It affects everybody and restaurants aren’t any different. We’ve had the choice to hire people who maybe we would never have go to hire before. We’ve been able to retain people that may have looked for other jobs before because they had other skills, but just because you have a bunch of out of work, like auto workers or office workers or whatever, that doesn’t make them good people to work in the restaurant industry. So the people that you need to run a restaurant have to be the right person anyway, and that’s always going to be a struggle. The restaurant industry is not a easy industry. I would say that in some ways, in terms of finding staff, it hasn’t necessarily helped in terms of finding the best staff. But there’s been a lot of businesses to go out of business too, so that’s hurt the restaurant industry. We’ve probably lost four or five restaurants here in Lansing. Who knows if they would’ve stayed open anyway?
AF: I know this is a really broad question, but what do you think Michigan needs in terms of creating jobs?
JE: I think the biggest step that we need to take is change the atmosphere for businesses in Michigan. And entrepreneurship, it’s a big, I mean it’s one of my big hot spots, and it’s a big focus, I think, for the new governor and his administration, so we’ll see how that works out. I think basically up until now there’s been kind of a mentality that people here work for other people, we work for big companies. General Motors, Ford, Steel Case, you know, whoever, and those jobs were just always going to be there and now that those jobs aren’t there, we’ve had to get more of that entrepreneurial spirit that actually existed in Michigan in the ‘20s and the turn of the 20th century. It’s gonna be a long road back, but I think we’ve taken the right steps. They have to make business more attractive in Michigan. I don’t necessarily mean you have to have tax incentives or things like that. I just think there has to be more of a willingness to help a company succeed.
AF: Would you say local or franchise businesses have suffered more in this recession?
JE: The thing is franchise businesses are local businesses. For the most part, those companies may have the corporate backing in terms of marketing, but they don’t have the corporate backing in terms of money for the most part. So they both struggle pretty much the same. I think actually if you look at the big picture, the franchise companies have had more trouble being successful, but only because they’re more willing to cut their losses quicker. For instance if you see a restaurant close, like there was a restaurant in Okemos called Wild Wing Cafe. That was a franchise. It’s a franchise based out of Mt. Pleasant, Michigan. The franchise company was based out of South Carolina, but the company that owned the franchise was based out of Mt. Pleasant, Michigan. They just didn’t make it. I don’t know exactly the reasons, probably just the fact that they couldn’t attract enough business to stay open based on how much they spent in terms of remodeling and things like that, but that same location has got a Leo’s Lodge, which is a local company and this is their third restaurant. But they have a lot of local history and it just remains to see whether the investment they made in that building can be recouped or not and if they stay in business. I think that Wild Wings, had it been somebody who had owned it here locally, they may have tried to make it work longer than a year, but because it’s a franchise, they probably signed a one-year agreement and just decided, “Okay, it’s not working, so we need to get out.” I think that happens a lot, so I think they struggle equally, but I think you see franchise are more willing to cut their losses.
AF: Do you think entrepreneurs have a chance in Michigan?
JE: I think they have a great chance. I mean there’s no better incentives that exist. Just when I started doing this entrepreneurship research, teaching, and the service part of it, just about five years ago, I mean there was nothing. And now there are contests, there are business plan competitions, there are workshops. I mean this week is extreme entrepreneurship week. Today they’re doing a big event down at the Hannah Community Center in East Lansing for extreme entrepreneurship tour. The whole month of November is about entrepreneurship and there’s no better time in Michigan than now. There’s so much support, whether it’s the things U of M do, what happens at Central Michigan, Grand Valley State, and obviously Michigan State. Right now with the transitioning government it’s a little dicey, but I think there’s a lot of support in both the Granholm administration and the new administration.
AF: What do you think about the GM plant in Lansing hiring 600 more workers?
It’s only been a year and a half with GM under rebuild, so I think it’s another one of those, you know, we can’t just trust that GM is going to solve all our problems cause they’re not. In a flash, they could decide that that Cadillac they’re gonna make could be a horrible failure and they’ll have to completely shut down that initiative they’re trying to set up now. They’ve tried smaller Cadillacs at least twice in their history before and both of them failed miserably. To think this one will be a success just because Cadillac seems to be doing well isn’t necessarily true. So I hope that it means more jobs. I hope that it means more allied jobs that come with it. There’s a lot of growth out on the West side of town, a lot of it associated with little, independent restaurants, bars, things like that, so it could help, but I think it’s a little soon to be jumping up and down about it.
AF: Do you think residents in Michigan should stick it out and wait for this recession to end or should they be looking in other states for jobs?
JE: I don’t care whether there’s a recession or not, every person has to look at their own opportunities. Part of the problem with people in general, whether it’s with Michigan or Wisconsin or wherever, is they have the tendency to manage their own risk and their risk usually involves they want to stay close to what they know. When I graduated college, I had never been anywhere except maybe Florida and Indiana, so I’d been in a little circle and maybe down to Florida. I’d never been to Texas, I’d never been to Arizona. I mean I took a risk. I could’ve went to work in Chicago. I had job opportunities in Indianapolis and Chicago, but I chose to go to Phoenix, Arizona because the opportunity was there. Young people are gonna always take that opportunity. People that have roots or connections and can’t get away or they own a house that they can’t sell, then probably gonna try to stick it out. I don’t really think it’s a matter of should you stick it out or should you go. It’s a personal issue and I always tell all the students, if you know what you want and you want to go work for that company and that’s the industry you want to be in or the segment of the industry you want to be in, then you have to be willing to move. I mean I moved like seven times in seven years and most of the time it was in the same place. I’d be in one place for six months and move, for six months and move.
AF: Do you think we’ll be out of this recession soon or will we still lag behind the rest of the country?
JE: Michigan will continue to lag for at least a short amount of time only because we’re so behind now that there’s no way it’s gonna get any better. It’ll get better over time. We’ll eventually catch up I think and get back. For awhile, anyway, we’re going to be that percentage point higher in unemployment and the percentage point lower in growth until we start to see some spring back in the total U.S. economy. Then we’ll probably start to gradually pick up a little bit. Even states that are doing really well, like Indiana,economy wise they’re doing pretty well, they’ve got a pretty good tax base, but they’re still higher on unemployment rate than most other states and they still have a little smaller growth than most other states. They don’t have near that natural resources that Michigan has, so I think it is just a matter of time.