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Tahoe's hiring crisis is unraveling small businesses during its busiest season

56 points by MilnerRoute 5y ago

hmsshagatsea 5y ago
Honestly, I think this is good for Tahoe in the long run. The NIMBYs who constantly block development are getting a taste of their own medicine. When they’re finally fed up with the low staff and poor service they’ll see the need for affordable housing.
- ed25519FUUU 5y ago
  When the elephants fight the grass gets trampled.
  - underseacables 5y ago
    when two elephant make love or war it is the grass that suffers
    - BrianOnHN 5y ago
      I love elephants
  - anonuser123456 5y ago
    Elephant dung fertilizes the grass and is necessary for long term health of the plain. Just saying...
- spaetzleesser 5y ago
  Or do the unfathomable: Pay people better.
  - PaulDavisThe1st 5y ago
    That's not likely to change the housing situation that appears to be the fundamental problem in this case.
  - listless 5y ago
    I don’t understand the “pay people more” sentiment. It _seems_ like the correct and obvious solution, but it seems like it just moves the goal line. Margins are razor thin in restaurants specifically. If you pay people more, you’ll need to raise your prices and that will offset the pay raise if it happens across the board. What am I missing?
    - labawi 5y ago
      Exports, tourists, buyers of inflated properties (income) CEOs, managers, capitalist rent-seekers (outflow)
    - HarryHirsch 5y ago
      The fact that rents could drop but a readjustment of the value of real estate cannot be allowed to happen.
    - deleted 5y ago
      [deleted]
    - over_bridge 5y ago
      I suppose for a restaurant specifically, the people who work there and who eat there are very different. If higher wages leads to higher unit price, its not the worker paying that difference, its the wealthier customers. Of course in the general case, the places the workers do shop at, probably supermarkets, will notice that people have more money to spend and will likely try to capture that extra money for themselves - either because demand of certain items increases or just plain greed. So continues the endless, exhausting and unwinnable battle between wages and inflation
      - spaetzleesser 5y ago
        "its not the worker paying that difference, its the wealthier customers." Exactly.
        listless 5y ago
        What if it becomes widespread? And every restaurant raises wages to attract workers while also raising prices? In other words, we need some people to be paid very little to produce the cheap food for these hire paid food service workers. Where is the bottom?
  - Chickenosaurus 5y ago
    Paying more can entice people to commute, but there is still no housing. The real solution is more housing.
- SilasX 5y ago
  Yeah this comes up a lot in /r/LeopardsAteMyFace on reddit. Example thread (about this happening in the Hamptons): https://www.reddit.com/r/LeopardsAteMyFace/comments/o9mbz8/the_rich_in_the_hamptons_drove_up_prices_even/ https://www.reddit.com/r/LeopardsAteMyFace/comments/o9mbz8/t...
- ryandrake 5y ago
  When I watched the movie Elysium, I always wondered where the restaurant workers, hotel housekeepers, and other service workers on the station lived. Maybe it was all automated. If the rich want to have these rich-only enclaves, they're gonna need to learn how to be a little more self sufficient.
EMM_386 5y ago
This is becoming a problem in many areas, and I can't imagine that the push for remote work is going to help the situation any. Unless you are living with parents, or with multiple roommates, the housing market in these cities will price you out. We have this same scenario taking place in the area I live, and NIMBY/zoning laws prevent affordable housing from being developed. I've been to town hall meetings where people decry "affordable housing" as bringing Section 8 and "undesirables" to the area. You mention that even the local school teachers have to commute in from over an hour away due to afford a place to live, but it falls on deaf ears. If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc.
- JumpCrisscross 5y ago
  > NIMBY/zoning laws prevent affordable housing from being developed Jackson Hole reserves some housing for those who work full time for an employer in Teton County [1]. This strikes me as a reasonable balance between wanting to control housing stock and maintaining access to cheap labour. [1] https://www.tetoncountywy.gov/720/Workforce-Homes https://www.tetoncountywy.gov/720/Workforce-Homes
  - sandworm101 5y ago
    I sold my soul to the company store. https://en.wikipedia.org/wiki/Company_scrip https://en.wikipedia.org/wiki/Company_scrip There was good reason to do away with such concepts.
    - JumpCrisscross 5y ago
      > the company store Night and day. Company doesn’t own the home. Company doesn’t own the stores you shop at.
      - sandworm101 5y ago
        Not entirely different. Any non-dollar payment takes they employee's purchasing power out of the free market. Tying one's housing options to one's employment opens the door to similar abuses as company stores. Does a fired employee loose thier housing?
axaxs 5y ago
I know this article is about Tahoe and paints a rather bleak picture...but this is nationwide. I traveled most of the east coast over the past few months, and every single city's service sectors are begging for employees. I've never seen so many fastfood places closed. And not like, boarded up, but appearing operational but having zero employees. And most weren't high cost of living areas...
- seanmcdirmid 5y ago
  I took a weekend trip to Ocean Shores Washington last weekend, and…the restaurants were all packed and wanting of long waits due to lack of servers and cooks. Resorts towns have been hit really hard, but this might also have to do with them laying off all of their staff at the start of the pandemic. Did they just expect these people to wait around?
  - GavinMcG 5y ago
    No? They expected to have a chance at surviving as a business. And many didn't.
    - seanmcdirmid 5y ago
      Surely yes, they had to make a really hard decision, though I don’t think this consequence was foreseen even if it wouldn’t have changed the decision much.
- thrower123 5y ago
  There was a marked drop-off in fast-food having rolling staffing brown-outs once school ended. High school kids flocking to the $15-$18 per hour jobs at Dunkin Donuts and McDonalds and Dairy Queen that had been sitting unfilled for months.
- andrew_ 5y ago
  Please be more nuanced in your replies when painting with a wide brush. Florida is absolutely exploding right now, and there's so much housing construction here that one can expect to wait for months for contractor availability. I've been in three of the five major FL cities in the past few months and while there are a lot of "help wanted" signs, businesses are open and busier than ever. What's hurting this region is supply chain delays and shortages, which we know are worldwide.
dboreham 5y ago
Perhaps consider paying people more.
- astura 5y ago
  Some of the businesses interview in this article claim they start their employees at $20/he but that's not enough to pay rent and too much to qualify for government assistance.
  - analyst74 5y ago
    To me that sounds like labour cost were subsidized by welfare in the past, and now needs to adjust for market realities. This causes shock to the market, but should eventually find an equilibrium.
    - astura 5y ago
      Oh yes, I don't disagree at all, food stamps, section 8/public housing, medicaid (mostly medicaid expansion), WIC, etc can often take the form of corporate welfare. Someone working full time should be able to pay life expenses without government assistance.
- lawnchair_larry 5y ago
  You can tell who knows nothing about restaurant margins...
- B2B_human 5y ago
  perhaps consider reading the article.
sneak 5y ago
https://twitter.com/LasVegasLocally/status/1416648549782024195 https://twitter.com/LasVegasLocally/status/14166485497820241... > Las Vegas gas stations are running out of gas because there aren't enough truck drivers to bring the gas here.
- Red_Leaves_Flyy 5y ago
  Anyone that isn’t currently a trucker should be staying far away from any driving jobs because they will likely be replaced in the next few decades with robots.
stitched2gethr 5y ago
> “But you know, every other week, someone loses their housing and I have to fill up the position again.” Naive view here, but isn't this an indication that the job is not paying enough for the location?
- B2B_human 5y ago
  Not naive, you just didn't read the article fully? It doesn't matter how much you're paying people - they can't find a place to live here. The CFO of company here has had to move to Arizona recently and works remotely now. I live in Truckee and this isn't just affecting temporary workers or low-paid workers. This isn't even the "well it's gonna be $3500 for a one bedroom like SF, so I'll pay up". people simply can't find places in a reasonable pricing band. Then, when they find it - the owners sell it next year and the search begins again. Anybody without a house is in a vulnerable state in this economy IMO.
SamoyedFurFluff 5y ago
Is it possible a reason behind the lack of people is also that a ton of our essential workers (aka service people) have died during the pandemic? Seriously, line cooks was one of the most fatal job positions during this time…
- h2odragon 5y ago
  Yes, the drifts of corpses in the less wealthy areas of town have been so vexing this last year. We'll probably have to import more servants, the lower classes aren't breeding fast enough anymore.
  - HarryHirsch 5y ago
    We'll probably have to import more servants, the lower classes aren't breeding fast enough anymore. Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit.
    - dragonwriter 5y ago
      > Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit. The second part is not true. As part of COVID stimulus, Congress instituted a temporary increase in the pre-existing child tax credit, and as part of making that stimulus timely made it so that a portion of the credit would be paid out monthly this year.
- dredmorbius 5y ago
  Given a near-total lack of search results for numerous terms related to this, most likely not. Avoidance of such positions for perceived risk seems more likely, as well as low pay and high stress.
- ashtonkem 5y ago
  I do genuinely doubt that the “labor shortage” is directly caused by the fatalities, but: 1) It seems obvious that the high fatality rate among line cooks and other “essential workers” has driven them out of that line of work. If my colleague died for a line cook job, I’d strongly consider changing careers. 2) We’re running into the consequences of spending a year calling these people “essential workers” and “heroes” after decades of treating them like garbage. They’ve had a taste of dignity and recognition that they’ve been denied for a long time, good luck taking it back away. 3) In many ways this looks less like a labor shortage and more like a capital strike. Unless if you’re in an area where there has been significant migration, the workers do exist and are willing to work … but not at the rates that capital is demanding that they work.
deleted 5y ago
[deleted]
underseacables 5y ago
“ Those who beat the real estate curve and bought property for their employees to live in before home prices skyrocketed are faring much better on the hiring front than their comrades.” So we are returning to factory towns? It seems the only solution is the cap rental prices, which traditionally doesn’t work. Maybe the city should be buying at the housing and providing it?
- JumpCrisscross 5y ago
  > Maybe the city should be buying at the housing and providing it? We do this in New York. It’s pork for politicians.
  - underseacables 5y ago
    Really? I thought companies owning the housing of their workforce to be a terrible thing because it could easily lead to abuse, and more likely than not will. I didn’t know that governments were already doing this… That’s depressing.
- djbebs 5y ago
  The solution is to not interfere in the market.
  - anonuser123456 5y ago
    I agree with allowing the market to function, but I also believe it needs to be coupled with a land value tax to incentivise efficient use of the land. A land value tax incentives people to build up and build in a space efficient manner.
    - skt5 5y ago
      Aren't property taxes a form of a land value tax? You could argue that property taxes aren't high enough - or priced below market value - to incentivize efficient resource allocation.
  - 5y ago
hattmall 5y ago
It's not going to change until the UI benefits and eviction moratoriums end. What person is going to go and work all day for less money?? Seriously, if you don't work right now you are getting UI, Food Stamps, and you don't have to pay rent. It literally doesn't not make economic sense to work right now for many people.
- ashtonkem 5y ago
  1) The extended UI has indeed ended in a lot of places, it’s not solved the problem. 2) If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt?
  - gotoeleven 5y ago
    >>>If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt? You mean the human condition? Life has always been this way and since we're not a post-scarcity society yet I don't see how any workable system would not be morally bankrupt by this standard.
    - ashtonkem 5y ago
      This argument is always made by the people who stand to earn exorbitant profits on the backs of those who they’re coercing to work. Maybe people would be more eager to work if the benefits were more equitably distributed?
    - legutierr 5y ago
      > we're not a post-scarcity society yet How can we be sure that we aren't? Or rather, how will we ever be able to tell whether we are living in a post-scarcity society, when artificial scarcity is imposed by those with political power? We don't have true scarcity in housing. What we have is artificial constraints on building being imposed by the state. We also don't have scarcity in basic foodstuffs. There's plenty of food. What we have is a system of distribution that requires that people exchange money for food, and the only source of money that most people have is to exchange it for their labor. We could instead just give people enough money to pay for basic food, energy and housing. There is scarcity in other things, and there will always be scarcity in some things, even in "post-scarcity" societies. Capitalist market economies are usually very efficient at allocating such resources, and people would still have the incentive to work so they can get the extra things that they want to have for themselves or their families. Capitalism can co-exist with a post-scarcity society. A workable but less "morally bankrupt" system would lower the cost of housing by using government policy to increase supply, and would give people enough cash to pay for basic food, energy and housing through a universal basic income.
spaetzleesser 5y ago
In my mind that's a symptom of rising inequality. On the one hand we are allowing housing, education, health care prices and the incomes of the top x % to rise rapidly but we also expect prices and incomes in other sectors to stay same or only rise a little. That's simply not sustainable. If you are in the lower income ranks it makes sense to check out of this system and not take these jobs. What's a a job good for if you can't afford to live with the income? In the long run I think society should accept that lower income people also should benefit from a growing economy and not just the top ranks.
spaetzleesser 5y ago
"Meanwhile, Barrios told me that his landlord is about to increase the rent on the place where he lives, from $1,100 to $1,600" How can this rent increase be justified other than with unlimited greed? And the same people are surprised that people don't want to stay in a job with stagnant wages while their costs are rising at incredible opace.
- browningstreet 5y ago
  Because the landlord heard from other landlords that they’re getting similar rates now. I moved from Reno to SF to Reno through the pandemic. Houses that were $1600 two years ago are $3000/mo now. I can afford it, sure… but it’s not really a $3000 house, the $2000 houses are even worse, and the locals getting local wages are really going to struggle to get decent housing at a decent rate. I fully expect my rent to get raised when my lease is up, and there’s little inventory to move to. It’ll just rise and rise. At some point the equity game may start to follow the GME trends and crash, but CA homeowners showing up in NV with cash are really distorting the market. And landlords are seeing their house prices go up $50-100K in 90 days and calculating what they should be charging for rent off that. A lot of these houses were bought more than 3 years ago, so the rental margins qualify more as takings than real market value.
HenryKissinger 5y ago
Landlords and property owners need to start leaving money on the table when renting out and selling real estate.
- B2B_human 5y ago
  Well....the article does mention that business owners are becoming property owners and landlords so they can make more money in their business... seems like your wish is coming true.
cushychicken 5y ago
He has one cook right now, who is working overtime and extra shifts. That cook should be asking for a raise, right now. His angle: "If you pay me more, I can probably find someone else I know to come work here."
- kvonhorn 5y ago
  I think his angle is "I can shut down the entire business if I leave."
  - cushychicken 5y ago
    Same message, more direct. My own experience suggests that carrot > stick 9/10 times when it comes to salary negotiations, however. Phrasing as an opportunity generally lands better than phrasing as a threat.
mathattack 5y ago
This seems like markets adjusting to inflation. It’s a combination of real estate NIMBYism and COVID. If the cost of real estate goes up, you have to pay people more or they move. And to pay people more you may have to charge more for the goods and services. Rent control and government owned housing tend to work less than increasing the housing stock. (Affordable housing problems only help a small fraction of people and raises the cost for everyone else slowing down new building)
- mindslight 5y ago
  > you have to pay people more or they move I wonder if the underlying cause is the discrete punch of Covid having flushed out what were otherwise marginally-unsustainable living situations. Imagine: your rent is uncomfortably high for your wage, but you're barely treading water. The one time expense of quitting your job and moving to a lower cost of living area would disrupt you too much, and so you remain even though it sucks. Then Covid hits, your job goes away, your income (if any) is now decoupled from having a specific residence, and so you move. Even if your previous job comes back, and even if they offer to pay more, you certainly aren't going to move back into that trap!
  - mathattack 5y ago
    Also less people producing things so prices rise. (Global phenomenon - this might recede here but supple is constrained globally)
sandworm101 5y ago
>> "Wilderotter starts his employees at $20 an hour." That's the entire problem. Everything is tied to pay. The reality is that nobody can get good labor, let alone good skilled labor, at 20$/hour. If your business model can only work by paying minimal wages then your businese model has failed. Labor costs, wage expectations, have gone up. That is a good thing for employees. I have little sympathy for anyone who thinks they should be brought back down.
- PaulDavisThe1st 5y ago
  I don't disagree with you here. But we need to be explicit about the implications: whole sectors of the US economy have a "failed business model" by this standard. In particular, the US model of restaurants is fundamentally based on paying minimal wages to almost all employees.
  - sandworm101 5y ago
    A restaurants greatest costs aren't labor but rent. They pay huge amounts to landlords, amounts higher than the landlords mortgage costs. A restaurants low-wage employees then pay 50+% of their wages to other landlords to cover other mortgages. That's the real problem killing the business model: too many people shovelling too much money in exchange for permission to work/live at a particular location. A more normal situation would be where rents are again cheaper than mortgages, when rent represents less than 50% of expenses. Then the restaurant business model starts making sense.
    - PaulDavisThe1st 5y ago
      This randomly selected but high-google-ranked page disagrees with you: https://www.caminofinancial.com/restaurant-costs/ https://www.caminofinancial.com/restaurant-costs/ So does this one: https://www.7shifts.com/blog/restaurant-costs/ https://www.7shifts.com/blog/restaurant-costs/ and this one: https://www.touchbistro.com/blog/restaurant-operating-costs/ https://www.touchbistro.com/blog/restaurant-operating-costs/
imtringued 5y ago
I'd like to think that instantaneous change is merely the result of a system whose true state cannot be represented during the calm years. Permanent accumulation of durable objects is a fundamental problem. Whether it is money, land or power. It's when their apparent value and their real value diverge that problems manifest. The solution has always been to let them deteriorate just like their physical counterparts. We have democracy with frequent elections to deteriorate power. We have inflation to deteriorate money. Where are the land value taxes that deteriorate land? Property taxes do exist but some states decided to freeze them, creating an extreme wealth transfer from the future to the past. The housing crisis that makes the hiring crisis inevitable has been in the making for decades. If the price to rent ratio gets insane it will have to go down eventually, all at once instead of year by year. Of course it is entirely possible that people end up waiting half a lifetime for a correction. If we want to prevent a crisis we have to do a little readjustment to reality continuously but people love to deny reality right until the moment it catches up. Let's talk about a more familiar concept: Inflation. People hate it. They hate it so much they would rather see as little inflation as possible even if it comes at the risk of even more inflation in the future. The current inflation rate is a good example. It's high. It's definitively too high for a single year. However, when you look at the past 10 years it is just right. It's not high enough to raise interest rates because we have a lot of inflation to catch up on. We are like a student that forgot to do his homework and now has to do twice as much. The housing market has a lot of catching up to do and when it happens it won't be pretty. Corrections are inevitable, we can only shift their date. I would argue that healthy markets merely correct themselves very frequently so the impact of every single correction is perceived to be insignificant.
aazaa 5y ago
> “You put an ad out and nobody even interviews,” Wilderotter said, echoing Barrios. That's because you're not offering enough money. Raise it by 20%, 50%, 200%. Keep raising it until you get qualified applicants. You will eventually find a price that attracts the people your business needs. And if that price is too high to turn a profit and there's no other way, shut down. Article after article with business owners acting like they're entitled to pay workers sub-market and/or sub-living wages. Time to wake up and face the fact that large sectors of the service economy are no longer viable due to decades of misreported inflation, trickle-down economics, and disastrous, unchecked monetary policy blunders.
- ActorNightly 5y ago
  The issue is that a lot of places are ran on thin profit margins. You would have to raise the price of goods, which then means you have to raise the quality of goods as well to outcompete highly optimized chain restaurants.
  - seanp2k2 5y ago
    So the alternative seems to be…don’t do that, and be short-staffed while paying those who do continue to show up poverty-level wages for an ever-increasing workload. The quality of service and the reputation of the business suffers that way, causing them to fail or at least give up more business to other places that are raising prices accordingly.
  - zepto 5y ago
    > outcompete highly optimized chain restaurants. This makes no sense in context. Highly optimized chain restaurants are not known for paying waitstaff high wages.
  - xref 5y ago
    > You would have to raise the price of goods, which then means you have to raise the quality of goods You use the same ingredients as the day before: “This is the price of a steak in Lake Tahoe now.”
  - 5y ago
okareaman 5y ago
I find it bizarre that the article doesn't mention immigration and how brutal ICE policies are discouraging seasonal workers from coming. I know someone who manages a restaurant in California. All the cooks are of Mexican descent. Obviously they are taking jobs no one else wants.
olliej 5y ago
It sounds like businesses don’t won’t to participate in a free market economy. If no one is applying for your jobs offer more money, that’s how supply and demand works.
zackbloom 5y ago
> “We literally do not have enough cooks to operate and after months of continuous hiring, training, begging, pleading and getting creative, we have a tiny, loyal, incredible team of individuals at their breaking point and in desperate need of help,” the owners wrote. I'm genuinely not being facetious: why don't they pay more? Isn't that the solution to a labor shortage in a free market?
- spaetzleesser 5y ago
  Modern economics seems to believe that CEOs can only be motivated by more and more money. But low income people get lazy and spoiled if they make more money.
- bradlys 5y ago
  Because they’d rather complain than pay better wages. It’s easier to shove the problem onto the local government than it is to have them pay their own wages. This is common among all industries/businesses. Have the masses pay - not your business.
- deleted 5y ago
  [deleted]
hvocode 5y ago
I’ve seen the same thing occurring in central Oregon in spots that usually are busy in the summer. You see places closing early or not opening due to staffing issues, right in the middle of the busy season when people are over there vacationing. It’s caught me by surprise when I noticed things like the grocery store closing super early, or cafes being closed on days they’d usually be open, all with signs on the door saying that it’s due to staffing shortages.
jmspring 5y ago
Living about 45 minutes north of Tahoe, the article is spot on in highlighting housing being an issue. Near by areas like Reno, Plumas County, etc. have seen rents and housing prices skyrocket. My condo in plumas has doubled in value in less than 5 years. There is another aspect to this though. Before I get to that, employers here in my small town are trying to bend over backwards to hire people including a local restaurant owner offering to let one woman bring her young (less than a year old) child to work since childcare is scarce. Another business owner offered "make your own schedule - just need one weekend a month" as they want a weekend to themselves. At the other extreme, you have people with little or know experience demanding more (even when stores are offering $18/hr) yet when hired - they don't show up reliably, spend time on their phones, etc. At some point, the employment situation will work itself out, but there is a significant and consistent issue (across multiple fields) that a notable percentable of young people are entitled and have a crap work ethic. Just like companies wanting to pay too little and are getting bit by it, the lack of work ethic will come back to those showing such now.
rfwhyte 5y ago
Housing is the crux of this problem and is an issue so intractable, I genuinely don't see a solution. The way the housing market across much of the western world is the way that now is, is because rich people made it that way, and they have all the influence, power and control now, so nothing us small folk can do will likely change things in any meaningful way. Housing has become a commodity, an investment, and so the rich, with their sloshing, frothing waves of cash, are buying it up at an ever accelerating pace. Not buying it up so they can live in these homes mind you, but buying it up so they can extract rent, extract PROFIT from homes that are meant for people and families to live in. So now, rather than serving as a place for people to live, housing is serving as investment for the rich to get ever richer from. The real problem is that when it comes to housing, the marginal buyer is now some hyper-leveraged corporation with near limitless access to cheap capital, or some billionaire investor, who'll happily bid 50% over asking as they're planning on renting the house out for the maximum amount possible and bundling their "Assets" into a REIT, and so they'll gladly pay over asking as its just a cost of doing business. So now you've got the rich through their companies and trusts buying up entire neighborhoods, out-bidding regular folks for homes, raising rents to increase profits, and turning homes that people could once have lived in, into vacation properties and short-term rentals or worst of all letting them sit empty just so they can sell them when the value goes up. Increasing wages is one absolutely necessary step towards fixing the economy, but real wages would have to rise 100%, 500%, a even f*king 1000% in a lot of places for regular folks to actually be able to afford the kinds of homes that a family could once have afforded on a single middle class income. So literally the only thing that can fix things is to make housing worth a lot less. But that will never happen because that would cause some already fantastically wealthy people to be a little less wealthy, and the rich would rather people die and go homeless than ever be less rich.
- nate_meurer 5y ago
  > So literally the only thing that can fix things is to make housing worth a lot less. And, I'd suggest, structuring property taxes to make real estate investment less lucrative.
- twright 5y ago
  > so nothing us small folk can do will likely change things in any meaningful way A lot of people feel this way, a plurality one might even say, more is possible than despair leads us to think. “[Capitalism’s] power seems inescapable. So did the divine right of kings.”

56 points by MilnerRoute 5y ago

Honestly, I think this is good for Tahoe in the long run. The NIMBYs who constantly block development are getting a taste of their own medicine. When they’re finally fed up with the low staff and poor service they’ll see the need for affordable housing.

ed25519FUUU 5y ago
When the elephants fight the grass gets trampled.
- underseacables 5y ago
  when two elephant make love or war it is the grass that suffers
  - BrianOnHN 5y ago
    I love elephants
- anonuser123456 5y ago
  Elephant dung fertilizes the grass and is necessary for long term health of the plain. Just saying...
spaetzleesser 5y ago
Or do the unfathomable: Pay people better.
- PaulDavisThe1st 5y ago
  That's not likely to change the housing situation that appears to be the fundamental problem in this case.
- listless 5y ago
  I don’t understand the “pay people more” sentiment. It _seems_ like the correct and obvious solution, but it seems like it just moves the goal line. Margins are razor thin in restaurants specifically. If you pay people more, you’ll need to raise your prices and that will offset the pay raise if it happens across the board. What am I missing?
  - labawi 5y ago
    Exports, tourists, buyers of inflated properties (income) CEOs, managers, capitalist rent-seekers (outflow)
  - HarryHirsch 5y ago
    The fact that rents could drop but a readjustment of the value of real estate cannot be allowed to happen.
  - deleted 5y ago
    [deleted]
  - over_bridge 5y ago
    I suppose for a restaurant specifically, the people who work there and who eat there are very different. If higher wages leads to higher unit price, its not the worker paying that difference, its the wealthier customers. Of course in the general case, the places the workers do shop at, probably supermarkets, will notice that people have more money to spend and will likely try to capture that extra money for themselves - either because demand of certain items increases or just plain greed. So continues the endless, exhausting and unwinnable battle between wages and inflation
    - spaetzleesser 5y ago
      "its not the worker paying that difference, its the wealthier customers." Exactly.
      - listless 5y ago
        What if it becomes widespread? And every restaurant raises wages to attract workers while also raising prices? In other words, we need some people to be paid very little to produce the cheap food for these hire paid food service workers. Where is the bottom?
- Chickenosaurus 5y ago
  Paying more can entice people to commute, but there is still no housing. The real solution is more housing.
SilasX 5y ago
Yeah this comes up a lot in /r/LeopardsAteMyFace on reddit. Example thread (about this happening in the Hamptons): https://www.reddit.com/r/LeopardsAteMyFace/comments/o9mbz8/the_rich_in_the_hamptons_drove_up_prices_even/ https://www.reddit.com/r/LeopardsAteMyFace/comments/o9mbz8/t...
ryandrake 5y ago
When I watched the movie Elysium, I always wondered where the restaurant workers, hotel housekeepers, and other service workers on the station lived. Maybe it was all automated. If the rich want to have these rich-only enclaves, they're gonna need to learn how to be a little more self sufficient.

EMM_386 5y ago

This is becoming a problem in many areas, and I can't imagine that the push for remote work is going to help the situation any. Unless you are living with parents, or with multiple roommates, the housing market in these cities will price you out. We have this same scenario taking place in the area I live, and NIMBY/zoning laws prevent affordable housing from being developed. I've been to town hall meetings where people decry "affordable housing" as bringing Section 8 and "undesirables" to the area. You mention that even the local school teachers have to commute in from over an hour away due to afford a place to live, but it falls on deaf ears. If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc.

JumpCrisscross 5y ago
> NIMBY/zoning laws prevent affordable housing from being developed Jackson Hole reserves some housing for those who work full time for an employer in Teton County [1]. This strikes me as a reasonable balance between wanting to control housing stock and maintaining access to cheap labour. [1] https://www.tetoncountywy.gov/720/Workforce-Homes https://www.tetoncountywy.gov/720/Workforce-Homes
- sandworm101 5y ago
  I sold my soul to the company store. https://en.wikipedia.org/wiki/Company_scrip https://en.wikipedia.org/wiki/Company_scrip There was good reason to do away with such concepts.
  - JumpCrisscross 5y ago
    > the company store Night and day. Company doesn’t own the home. Company doesn’t own the stores you shop at.
    - sandworm101 5y ago
      Not entirely different. Any non-dollar payment takes they employee's purchasing power out of the free market. Tying one's housing options to one's employment opens the door to similar abuses as company stores. Does a fired employee loose thier housing?

axaxs 5y ago

I know this article is about Tahoe and paints a rather bleak picture...but this is nationwide. I traveled most of the east coast over the past few months, and every single city's service sectors are begging for employees. I've never seen so many fastfood places closed. And not like, boarded up, but appearing operational but having zero employees. And most weren't high cost of living areas...

seanmcdirmid 5y ago
I took a weekend trip to Ocean Shores Washington last weekend, and…the restaurants were all packed and wanting of long waits due to lack of servers and cooks. Resorts towns have been hit really hard, but this might also have to do with them laying off all of their staff at the start of the pandemic. Did they just expect these people to wait around?
- GavinMcG 5y ago
  No? They expected to have a chance at surviving as a business. And many didn't.
  - seanmcdirmid 5y ago
    Surely yes, they had to make a really hard decision, though I don’t think this consequence was foreseen even if it wouldn’t have changed the decision much.
thrower123 5y ago
There was a marked drop-off in fast-food having rolling staffing brown-outs once school ended. High school kids flocking to the $15-$18 per hour jobs at Dunkin Donuts and McDonalds and Dairy Queen that had been sitting unfilled for months.
andrew_ 5y ago
Please be more nuanced in your replies when painting with a wide brush. Florida is absolutely exploding right now, and there's so much housing construction here that one can expect to wait for months for contractor availability. I've been in three of the five major FL cities in the past few months and while there are a lot of "help wanted" signs, businesses are open and busier than ever. What's hurting this region is supply chain delays and shortages, which we know are worldwide.

dboreham 5y ago

Perhaps consider paying people more.

astura 5y ago
Some of the businesses interview in this article claim they start their employees at $20/he but that's not enough to pay rent and too much to qualify for government assistance.
- analyst74 5y ago
  To me that sounds like labour cost were subsidized by welfare in the past, and now needs to adjust for market realities. This causes shock to the market, but should eventually find an equilibrium.
  - astura 5y ago
    Oh yes, I don't disagree at all, food stamps, section 8/public housing, medicaid (mostly medicaid expansion), WIC, etc can often take the form of corporate welfare. Someone working full time should be able to pay life expenses without government assistance.
lawnchair_larry 5y ago
You can tell who knows nothing about restaurant margins...
B2B_human 5y ago
perhaps consider reading the article.

sneak 5y ago

https://twitter.com/LasVegasLocally/status/1416648549782024195 https://twitter.com/LasVegasLocally/status/14166485497820241... > Las Vegas gas stations are running out of gas because there aren't enough truck drivers to bring the gas here.

Red_Leaves_Flyy 5y ago
Anyone that isn’t currently a trucker should be staying far away from any driving jobs because they will likely be replaced in the next few decades with robots.

stitched2gethr 5y ago

> “But you know, every other week, someone loses their housing and I have to fill up the position again.” Naive view here, but isn't this an indication that the job is not paying enough for the location?

B2B_human 5y ago
Not naive, you just didn't read the article fully? It doesn't matter how much you're paying people - they can't find a place to live here. The CFO of company here has had to move to Arizona recently and works remotely now. I live in Truckee and this isn't just affecting temporary workers or low-paid workers. This isn't even the "well it's gonna be $3500 for a one bedroom like SF, so I'll pay up". people simply can't find places in a reasonable pricing band. Then, when they find it - the owners sell it next year and the search begins again. Anybody without a house is in a vulnerable state in this economy IMO.

SamoyedFurFluff 5y ago

Is it possible a reason behind the lack of people is also that a ton of our essential workers (aka service people) have died during the pandemic? Seriously, line cooks was one of the most fatal job positions during this time…

h2odragon 5y ago
Yes, the drifts of corpses in the less wealthy areas of town have been so vexing this last year. We'll probably have to import more servants, the lower classes aren't breeding fast enough anymore.
- HarryHirsch 5y ago
  We'll probably have to import more servants, the lower classes aren't breeding fast enough anymore. Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit.
  - dragonwriter 5y ago
    > Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit. The second part is not true. As part of COVID stimulus, Congress instituted a temporary increase in the pre-existing child tax credit, and as part of making that stimulus timely made it so that a portion of the credit would be paid out monthly this year.
dredmorbius 5y ago
Given a near-total lack of search results for numerous terms related to this, most likely not. Avoidance of such positions for perceived risk seems more likely, as well as low pay and high stress.
ashtonkem 5y ago
I do genuinely doubt that the “labor shortage” is directly caused by the fatalities, but: 1) It seems obvious that the high fatality rate among line cooks and other “essential workers” has driven them out of that line of work. If my colleague died for a line cook job, I’d strongly consider changing careers. 2) We’re running into the consequences of spending a year calling these people “essential workers” and “heroes” after decades of treating them like garbage. They’ve had a taste of dignity and recognition that they’ve been denied for a long time, good luck taking it back away. 3) In many ways this looks less like a labor shortage and more like a capital strike. Unless if you’re in an area where there has been significant migration, the workers do exist and are willing to work … but not at the rates that capital is demanding that they work.

deleted 5y ago

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underseacables 5y ago

“ Those who beat the real estate curve and bought property for their employees to live in before home prices skyrocketed are faring much better on the hiring front than their comrades.” So we are returning to factory towns? It seems the only solution is the cap rental prices, which traditionally doesn’t work. Maybe the city should be buying at the housing and providing it?

JumpCrisscross 5y ago
> Maybe the city should be buying at the housing and providing it? We do this in New York. It’s pork for politicians.
- underseacables 5y ago
  Really? I thought companies owning the housing of their workforce to be a terrible thing because it could easily lead to abuse, and more likely than not will. I didn’t know that governments were already doing this… That’s depressing.
djbebs 5y ago
The solution is to not interfere in the market.
- anonuser123456 5y ago
  I agree with allowing the market to function, but I also believe it needs to be coupled with a land value tax to incentivise efficient use of the land. A land value tax incentives people to build up and build in a space efficient manner.
  - skt5 5y ago
    Aren't property taxes a form of a land value tax? You could argue that property taxes aren't high enough - or priced below market value - to incentivize efficient resource allocation.
- 5y ago

hattmall 5y ago

It's not going to change until the UI benefits and eviction moratoriums end. What person is going to go and work all day for less money?? Seriously, if you don't work right now you are getting UI, Food Stamps, and you don't have to pay rent. It literally doesn't not make economic sense to work right now for many people.

ashtonkem 5y ago
1) The extended UI has indeed ended in a lot of places, it’s not solved the problem. 2) If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt?
- gotoeleven 5y ago
  >>>If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt? You mean the human condition? Life has always been this way and since we're not a post-scarcity society yet I don't see how any workable system would not be morally bankrupt by this standard.
  - ashtonkem 5y ago
    This argument is always made by the people who stand to earn exorbitant profits on the backs of those who they’re coercing to work. Maybe people would be more eager to work if the benefits were more equitably distributed?
  - legutierr 5y ago
    > we're not a post-scarcity society yet How can we be sure that we aren't? Or rather, how will we ever be able to tell whether we are living in a post-scarcity society, when artificial scarcity is imposed by those with political power? We don't have true scarcity in housing. What we have is artificial constraints on building being imposed by the state. We also don't have scarcity in basic foodstuffs. There's plenty of food. What we have is a system of distribution that requires that people exchange money for food, and the only source of money that most people have is to exchange it for their labor. We could instead just give people enough money to pay for basic food, energy and housing. There is scarcity in other things, and there will always be scarcity in some things, even in "post-scarcity" societies. Capitalist market economies are usually very efficient at allocating such resources, and people would still have the incentive to work so they can get the extra things that they want to have for themselves or their families. Capitalism can co-exist with a post-scarcity society. A workable but less "morally bankrupt" system would lower the cost of housing by using government policy to increase supply, and would give people enough cash to pay for basic food, energy and housing through a universal basic income.

spaetzleesser 5y ago

In my mind that's a symptom of rising inequality. On the one hand we are allowing housing, education, health care prices and the incomes of the top x % to rise rapidly but we also expect prices and incomes in other sectors to stay same or only rise a little. That's simply not sustainable. If you are in the lower income ranks it makes sense to check out of this system and not take these jobs. What's a a job good for if you can't afford to live with the income? In the long run I think society should accept that lower income people also should benefit from a growing economy and not just the top ranks.

spaetzleesser 5y ago

"Meanwhile, Barrios told me that his landlord is about to increase the rent on the place where he lives, from $1,100 to $1,600" How can this rent increase be justified other than with unlimited greed? And the same people are surprised that people don't want to stay in a job with stagnant wages while their costs are rising at incredible opace.

browningstreet 5y ago
Because the landlord heard from other landlords that they’re getting similar rates now. I moved from Reno to SF to Reno through the pandemic. Houses that were $1600 two years ago are $3000/mo now. I can afford it, sure… but it’s not really a $3000 house, the $2000 houses are even worse, and the locals getting local wages are really going to struggle to get decent housing at a decent rate. I fully expect my rent to get raised when my lease is up, and there’s little inventory to move to. It’ll just rise and rise. At some point the equity game may start to follow the GME trends and crash, but CA homeowners showing up in NV with cash are really distorting the market. And landlords are seeing their house prices go up $50-100K in 90 days and calculating what they should be charging for rent off that. A lot of these houses were bought more than 3 years ago, so the rental margins qualify more as takings than real market value.

HenryKissinger 5y ago

Landlords and property owners need to start leaving money on the table when renting out and selling real estate.

B2B_human 5y ago
Well....the article does mention that business owners are becoming property owners and landlords so they can make more money in their business... seems like your wish is coming true.

cushychicken 5y ago

He has one cook right now, who is working overtime and extra shifts. That cook should be asking for a raise, right now. His angle: "If you pay me more, I can probably find someone else I know to come work here."

kvonhorn 5y ago
I think his angle is "I can shut down the entire business if I leave."
- cushychicken 5y ago
  Same message, more direct. My own experience suggests that carrot > stick 9/10 times when it comes to salary negotiations, however. Phrasing as an opportunity generally lands better than phrasing as a threat.

mathattack 5y ago

This seems like markets adjusting to inflation. It’s a combination of real estate NIMBYism and COVID. If the cost of real estate goes up, you have to pay people more or they move. And to pay people more you may have to charge more for the goods and services. Rent control and government owned housing tend to work less than increasing the housing stock. (Affordable housing problems only help a small fraction of people and raises the cost for everyone else slowing down new building)

mindslight 5y ago
> you have to pay people more or they move I wonder if the underlying cause is the discrete punch of Covid having flushed out what were otherwise marginally-unsustainable living situations. Imagine: your rent is uncomfortably high for your wage, but you're barely treading water. The one time expense of quitting your job and moving to a lower cost of living area would disrupt you too much, and so you remain even though it sucks. Then Covid hits, your job goes away, your income (if any) is now decoupled from having a specific residence, and so you move. Even if your previous job comes back, and even if they offer to pay more, you certainly aren't going to move back into that trap!
- mathattack 5y ago
  Also less people producing things so prices rise. (Global phenomenon - this might recede here but supple is constrained globally)

sandworm101 5y ago

>> "Wilderotter starts his employees at $20 an hour." That's the entire problem. Everything is tied to pay. The reality is that nobody can get good labor, let alone good skilled labor, at 20$/hour. If your business model can only work by paying minimal wages then your businese model has failed. Labor costs, wage expectations, have gone up. That is a good thing for employees. I have little sympathy for anyone who thinks they should be brought back down.

PaulDavisThe1st 5y ago
I don't disagree with you here. But we need to be explicit about the implications: whole sectors of the US economy have a "failed business model" by this standard. In particular, the US model of restaurants is fundamentally based on paying minimal wages to almost all employees.
- sandworm101 5y ago
  A restaurants greatest costs aren't labor but rent. They pay huge amounts to landlords, amounts higher than the landlords mortgage costs. A restaurants low-wage employees then pay 50+% of their wages to other landlords to cover other mortgages. That's the real problem killing the business model: too many people shovelling too much money in exchange for permission to work/live at a particular location. A more normal situation would be where rents are again cheaper than mortgages, when rent represents less than 50% of expenses. Then the restaurant business model starts making sense.
  - PaulDavisThe1st 5y ago
    This randomly selected but high-google-ranked page disagrees with you: https://www.caminofinancial.com/restaurant-costs/ https://www.caminofinancial.com/restaurant-costs/ So does this one: https://www.7shifts.com/blog/restaurant-costs/ https://www.7shifts.com/blog/restaurant-costs/ and this one: https://www.touchbistro.com/blog/restaurant-operating-costs/ https://www.touchbistro.com/blog/restaurant-operating-costs/

imtringued 5y ago

I'd like to think that instantaneous change is merely the result of a system whose true state cannot be represented during the calm years. Permanent accumulation of durable objects is a fundamental problem. Whether it is money, land or power. It's when their apparent value and their real value diverge that problems manifest. The solution has always been to let them deteriorate just like their physical counterparts. We have democracy with frequent elections to deteriorate power. We have inflation to deteriorate money. Where are the land value taxes that deteriorate land? Property taxes do exist but some states decided to freeze them, creating an extreme wealth transfer from the future to the past. The housing crisis that makes the hiring crisis inevitable has been in the making for decades. If the price to rent ratio gets insane it will have to go down eventually, all at once instead of year by year. Of course it is entirely possible that people end up waiting half a lifetime for a correction. If we want to prevent a crisis we have to do a little readjustment to reality continuously but people love to deny reality right until the moment it catches up. Let's talk about a more familiar concept: Inflation. People hate it. They hate it so much they would rather see as little inflation as possible even if it comes at the risk of even more inflation in the future. The current inflation rate is a good example. It's high. It's definitively too high for a single year. However, when you look at the past 10 years it is just right. It's not high enough to raise interest rates because we have a lot of inflation to catch up on. We are like a student that forgot to do his homework and now has to do twice as much. The housing market has a lot of catching up to do and when it happens it won't be pretty. Corrections are inevitable, we can only shift their date. I would argue that healthy markets merely correct themselves very frequently so the impact of every single correction is perceived to be insignificant.

aazaa 5y ago

> “You put an ad out and nobody even interviews,” Wilderotter said, echoing Barrios. That's because you're not offering enough money. Raise it by 20%, 50%, 200%. Keep raising it until you get qualified applicants. You will eventually find a price that attracts the people your business needs. And if that price is too high to turn a profit and there's no other way, shut down. Article after article with business owners acting like they're entitled to pay workers sub-market and/or sub-living wages. Time to wake up and face the fact that large sectors of the service economy are no longer viable due to decades of misreported inflation, trickle-down economics, and disastrous, unchecked monetary policy blunders.

ActorNightly 5y ago
The issue is that a lot of places are ran on thin profit margins. You would have to raise the price of goods, which then means you have to raise the quality of goods as well to outcompete highly optimized chain restaurants.
- seanp2k2 5y ago
  So the alternative seems to be…don’t do that, and be short-staffed while paying those who do continue to show up poverty-level wages for an ever-increasing workload. The quality of service and the reputation of the business suffers that way, causing them to fail or at least give up more business to other places that are raising prices accordingly.
- zepto 5y ago
  > outcompete highly optimized chain restaurants. This makes no sense in context. Highly optimized chain restaurants are not known for paying waitstaff high wages.
- xref 5y ago
  > You would have to raise the price of goods, which then means you have to raise the quality of goods You use the same ingredients as the day before: “This is the price of a steak in Lake Tahoe now.”
- 5y ago

okareaman 5y ago

I find it bizarre that the article doesn't mention immigration and how brutal ICE policies are discouraging seasonal workers from coming. I know someone who manages a restaurant in California. All the cooks are of Mexican descent. Obviously they are taking jobs no one else wants.

olliej 5y ago

It sounds like businesses don’t won’t to participate in a free market economy. If no one is applying for your jobs offer more money, that’s how supply and demand works.

zackbloom 5y ago

> “We literally do not have enough cooks to operate and after months of continuous hiring, training, begging, pleading and getting creative, we have a tiny, loyal, incredible team of individuals at their breaking point and in desperate need of help,” the owners wrote. I'm genuinely not being facetious: why don't they pay more? Isn't that the solution to a labor shortage in a free market?

spaetzleesser 5y ago
Modern economics seems to believe that CEOs can only be motivated by more and more money. But low income people get lazy and spoiled if they make more money.
bradlys 5y ago
Because they’d rather complain than pay better wages. It’s easier to shove the problem onto the local government than it is to have them pay their own wages. This is common among all industries/businesses. Have the masses pay - not your business.
deleted 5y ago
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hvocode 5y ago

I’ve seen the same thing occurring in central Oregon in spots that usually are busy in the summer. You see places closing early or not opening due to staffing issues, right in the middle of the busy season when people are over there vacationing. It’s caught me by surprise when I noticed things like the grocery store closing super early, or cafes being closed on days they’d usually be open, all with signs on the door saying that it’s due to staffing shortages.

jmspring 5y ago

Living about 45 minutes north of Tahoe, the article is spot on in highlighting housing being an issue. Near by areas like Reno, Plumas County, etc. have seen rents and housing prices skyrocket. My condo in plumas has doubled in value in less than 5 years. There is another aspect to this though. Before I get to that, employers here in my small town are trying to bend over backwards to hire people including a local restaurant owner offering to let one woman bring her young (less than a year old) child to work since childcare is scarce. Another business owner offered "make your own schedule - just need one weekend a month" as they want a weekend to themselves. At the other extreme, you have people with little or know experience demanding more (even when stores are offering $18/hr) yet when hired - they don't show up reliably, spend time on their phones, etc. At some point, the employment situation will work itself out, but there is a significant and consistent issue (across multiple fields) that a notable percentable of young people are entitled and have a crap work ethic. Just like companies wanting to pay too little and are getting bit by it, the lack of work ethic will come back to those showing such now.

rfwhyte 5y ago

Housing is the crux of this problem and is an issue so intractable, I genuinely don't see a solution. The way the housing market across much of the western world is the way that now is, is because rich people made it that way, and they have all the influence, power and control now, so nothing us small folk can do will likely change things in any meaningful way. Housing has become a commodity, an investment, and so the rich, with their sloshing, frothing waves of cash, are buying it up at an ever accelerating pace. Not buying it up so they can live in these homes mind you, but buying it up so they can extract rent, extract PROFIT from homes that are meant for people and families to live in. So now, rather than serving as a place for people to live, housing is serving as investment for the rich to get ever richer from. The real problem is that when it comes to housing, the marginal buyer is now some hyper-leveraged corporation with near limitless access to cheap capital, or some billionaire investor, who'll happily bid 50% over asking as they're planning on renting the house out for the maximum amount possible and bundling their "Assets" into a REIT, and so they'll gladly pay over asking as its just a cost of doing business. So now you've got the rich through their companies and trusts buying up entire neighborhoods, out-bidding regular folks for homes, raising rents to increase profits, and turning homes that people could once have lived in, into vacation properties and short-term rentals or worst of all letting them sit empty just so they can sell them when the value goes up. Increasing wages is one absolutely necessary step towards fixing the economy, but real wages would have to rise 100%, 500%, a even f*king 1000% in a lot of places for regular folks to actually be able to afford the kinds of homes that a family could once have afforded on a single middle class income. So literally the only thing that can fix things is to make housing worth a lot less. But that will never happen because that would cause some already fantastically wealthy people to be a little less wealthy, and the rich would rather people die and go homeless than ever be less rich.

nate_meurer 5y ago
> So literally the only thing that can fix things is to make housing worth a lot less. And, I'd suggest, structuring property taxes to make real estate investment less lucrative.
twright 5y ago
> so nothing us small folk can do will likely change things in any meaningful way A lot of people feel this way, a plurality one might even say, more is possible than despair leads us to think. “[Capitalism’s] power seems inescapable. So did the divine right of kings.”