6 ms·

A Worker Shortage Is Forcing Restaurants to Get Creative

11 points by dmm 9y ago

dmm 9y ago
> Our industry is very much in need of a temporary visa program for the low-skilled, essential workers I think this is interesting because I hear a lot about a shortage of tech workers and the consensus I hear is that there really isn't a shortage, employers need to pay more. Or they need to offer training. But here is another industry facing labor shortages. Is it really a shortage? My impression of restaurant work is that the kitchen staff get paid less and work more than the wait staff and there is little room for advancement, other than starting your own restaurant. > I think millennials are really focused on quality of life Ha! As opposed to what? Working really hard for some reason?
- CocaKoala 9y ago
  You cut off your quote too early! > He has also tried to clean up the kitchen in other ways. “You can’t come to work and scream at people,” he said. “When I was a younger chef, that was how I interacted with my team. My god, imagine the horror of not being able to come into work and just scream at your employees.
- derivagral 9y ago
  With the VC and profit margins of the headliners, asking a tech firm to pay more "feels normal". My understanding is that most restaurants aren't in a position to pay much more; are the urban demographics different enough to support such a thing?
  - mtmail 9y ago
    The article describes growth in the number of restaurants (and thus customer demand, more people dining out), so restaurants could increase prices.
  - Thriptic 9y ago
    If you can't afford to pay enough to retain labor, you need to charge more for your products or give labor equity. If you can't make money doing this (ROI not good enough if equity is diluted or people won't pay more for what you're selling) then you should not be in business.
  - jmagoon 9y ago
    The issue I have with restaurants saying they cant pay more is that FOH staff often bring in close to 10x of BOH. So there's actually plenty of money to go around, it just comes in the form of a mandatory 20% tip to a single person. Eliminate tipping, raise your prices, pay all your employees on an equivalent scale, give them healthcare and vacation time, and watch the "shortage" go away.
- samlevine 9y ago
  The labor market is tight, near full employment. In very constrained locations (like SF) wages for kitchen staff have gone up significantly. Other places it's just hard to find people to do the job for what the market will bear. We're reaching the point where we seriously need to think about assisting internal migration in the country, but before that can kick in we'll end up with a recession to fight off inflation.
  - mc32 9y ago
    The founder of BET is saying that this tight labor market has enabled people who previously were chronically unemployed to become employable in this economy. It's not that we don't have able bodies available, we do, what we don't have is people already trained in a skill set available for cheap. We have people who could be trained, and we're seeing that, and we're seeing a reduction in undocumented labor undercutting legal labor. This is good for the American worker, even as the price of goods may rise marginally.
    - coldcode 9y ago
      Also often the more marginal workers who do want to work have no cheap way to get to where the work is. In a world of Uber buses get eliminated, and the poor cannot get to work.
- j-c-hewitt 9y ago
  In general a lot of these cities in the US have a tacit agreement with these kinds of businesses that they are allowed to violate labor regulations, health regulations, immigration regulations, wage regulations, so that they are able to provide lots of labor intensive services in high cost regions. If the municipal government wants to shut down any restaurant in the city, they can under a panoply of pretexts. If the Federal government is allowed to enforce the various Federal laws and regulations being ignored, it can also. A vibrant restaurant culture is a nice-to-have, not a must-have. These municipal leaders cannot talk out of one side of their mouths about the wonders of a well-regulated economy and then out of the other side demand the privilege to apply those regulations inconsistently in a corrupt fashion. Considering that there are too many restaurants in many of these cities with failure rates in the stratosphere and profits questionable except at the most hyper-successful locations, this is not a bad thing for such an industry to contract to correct the oversupply. Notice in the article itself that it talks about restaurants turning to 'unconventional' labor pools like ex-addicts, ex-cons, underemployed veterans, and people they have fired before because it is no longer so easy to violate labor and immigration regulations with impunity. Is that so bad? Does this not solve more general problems internal to our society rather than trying to paper over them by importing more people?
justherefortart 9y ago
Try profit sharing.
- vorpalhex 9y ago
  We had a restaurant near us that ran as a co-op. The food was good, the service was OK (it was very self-serve, which was fine, but it was communicated poorly...), but they repeatedly could not stay afloat or manage a budget over a long time period. That's obviously just an anecdotal example, but I don't know of any co-ops aside from REI that seem to really stick around and do well longterm.
hkarthik 9y ago
Seems like they should just raise prices on the food to control demand and provide additional capital for paying workers. Basic economics 101. What am I missing here?
- crdoconnor 9y ago
  Restaurant customers are quite sensitive to price increases. This is why restaurants sometimes reduce the size of meals instead of raising prices. In any case, the real reason for the article and its complaints about a "tight" labor market is to lobby for low wage immigration: "Our industry is very much in need of a temporary visa program for the low-skilled, essential workers,” said Shannon Meade, the National Restaurant Association’s director of labor and work force policy. " Translation : pretty please send cheap labor our way; our profit margins aren't high enough.
  - mc32 9y ago
    Pretty much that. Then we go full circle and need to add additional services to support people who need to take two hubs to survive. Switzerland seems to have achieved some balance in this regard. Japan too, although their wages are artificially depressed via other means.
  - jmagoon 9y ago
    Yep. Having worked in the restaurant industry, it also means they don't want to pay healthcare, give sick / vacation time, or even hire enough employees to cover all shifts. ("Oops, no one is scheduled for tonight, guess you have to work a double!") It's way easier to exploit temp visa workers who are a missed shift away from getting deported. I actually really loved working in a kitchen but it's absurd how bad the labor conditions are.
- garrettdc 9y ago
  Price elasticity of demand IIRC. Demand functions aren't generally straight like the illustrative graphs used in intro classes. What you end up with is easy replacement with similar goods. Being able to differentiate goods in food-service seems like a very difficult proposition without some sort of brand recognition. Because of that, if someone can purchase some food that is equal or close enough to equal at a significant (significance as defined by the consumer utility) then they will go with the cheaper option. While raising prices seems like the simple solution to this issue, the reality is likely that they would quickly - if not immediately - price themselves out of the market.
chrischen 9y ago
I was disappointed none of the creative ways included using robots or machines like in Japan.
goda90 9y ago
This may be a local phenomenon caused by bad ownership or management, but the fast food restaurants near me have really been struggling to stay well staffed, resulting in them no longer being "fast". It seems like some of them are propped up by the brand and cheap prices instead of acceptable service. I wonder if there is a reduction in the number of teens and college students seeking out these kinds of jobs. Maybe teens just don't get jobs anymore, and college students don't have time to work for a wage that'll barely cover their living expenses
egypturnash 9y ago
So I’m just saying, over here in the other Washington, Seattle has raised the minimum wage. And after a bunch of whining about how it was going to ruin their margins, restaurants have raised their prices, and everything continues the same as before. Maybe DC restaurants could, I dunno, raise their prices a little and pay their staff enough to get by? Nah. It’ll never work.
- twoodfin 9y ago
  How do you think the folks for whom dining represents a significant expense feel about these raised prices? Everyone talks about the minimum wage’s effects (or not) on employment, but I’d be way more concerned with its (potentially very regressive) effects on prices.
  - williamstein 9y ago
    I live in Seattle. Prices for food have indeed gone up a lot. There are clearly still a lot of people here who can afford it, based on how very busy the (good) restaurants still are.
  - nicoburns 9y ago
    I mean eating out is a luxury, right? Better to be paid a decent wage and have the option to avoid the luxury than not to have the money in the first place.
  - s73v3r_ 9y ago
    But without raising it, the people making minimum wage are struggling to afford the costs of living as is.
    - theandrewbailey 9y ago
      Most people who make minimum wage are members of multi-income households (like teenagers or spouses working part-time), and don't have any problem with costs of living.
pg_bot 9y ago
Here is a mix of things likely to when there is a shift in the economic equilibrium for labor. This is true for all industries and not just the restaurant industry. - Increase wages/benefits of workers (increased prices for customers) - Substitute capital for labor (buy more machinery) - Increase the supply of workers by training new people - Close unprofitable businesses
AdamM12 9y ago
Having worked in the restaurant industry (Bus boy, expo, and server) for 5 yrs from HS to College to shortly after there has always been these problems. People think the grass is always greener at another place an will switch jobs after 2 months, maybe even only a couple weeks, well before they have built up enough institutional knowledge (menu details in order to effectively sell, ways to ring up common and edge case special preps, where supplies are in store, build rapport with frequent guests, etc.) to make them truly effective at their job and make consistent money. Restaurateurs complaining about their servers bad service is a failure of management to adequately train (seen this is action), albeit I've seen long time servers who had plenty of the institutional knowledge to do their jobs but refuse to do simple things like pre-bus a table. Edit: Forgot to mention. This is maybe the 2nd or 3rd article where I've read that towns/industries have looked to recruit out of prison/jail. This imo is a good thing.
RcouF1uZ4gsC 9y ago
For jobs that don't require years of training, you really don't have "worker shortages". If you pay more, you will find people willing to work. I have come to see "worker shortage" as shorthand for businesses saying "we would like to pay people less" and advocating some sort of (typically government) intervention to drive up the supply of labor and thereby decrease wages (in this case allow more temporary immigrant workers who can more easily be taken advantage of and paid less).
rootedbox 9y ago
Everyone is delaying the inevitable.. Pay more to workers.. raise prices.. some folks will eat out less. 20 years ago.. eating out was not a daily thing.
marak830 9y ago
"The more experienced workers, she said, are attracted to the increasing number of Washington restaurants with high-profile chefs, leaving midlevel establishments like hers struggling with inexperienced and often fickle help." That's because chefs and restaurants like me actually: pay over minimum, train staff and actually treat them like humans. Not like cattle or worse. One of my (admitably) many pet peeves in this industry is "restaurants" complaining that they can't get top talent for peanuts, and wondering why, for example, my place is full while theirs struggles to meet basic cost. Yeah having a 200 seat, cater to everyone with super low prices('it attracts customers!') seems like a great idea, until they actually try it.

11 points by dmm 9y ago

dmm 9y ago

> Our industry is very much in need of a temporary visa program for the low-skilled, essential workers I think this is interesting because I hear a lot about a shortage of tech workers and the consensus I hear is that there really isn't a shortage, employers need to pay more. Or they need to offer training. But here is another industry facing labor shortages. Is it really a shortage? My impression of restaurant work is that the kitchen staff get paid less and work more than the wait staff and there is little room for advancement, other than starting your own restaurant. > I think millennials are really focused on quality of life Ha! As opposed to what? Working really hard for some reason?

CocaKoala 9y ago
You cut off your quote too early! > He has also tried to clean up the kitchen in other ways. “You can’t come to work and scream at people,” he said. “When I was a younger chef, that was how I interacted with my team. My god, imagine the horror of not being able to come into work and just scream at your employees.
derivagral 9y ago
With the VC and profit margins of the headliners, asking a tech firm to pay more "feels normal". My understanding is that most restaurants aren't in a position to pay much more; are the urban demographics different enough to support such a thing?
- mtmail 9y ago
  The article describes growth in the number of restaurants (and thus customer demand, more people dining out), so restaurants could increase prices.
- Thriptic 9y ago
  If you can't afford to pay enough to retain labor, you need to charge more for your products or give labor equity. If you can't make money doing this (ROI not good enough if equity is diluted or people won't pay more for what you're selling) then you should not be in business.
- jmagoon 9y ago
  The issue I have with restaurants saying they cant pay more is that FOH staff often bring in close to 10x of BOH. So there's actually plenty of money to go around, it just comes in the form of a mandatory 20% tip to a single person. Eliminate tipping, raise your prices, pay all your employees on an equivalent scale, give them healthcare and vacation time, and watch the "shortage" go away.
samlevine 9y ago
The labor market is tight, near full employment. In very constrained locations (like SF) wages for kitchen staff have gone up significantly. Other places it's just hard to find people to do the job for what the market will bear. We're reaching the point where we seriously need to think about assisting internal migration in the country, but before that can kick in we'll end up with a recession to fight off inflation.
- mc32 9y ago
  The founder of BET is saying that this tight labor market has enabled people who previously were chronically unemployed to become employable in this economy. It's not that we don't have able bodies available, we do, what we don't have is people already trained in a skill set available for cheap. We have people who could be trained, and we're seeing that, and we're seeing a reduction in undocumented labor undercutting legal labor. This is good for the American worker, even as the price of goods may rise marginally.
  - coldcode 9y ago
    Also often the more marginal workers who do want to work have no cheap way to get to where the work is. In a world of Uber buses get eliminated, and the poor cannot get to work.
j-c-hewitt 9y ago
In general a lot of these cities in the US have a tacit agreement with these kinds of businesses that they are allowed to violate labor regulations, health regulations, immigration regulations, wage regulations, so that they are able to provide lots of labor intensive services in high cost regions. If the municipal government wants to shut down any restaurant in the city, they can under a panoply of pretexts. If the Federal government is allowed to enforce the various Federal laws and regulations being ignored, it can also. A vibrant restaurant culture is a nice-to-have, not a must-have. These municipal leaders cannot talk out of one side of their mouths about the wonders of a well-regulated economy and then out of the other side demand the privilege to apply those regulations inconsistently in a corrupt fashion. Considering that there are too many restaurants in many of these cities with failure rates in the stratosphere and profits questionable except at the most hyper-successful locations, this is not a bad thing for such an industry to contract to correct the oversupply. Notice in the article itself that it talks about restaurants turning to 'unconventional' labor pools like ex-addicts, ex-cons, underemployed veterans, and people they have fired before because it is no longer so easy to violate labor and immigration regulations with impunity. Is that so bad? Does this not solve more general problems internal to our society rather than trying to paper over them by importing more people?

justherefortart 9y ago

Try profit sharing.

vorpalhex 9y ago
We had a restaurant near us that ran as a co-op. The food was good, the service was OK (it was very self-serve, which was fine, but it was communicated poorly...), but they repeatedly could not stay afloat or manage a budget over a long time period. That's obviously just an anecdotal example, but I don't know of any co-ops aside from REI that seem to really stick around and do well longterm.

hkarthik 9y ago

Seems like they should just raise prices on the food to control demand and provide additional capital for paying workers. Basic economics 101. What am I missing here?

crdoconnor 9y ago
Restaurant customers are quite sensitive to price increases. This is why restaurants sometimes reduce the size of meals instead of raising prices. In any case, the real reason for the article and its complaints about a "tight" labor market is to lobby for low wage immigration: "Our industry is very much in need of a temporary visa program for the low-skilled, essential workers,” said Shannon Meade, the National Restaurant Association’s director of labor and work force policy. " Translation : pretty please send cheap labor our way; our profit margins aren't high enough.
- mc32 9y ago
  Pretty much that. Then we go full circle and need to add additional services to support people who need to take two hubs to survive. Switzerland seems to have achieved some balance in this regard. Japan too, although their wages are artificially depressed via other means.
- jmagoon 9y ago
  Yep. Having worked in the restaurant industry, it also means they don't want to pay healthcare, give sick / vacation time, or even hire enough employees to cover all shifts. ("Oops, no one is scheduled for tonight, guess you have to work a double!") It's way easier to exploit temp visa workers who are a missed shift away from getting deported. I actually really loved working in a kitchen but it's absurd how bad the labor conditions are.
garrettdc 9y ago
Price elasticity of demand IIRC. Demand functions aren't generally straight like the illustrative graphs used in intro classes. What you end up with is easy replacement with similar goods. Being able to differentiate goods in food-service seems like a very difficult proposition without some sort of brand recognition. Because of that, if someone can purchase some food that is equal or close enough to equal at a significant (significance as defined by the consumer utility) then they will go with the cheaper option. While raising prices seems like the simple solution to this issue, the reality is likely that they would quickly - if not immediately - price themselves out of the market.

chrischen 9y ago

I was disappointed none of the creative ways included using robots or machines like in Japan.

goda90 9y ago

This may be a local phenomenon caused by bad ownership or management, but the fast food restaurants near me have really been struggling to stay well staffed, resulting in them no longer being "fast". It seems like some of them are propped up by the brand and cheap prices instead of acceptable service. I wonder if there is a reduction in the number of teens and college students seeking out these kinds of jobs. Maybe teens just don't get jobs anymore, and college students don't have time to work for a wage that'll barely cover their living expenses

egypturnash 9y ago

So I’m just saying, over here in the other Washington, Seattle has raised the minimum wage. And after a bunch of whining about how it was going to ruin their margins, restaurants have raised their prices, and everything continues the same as before. Maybe DC restaurants could, I dunno, raise their prices a little and pay their staff enough to get by? Nah. It’ll never work.

twoodfin 9y ago
How do you think the folks for whom dining represents a significant expense feel about these raised prices? Everyone talks about the minimum wage’s effects (or not) on employment, but I’d be way more concerned with its (potentially very regressive) effects on prices.
- williamstein 9y ago
  I live in Seattle. Prices for food have indeed gone up a lot. There are clearly still a lot of people here who can afford it, based on how very busy the (good) restaurants still are.
- nicoburns 9y ago
  I mean eating out is a luxury, right? Better to be paid a decent wage and have the option to avoid the luxury than not to have the money in the first place.
- s73v3r_ 9y ago
  But without raising it, the people making minimum wage are struggling to afford the costs of living as is.
  - theandrewbailey 9y ago
    Most people who make minimum wage are members of multi-income households (like teenagers or spouses working part-time), and don't have any problem with costs of living.

pg_bot 9y ago

Here is a mix of things likely to when there is a shift in the economic equilibrium for labor. This is true for all industries and not just the restaurant industry. - Increase wages/benefits of workers (increased prices for customers) - Substitute capital for labor (buy more machinery) - Increase the supply of workers by training new people - Close unprofitable businesses

AdamM12 9y ago

Having worked in the restaurant industry (Bus boy, expo, and server) for 5 yrs from HS to College to shortly after there has always been these problems. People think the grass is always greener at another place an will switch jobs after 2 months, maybe even only a couple weeks, well before they have built up enough institutional knowledge (menu details in order to effectively sell, ways to ring up common and edge case special preps, where supplies are in store, build rapport with frequent guests, etc.) to make them truly effective at their job and make consistent money. Restaurateurs complaining about their servers bad service is a failure of management to adequately train (seen this is action), albeit I've seen long time servers who had plenty of the institutional knowledge to do their jobs but refuse to do simple things like pre-bus a table. Edit: Forgot to mention. This is maybe the 2nd or 3rd article where I've read that towns/industries have looked to recruit out of prison/jail. This imo is a good thing.

RcouF1uZ4gsC 9y ago

For jobs that don't require years of training, you really don't have "worker shortages". If you pay more, you will find people willing to work. I have come to see "worker shortage" as shorthand for businesses saying "we would like to pay people less" and advocating some sort of (typically government) intervention to drive up the supply of labor and thereby decrease wages (in this case allow more temporary immigrant workers who can more easily be taken advantage of and paid less).

rootedbox 9y ago

Everyone is delaying the inevitable.. Pay more to workers.. raise prices.. some folks will eat out less. 20 years ago.. eating out was not a daily thing.

marak830 9y ago

"The more experienced workers, she said, are attracted to the increasing number of Washington restaurants with high-profile chefs, leaving midlevel establishments like hers struggling with inexperienced and often fickle help." That's because chefs and restaurants like me actually: pay over minimum, train staff and actually treat them like humans. Not like cattle or worse. One of my (admitably) many pet peeves in this industry is "restaurants" complaining that they can't get top talent for peanuts, and wondering why, for example, my place is full while theirs struggles to meet basic cost. Yeah having a 200 seat, cater to everyone with super low prices('it attracts customers!') seems like a great idea, until they actually try it.