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This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and

This seems really stupid. A restaurant sells two basic categories of product: food/drink, and service. Labor is expended on both. They’re ignoring service and only looking at food/drink. The split between these two products has shifted away from service. That means more labor is going into the thing they’re actually counting and less is going into the thing they’re ignoring. Wow, productivity went up! It’s interesting that the industry has shifted to more takeout, but framing it as “surge of productivity” is ridiculous.

horsawlarway 2y ago
Yeah, Marketplace on NPR covered this yesterday and came to essentially the same conclusion. It's not that productivity is genuinely up, it's that modern restaurants are providing a different product. Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.
- dehrmann 2y ago
  Nit: Marketplace is an APM show--essentially a competitor of NPR. "NPR" has just become shorthand for "public radio."
  - brians 2y ago
    Also Marketplace airs on NPR stations. I have Windows on a Dell, and I hear Marketplace on NPR.
    - dehrmann 2y ago
      Marketplace airs on stations that might happen to also air NPR. It's more like dual booting Windows and Linux on your Dell that has a Windows sticker on it.
      - horsawlarway 2y ago
        APM and NPR are both syndicated content, but it's not quite the same. The local stations mostly call themselves NPR stations (NPR member stations) and they explicitly include NPR branding (ex - right in the logo for mine: https://www.wabe.org/ https://www.wabe.org/) and pay membership dues to NPR in addition to content licensing. APM also has its own set of stations, but the list is much smaller. Plus - basically the only content from APM on my NPR station is Marketplace. It's "NPR" for all intents and purposes. It's not dual booting, it's like a linux machine running WINE for a single application.
  - horsawlarway 2y ago
    Marketplace is aired on my local NPR station (WABE). APM is syndicated and broadcast on several different channels. I happen to listen to Marketplace on NPR, not Marketplace by NPR.
nostrademons 2y ago
Another effect they're glossing over is inflation. They're measuring real labor productivity ((dollars generated / inflation) / hours worked), but usually the way you measure inflation in that equation is to plug in some society-wide metric like the CPI or GDP deflator. By most accounts restaurant inflation has gone up more than overall CPI inflation; at least, I'm spending $120 on a meal that would've cost $80 pre-pandemic, yet official CPI inflation over this time period has been only about 23%. If you use that formula naively, it looks like the earnings of the restaurant sector have increased (which, technically speaking, they have relative to the rest of the economy), but it's really because you're paying more for the same service than you did before.
- mediaman 2y ago
  No, they're not glossing over inflation, because they were able to explain nearly the entire difference in real sales per employee between restaurants during the same time as a function of dwell time. They are not just looking at an overall increase in sales, misunderstanding sector-specific inflation, and saying it must be dwell time. It's a good paper! I would encourage reading it. They have specific dwell time data per location, along with sales data, and explain the difference in productivity by looking at differences in productivity between restaurants over the same time period, find that it is determined by changes in dwell time, and then find that the overall mix shift of reduced dwell time explains the overall change in real sales per employee across the sector. Inflation is not the explanation.
dehrmann 2y ago
What it's really saying is we need a better metric now that front and back of house have decoupled.
mediaman 2y ago
If you read the paper, they explicitly define "productivity" as real sales per employee. Your point about service versus food would be valid except that, apparently, they weren't being paid well for the service, because real sales went up per employee as a function of reduced dwell time. That means that service was a low productivity offering. That you can explain the increase in productivity by shift in mix from low-productivity to high-productivity products is, in fact, the entire point of the paper, and does not mean that a "surge in productivity" did not happen. The authors point out that a change in consumer demand preferences is in fact a type of "technology" in that it can be a driver of sector productivity. Not all technology lives on circuit boards!
- wat10000 2y ago
  In the US, service is paid almost entirely from tips. The word “tip” doesn’t occur anywhere in their paper so I’m not optimistic that they accounted for this.
lostlogin 2y ago
> the industry has shifted to more takeout Last night I went to a nice (formerly nice?) restaurant. Someone had brought their dog, their children crawled around my feet and one listened to an iPad on moderate to high volume. I ordered my drink twice, and it never came, my side dish was ordered twice too, and eventually came. I abandoned movie theatres for similar reasons. Maybe it’s time to abandon restaurants.

horsawlarway 2y ago

Yeah, Marketplace on NPR covered this yesterday and came to essentially the same conclusion. It's not that productivity is genuinely up, it's that modern restaurants are providing a different product. Takeout/delivery to eat on your couch has different economics than a full service restaurant. Phrasing it as productivity is disingenuous.

dehrmann 2y ago
Nit: Marketplace is an APM show--essentially a competitor of NPR. "NPR" has just become shorthand for "public radio."
- brians 2y ago
  Also Marketplace airs on NPR stations. I have Windows on a Dell, and I hear Marketplace on NPR.
  - dehrmann 2y ago
    Marketplace airs on stations that might happen to also air NPR. It's more like dual booting Windows and Linux on your Dell that has a Windows sticker on it.
    - horsawlarway 2y ago
      APM and NPR are both syndicated content, but it's not quite the same. The local stations mostly call themselves NPR stations (NPR member stations) and they explicitly include NPR branding (ex - right in the logo for mine: https://www.wabe.org/ https://www.wabe.org/) and pay membership dues to NPR in addition to content licensing. APM also has its own set of stations, but the list is much smaller. Plus - basically the only content from APM on my NPR station is Marketplace. It's "NPR" for all intents and purposes. It's not dual booting, it's like a linux machine running WINE for a single application.
- horsawlarway 2y ago
  Marketplace is aired on my local NPR station (WABE). APM is syndicated and broadcast on several different channels. I happen to listen to Marketplace on NPR, not Marketplace by NPR.

nostrademons 2y ago

Another effect they're glossing over is inflation. They're measuring real labor productivity ((dollars generated / inflation) / hours worked), but usually the way you measure inflation in that equation is to plug in some society-wide metric like the CPI or GDP deflator. By most accounts restaurant inflation has gone up more than overall CPI inflation; at least, I'm spending $120 on a meal that would've cost $80 pre-pandemic, yet official CPI inflation over this time period has been only about 23%. If you use that formula naively, it looks like the earnings of the restaurant sector have increased (which, technically speaking, they have relative to the rest of the economy), but it's really because you're paying more for the same service than you did before.

mediaman 2y ago
No, they're not glossing over inflation, because they were able to explain nearly the entire difference in real sales per employee between restaurants during the same time as a function of dwell time. They are not just looking at an overall increase in sales, misunderstanding sector-specific inflation, and saying it must be dwell time. It's a good paper! I would encourage reading it. They have specific dwell time data per location, along with sales data, and explain the difference in productivity by looking at differences in productivity between restaurants over the same time period, find that it is determined by changes in dwell time, and then find that the overall mix shift of reduced dwell time explains the overall change in real sales per employee across the sector. Inflation is not the explanation.

dehrmann 2y ago

What it's really saying is we need a better metric now that front and back of house have decoupled.

mediaman 2y ago

If you read the paper, they explicitly define "productivity" as real sales per employee. Your point about service versus food would be valid except that, apparently, they weren't being paid well for the service, because real sales went up per employee as a function of reduced dwell time. That means that service was a low productivity offering. That you can explain the increase in productivity by shift in mix from low-productivity to high-productivity products is, in fact, the entire point of the paper, and does not mean that a "surge in productivity" did not happen. The authors point out that a change in consumer demand preferences is in fact a type of "technology" in that it can be a driver of sector productivity. Not all technology lives on circuit boards!

wat10000 2y ago
In the US, service is paid almost entirely from tips. The word “tip” doesn’t occur anywhere in their paper so I’m not optimistic that they accounted for this.

lostlogin 2y ago

> the industry has shifted to more takeout Last night I went to a nice (formerly nice?) restaurant. Someone had brought their dog, their children crawled around my feet and one listened to an iPad on moderate to high volume. I ordered my drink twice, and it never came, my side dish was ordered twice too, and eventually came. I abandoned movie theatres for similar reasons. Maybe it’s time to abandon restaurants.