Angelina Narvaez got spat on when she moved away from an unmasked transit worker on a train platform. Alfonso Estevanovich is using the extra unemployment benefits to care for his father, who had a stroke. For Sophia Gasparro, the pandemic meant dealing with anxious customers. “It’s draining,” she said.

All three worked on Brooklyn’s Fifth Avenue, a once-again booming 30-block strip with some 500 restaurants, boutiques, bodegas, barber shops and other businesses. Crowds that descended on the street in recent weeks have found understaffed restaurants and “Help Wanted” signs.

Business owners are paying workers more and holding back on growth plans. “It’s not impossible to find people, just really, really hard,” said Rafi Hasid, who says the labor shortage might slow his plan to expand Miriam, his Middle Eastern restaurant.

A Memorial Day crowd waited to be seated at Park Slope eatery Miriam.

A Memorial Day crowd waited to be seated at Park Slope eatery Miriam.

Last spring, Mr. Hasid shut down and put the restaurant’s fresh food on tables on the sidewalk for neighbors to take. Now, Miriam and other restaurants can’t keep up with demand, especially when Fifth Avenue closes to traffic on Saturdays.

The Wall Street Journal has followed Fifth Avenue since the start of the pandemic. The street has gone from ghost town to the site of major Black Lives Matter protests to the current rebound, which is one of the strongest in the city.

So far in 2021, the city Health Department has received 22 applications for new restaurants in the strip’s two ZIP Codes, more than any other comparably sized shopping district outside of Manhattan. Brooklyn’s Fifth Avenue is bouncing back faster because it is surrounded by affluent neighborhoods and doesn’t rely heavily on tourists or office workers, as many Manhattan areas do.

Being in the vanguard of the rebound has meant that Fifth Avenue’s labor shortage, which began building in early spring, is worse than most other areas of the city.

Ms. Narvaez returned to work in March as a cashier and waitress at Skyice, a Thai restaurant on Fifth Avenue. During the pandemic, she and her husband moved in with his family in the suburbs about 35 miles from the restaurant.

The commute takes more than two hours, on top of long days to make up for the short staff. She tries to avoid unmasked people on the trains and once when she moved away from a transit worker, he spat on her, she says. “After a 10-hour working shift, I get spit on,” she said. “That’s why it’s hard to find employees: because people are not feeling safe.”

Mr. Estevanovich, who was a bartender at Wolf & Deer on Fifth Avenue, has been moving between the U.S. and Costa Rica, where he cares for his stroke-stricken father. “I’m actually saving more money because I’m not doing as much,” he said. “When I was working, I was spending all this money.”

‘Help Wanted’ signs posted along Fifth Avenue.

‘Help Wanted’ signs posted along Fifth Avenue.

Dealing with anxious customers during the pandemic led Ms. Gasparro to leave her job as manager of Bhoomki, a small womenswear boutique, and take a job at an online retailer. “There’s been a collective trauma from Covid,” Ms. Gasparro said. “Either they’re totally shut down and don’t want to talk to me. Or they tell me everything that’s been going on in their lives for 45 minutes because they’ve been cooped up for one year.”

The demographics of the area around Fifth Avenue and the impact of the pandemic are factors in the labor shortage. Fifth Avenue begins at the Barclays Center, where the Brooklyn Nets are drawing big crowds for NBA playoff games. It runs through Park Slope, a well-off neighborhood where Covid-19 cases were relatively low and residents have plenty of disposable income for eating out.

Only 2% of the neighborhood’s residents also worked there before the pandemic, while two-thirds of them commuted to Manhattan, according to Census Bureau figures.

Of the 20,000 people who worked around Fifth Avenue, hundreds came from nearby neighborhoods where income was well below the level of Park Slope.

Miriam’s owner says he is paying cooks at the restaurant 8% to 10% more than he did before the pandemic.

Miriam’s owner says he is paying cooks at the restaurant 8% to 10% more than he did before the pandemic.

More than 300 workers came from the Ocean Hill-Brownsville neighborhood, which with a median household income of $26,521 is one of the poorest in the city, Census data show. That neighborhood had twice the rate of positive tests as the Park Slope area.

What is happening on Fifth Avenue reflects the national trends of labor shortages, with the lack of available child care, additional unemployment benefits and ongoing worries about the risk of infection among the factors that may be keeping people from rejoining the workforce. Friday’s monthly employment report from the Labor Department showed the U.S. economy gained fewer jobs than economists expected in May—the second month in a row that has happened—in part because businesses have been struggling to fill positions as potential workers remain on the sidelines. Wages also grew by more than expected in May.

Mr. Hasid said he is paying cooks at Miriam 8% to 10% more than before the pandemic. “We’re eating some of the cost now. But some of it we’ll have to pass over to customers,” he said.

Steakhouse manager David Hill says many aspiring theater performers, who typically might be waiting on tables, have left the city.

Steakhouse manager David Hill says many aspiring theater performers, who typically might be waiting on tables, have left the city.

The pandemic shutdown of theaters in New York chased away many young performers who were waiting on tables to pay the bills. David Hill, the manager of Benchmark, a steakhouse just off Brooklyn’s Fifth Avenue, estimated that before the coronavirus arrived about half of his staff fell in this “younger people with dreams” category.

“There’s not a workforce anymore,” said Mr. Hill. “And the ones who were here took off during Covid.” He said he is hoping that they return with the opening of Broadway, which is scheduled for the fall.

Now, he is hiring whomever he can get. Last month, Mr. Hill was at a neighborhood bodega complaining to the owner about staffing. A young man in the shop said he was looking for work. He said he had just come to New York from California with his girlfriend, who is taking theater classes.

Mr. Hill hired him on the spot. “I said come by tomorrow,” Mr. Hill said. The young man is now a bartender at Benchmark. “We got lucky,” Mr. Hill said.

Write to Peter Grant at peter.grant@wsj.com and Justin Lahart at justin.lahart@wsj.com