5 ms·

I go to a breakfast shop a lot, they lost around 1/2 of their staff permanently due to COVID, It majorly jostled the restaurant sector around here. I asked the

I go to a breakfast shop a lot, they lost around 1/2 of their staff permanently due to COVID, It majorly jostled the restaurant sector around here. I asked the owner, "Well, why'd they leave?". He claims "They're getting more on unemployment than if they worked." Well, why is that the case? Don't you provide them with enough to live on? If they're getting $500 a week from unemployment, that would mean you're paying people less than $24k to work for you, without healthcare or retirement benefits, might I add. He later stated if minimum wage was $15 an hour, he'd have to raise his prices and lose some staff who aren't efficiently employed time-wise. He stated this like it was a huge negative, but to me, he should pay great employees a great wage to work hard, not have extra employees all of whom are paid poorly to stand around a bit on the downtimes. And anyway, as a customer, I'd happily pay $10 instead of $5 for breakfast, if I had the option to support the employees properly. $5 vs $10 for us in technology? Many of us make $30 hour, or FAR more, so these $5 differences are much smaller to us than to restaurant workers.

JoeAltmaier 5y ago
Folks raise that spectre when a living wage is mentioned. "So many service jobs lost!" I shake my head at that - folks who imagine themselves Free Market advocates, and here they are agreeing with Karl Marx that a capitalist system can't survive without a slave-wage class to prop it up. Paying everybody a living wage should be the minimum bar for any economy. If ours can't do it, we need a different one.
- gruez 5y ago
  > and here they are agreeing with Karl Marx that a capitalist system can't survive without a slave-wage class to prop it up. The employers aren't obligated to employ anyone. What do you think happens to the "slave-wage class" when the job disappears entirely?
  - wonderwonder 5y ago
    Issue is that the only reason this slave wage class exists in food services is because of a coordinated lobbying campaign to influence politicians to keep it like that. Most people in this thread would be pretty upset if all tech companies got together tomorrow and decided to artificially cap salaries and bought politicians to enforce it.
    - gruez 5y ago
      >Most people in this thread would be pretty upset if all tech companies got together tomorrow and decided to artificially cap salaries and bought politicians to enforce it. Are you claiming that wages in the restaurant industry are kept artificially low because of companies artificially capping salaries, and that politicians are enforcing it? If so, is there a source for this? AFAIK the pay is bad purely because of market reasons (ie. there are more people willing to do it than there are positions).
      - abeyer 5y ago
        I don't think it's as common any more, but for many years a lot of states had "tip credit" laws (which were strongly supported/lobbied for by the restaurant industry) that allowed companies to pay tipped employees less than minimum wage with the assumption that they made up the difference in tips.
      - wonderwonder 5y ago
        Yes: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped Federal minimum wage is $7.25 for tipped employees its $2.13 Lobbying groups contribute to keeping wages low: https://www.politicalresearch.org/2015/04/14/chain-restaurants-post-record-profits-while-lobbying-pay-workers-less https://www.politicalresearch.org/2015/04/14/chain-restauran... Herman Cain former presidential candidate and CEO of godfather's pizza specifically built his lobbying career on this. Not claiming it, its a fact.
        gruez 5y ago
        >Not claiming it, its a fact. The "facts" in this comment are similar, but not the same as the claims made in your original comment. Specifically, it only presents evidence of businesses removing government restrictions on the minimum price of labor. It does not present evidence of businesses keeping wages "artificially low" (ie. below the natural market clearing price). If anything, removing the restrictions stops restaurant wages from being artificially high. The closer analogy here would be if for whatever reason there was a law saying that "engineers" had to be paid $200k minimum, and tech companies lobbied for software engineers to be exempt. That's already very different than software companies suppressing wages (eg. by colluding with each other not to compete on wages). Another wrinkle to this is that tipped employees receive tips. If software engineers were receiving royalties in addition to their normal salaries, I would think it's fair for them to be paid lower minimum wage than other engineers that don't receive royalties.
  - AnIdiotOnTheNet 5y ago
    > The employers aren't obligated to employ anyone And we're not obligated to provide them with people desperate enough to work their shit jobs either.
  - Frondo 5y ago
    No specific employer is obligated to employ a specific employee, but we as a society have an obligation not to allow a slave-wage class to exist. We can do this, but we choose not to.
nunez 5y ago
just remember that _you_, presumably a tech worker making great money, would easily pay $10 instead of $5. Many others are extremely price-elastic and will literally give up years of patronage for Denny's or something with a move like this. One could argue that they could market to a higher-earning clientele, but that might not exist where you are, and they'd still have to pay to (maybe) earn that market. it's a huge catch 22. i feel like i should add that I usually tip 50-100% (since COVID started) regardless of service and want to see restaurant workers paid much better across the board. tips are not commissions.
- sokoloff 5y ago
  Those others would be exhibiting price-elastic behavior, not price-inelastic. (A high change in demand for a change in price is elastic.)
  - nunez 5y ago
    Thanks for the correction!
ruined 5y ago
you do not get unemployment if you quit your job voluntarily. when managers say employees leave in order to collect unemployment, it's a lie.
- darkwizard42 5y ago
  It is more that when the pandemic hit, most restaurants let go of their working staff, given they couldn't furlough or keep them on payroll when the restaurants were closed. Since they were fired, they got unemployment. Now, restaurants are open again, but folks don't want to go back for the meager pay (and likely the extra freedom in their time is welcome as well).
  - ruined 5y ago
    that's not the situation of "employees quit to collect unemployment", which is commonly claimed and is what i was calling a lie. the article at the root of this discussion documents that employees are indeed actually quitting, which disqualifies unemployment. but anyway, for those who do collect unemployment, job search requirements are in effect now. unemployment offices are requiring workers to apply to jobs and document their search. they cross-reference with employers and will actually revoke unemployment if job offers are declined. if restaurants still can't hire staff under these forced conditions, it's because they are simply worse than other jobs available, and perhaps even worse than no income.
- usaar333 5y ago
  The covid rule changes to UI were more flexible. You could leave/not take a new job due to covid concerns: https://www.sfchronicle.com/business/networth/article/Californians-can-refuse-some-work-during-15267447.php https://www.sfchronicle.com/business/networth/article/Califo...
  - andylei 5y ago
    but you still can't get unemployment if you voluntarily leave your job
  - 5y ago
bena 5y ago
Be aware that you can't entirely trust his perception of the situation. He has a vested interest in under-paying his workforce. He is going to doom and gloom any situation that results in him potentially losing money. And him losing out on profit to pay his staff probably doesn't enter his mind. If he made $X of profit last year, he wants to make $X+ this year. So he figures if he has to pay people Y more, he will have to charge Y more so he can still profit what he wants to. To your opinion on what he should do regarding "extra" employees, I'm going to refer you to the book, Slack. While those employees are technically standing around being extra, they're needed to accommodate the bursts of activity that happens in a restaurant. Restaurants aren't busy all day long, they're busy in spurts. When you need people, you need them now. And I think that may a major issue. The tipped minimum wage makes things feel like they're running efficiently, when it's really just shifting the money around in a way that is not optimal for the customer and causes them to overpay.
- frankydp 5y ago
  So you are saying that the employer is under charging(by proxy of labor cost) and the customer is over paying at the same time?
  - bena 5y ago
    Not quite. You're trying to shift what I'm talking about to ignore the issue. The owner is under paying for the labor and the customer, in turn, is over paying for the labor. This is due to information asymmetry. The employer is only paying the legal minimum, in the case of tipped wages in the U.S., $2.13. The employee is expected to make up the rest of the federal/state minimum wage in tips. But that's what they're incentivized to do. If you've got a short sighted view of finances, you may think that if you manage to cut costs, that always translates to extra profit. And if you're paying a dime more than minimum wage, you can cut that cost. (Also, this is why a lot of restaurants fail, most people who run them shouldn't be running a business) The customer is obligated by social pressure and what not to tip for the service provided. However, people in the service industry are cagey about how much they pull in, actual effort required, etc. in order to get people to tip more and more. Originally, tipping was around 10% and now we see people trying to promote the idea that a baseline tip is closer to 25%. So the customer has no clue as to how to price the labor that's been provided to them and it is in the servers' best interest to exaggerate as much as possible to get the most tip possible. That's what they're incentivized to do. And inbetween it all, you have the servers. Who don't want to let go of the tipping model because they can manage to get paid better than what the actual service would be worth in a fairer market.
_moof 5y ago
Indeed - and if people are quitting at record rates, that potentially exposes the image of willfully unemployed restaurant workers lazing about on piles of unemployment cash as a myth.

JoeAltmaier 5y ago

Folks raise that spectre when a living wage is mentioned. "So many service jobs lost!" I shake my head at that - folks who imagine themselves Free Market advocates, and here they are agreeing with Karl Marx that a capitalist system can't survive without a slave-wage class to prop it up. Paying everybody a living wage should be the minimum bar for any economy. If ours can't do it, we need a different one.

gruez 5y ago
> and here they are agreeing with Karl Marx that a capitalist system can't survive without a slave-wage class to prop it up. The employers aren't obligated to employ anyone. What do you think happens to the "slave-wage class" when the job disappears entirely?
- wonderwonder 5y ago
  Issue is that the only reason this slave wage class exists in food services is because of a coordinated lobbying campaign to influence politicians to keep it like that. Most people in this thread would be pretty upset if all tech companies got together tomorrow and decided to artificially cap salaries and bought politicians to enforce it.
  - gruez 5y ago
    >Most people in this thread would be pretty upset if all tech companies got together tomorrow and decided to artificially cap salaries and bought politicians to enforce it. Are you claiming that wages in the restaurant industry are kept artificially low because of companies artificially capping salaries, and that politicians are enforcing it? If so, is there a source for this? AFAIK the pay is bad purely because of market reasons (ie. there are more people willing to do it than there are positions).
    - abeyer 5y ago
      I don't think it's as common any more, but for many years a lot of states had "tip credit" laws (which were strongly supported/lobbied for by the restaurant industry) that allowed companies to pay tipped employees less than minimum wage with the assumption that they made up the difference in tips.
    - wonderwonder 5y ago
      Yes: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped https://www.dol.gov/agencies/whd/state/minimum-wage/tipped Federal minimum wage is $7.25 for tipped employees its $2.13 Lobbying groups contribute to keeping wages low: https://www.politicalresearch.org/2015/04/14/chain-restaurants-post-record-profits-while-lobbying-pay-workers-less https://www.politicalresearch.org/2015/04/14/chain-restauran... Herman Cain former presidential candidate and CEO of godfather's pizza specifically built his lobbying career on this. Not claiming it, its a fact.
      - gruez 5y ago
        >Not claiming it, its a fact. The "facts" in this comment are similar, but not the same as the claims made in your original comment. Specifically, it only presents evidence of businesses removing government restrictions on the minimum price of labor. It does not present evidence of businesses keeping wages "artificially low" (ie. below the natural market clearing price). If anything, removing the restrictions stops restaurant wages from being artificially high. The closer analogy here would be if for whatever reason there was a law saying that "engineers" had to be paid $200k minimum, and tech companies lobbied for software engineers to be exempt. That's already very different than software companies suppressing wages (eg. by colluding with each other not to compete on wages). Another wrinkle to this is that tipped employees receive tips. If software engineers were receiving royalties in addition to their normal salaries, I would think it's fair for them to be paid lower minimum wage than other engineers that don't receive royalties.
- AnIdiotOnTheNet 5y ago
  > The employers aren't obligated to employ anyone And we're not obligated to provide them with people desperate enough to work their shit jobs either.
- Frondo 5y ago
  No specific employer is obligated to employ a specific employee, but we as a society have an obligation not to allow a slave-wage class to exist. We can do this, but we choose not to.

nunez 5y ago

just remember that _you_, presumably a tech worker making great money, would easily pay $10 instead of $5. Many others are extremely price-elastic and will literally give up years of patronage for Denny's or something with a move like this. One could argue that they could market to a higher-earning clientele, but that might not exist where you are, and they'd still have to pay to (maybe) earn that market. it's a huge catch 22. i feel like i should add that I usually tip 50-100% (since COVID started) regardless of service and want to see restaurant workers paid much better across the board. tips are not commissions.

sokoloff 5y ago
Those others would be exhibiting price-elastic behavior, not price-inelastic. (A high change in demand for a change in price is elastic.)
- nunez 5y ago
  Thanks for the correction!

ruined 5y ago

you do not get unemployment if you quit your job voluntarily. when managers say employees leave in order to collect unemployment, it's a lie.

darkwizard42 5y ago
It is more that when the pandemic hit, most restaurants let go of their working staff, given they couldn't furlough or keep them on payroll when the restaurants were closed. Since they were fired, they got unemployment. Now, restaurants are open again, but folks don't want to go back for the meager pay (and likely the extra freedom in their time is welcome as well).
- ruined 5y ago
  that's not the situation of "employees quit to collect unemployment", which is commonly claimed and is what i was calling a lie. the article at the root of this discussion documents that employees are indeed actually quitting, which disqualifies unemployment. but anyway, for those who do collect unemployment, job search requirements are in effect now. unemployment offices are requiring workers to apply to jobs and document their search. they cross-reference with employers and will actually revoke unemployment if job offers are declined. if restaurants still can't hire staff under these forced conditions, it's because they are simply worse than other jobs available, and perhaps even worse than no income.
usaar333 5y ago
The covid rule changes to UI were more flexible. You could leave/not take a new job due to covid concerns: https://www.sfchronicle.com/business/networth/article/Californians-can-refuse-some-work-during-15267447.php https://www.sfchronicle.com/business/networth/article/Califo...
- andylei 5y ago
  but you still can't get unemployment if you voluntarily leave your job
- 5y ago

bena 5y ago

Be aware that you can't entirely trust his perception of the situation. He has a vested interest in under-paying his workforce. He is going to doom and gloom any situation that results in him potentially losing money. And him losing out on profit to pay his staff probably doesn't enter his mind. If he made $X of profit last year, he wants to make $X+ this year. So he figures if he has to pay people Y more, he will have to charge Y more so he can still profit what he wants to. To your opinion on what he should do regarding "extra" employees, I'm going to refer you to the book, Slack. While those employees are technically standing around being extra, they're needed to accommodate the bursts of activity that happens in a restaurant. Restaurants aren't busy all day long, they're busy in spurts. When you need people, you need them now. And I think that may a major issue. The tipped minimum wage makes things feel like they're running efficiently, when it's really just shifting the money around in a way that is not optimal for the customer and causes them to overpay.

frankydp 5y ago
So you are saying that the employer is under charging(by proxy of labor cost) and the customer is over paying at the same time?
- bena 5y ago
  Not quite. You're trying to shift what I'm talking about to ignore the issue. The owner is under paying for the labor and the customer, in turn, is over paying for the labor. This is due to information asymmetry. The employer is only paying the legal minimum, in the case of tipped wages in the U.S., $2.13. The employee is expected to make up the rest of the federal/state minimum wage in tips. But that's what they're incentivized to do. If you've got a short sighted view of finances, you may think that if you manage to cut costs, that always translates to extra profit. And if you're paying a dime more than minimum wage, you can cut that cost. (Also, this is why a lot of restaurants fail, most people who run them shouldn't be running a business) The customer is obligated by social pressure and what not to tip for the service provided. However, people in the service industry are cagey about how much they pull in, actual effort required, etc. in order to get people to tip more and more. Originally, tipping was around 10% and now we see people trying to promote the idea that a baseline tip is closer to 25%. So the customer has no clue as to how to price the labor that's been provided to them and it is in the servers' best interest to exaggerate as much as possible to get the most tip possible. That's what they're incentivized to do. And inbetween it all, you have the servers. Who don't want to let go of the tipping model because they can manage to get paid better than what the actual service would be worth in a fairer market.

_moof 5y ago

Indeed - and if people are quitting at record rates, that potentially exposes the image of willfully unemployed restaurant workers lazing about on piles of unemployment cash as a myth.