Oil economy hits service industry

Posted at 10:59 AM, Apr 14, 2016
and last updated 2016-04-14 20:32:35-04

Bakersfield businesses are struggling, saying their clients are no longer indulging due to low oil prices. This is causing restaurants and other service providers to shift their models and cut employee hours to try to turn a profit.

Cafe Med, a popular Mediterranean restaurant, has lost about 15% of their business compared to the same time last year, Deli Manager Kim Fannon said.

"Labor is always a challenge, trying to figure out how many people you'll need if it's going to be slow or busy and of course with minimum wage increasing, costs of food are going up, costs of labor are going up, but we can't raise our prices," Fannon said.

Fannon said they're combating the loss of big oil clients who bring large parties, by providing more value-based items to the menu and cutting employee hours.

"We haven't had to lay anybody off, but sometimes shifts may be cut a little shorter or maybe fewer shifts during the week, it just depends," Fannon said.

Across town at Meadows Field, the Bakersfield Jet Center is also pinching pennies.

"You know we're down probably about, especially in the charter business, we see the decrease there first," CEO Steven Loyd said.

Loyd said business is down about 5-10% on the charter side and in fuel sales. "It's definitely affected us, it's definitely not as bad as it was in 2007- 08" Loyd said.

The Bakersfield Jet Center has been around since 1958, and has never laid any employees off, but in 2007-2008 they took a 10% pay cut.

Businesses are confident this is just part of the cycle and say crude prices will return. "So as the oil fields start rebounding, which they will, it just feeds downstream to everybody in Kern County, in Bakersfield," Loyd said.