Sweaty Spice, the other Spice Girl

A great read today from The NY Times: Workers are Gaining Leverage Over Employers Right Before Our Eyes. If you are in tune with the political environment and following the back and forth about how some businesses are struggling to fill open positions, you can’t avoid hearing the largely Republican arguments that the cause of this is the enhanced unemployment benefits doled out during the Covid pandemic to help workers survive.

If you take their arguments at face value, the additional $1,200 a month (or $14,400 per year) is enough to prevent a furloughed employee from taking their old role back.

That is a bunch of bullcrap, and report after report are showing that if employers seeking staff raise their starting wages, a miracle happens. They can fill those open positions. Almost like if you aren’t a tight fisted asshole, you can find workers. This nugget from an Ezra Klein podcast on The NY Times is enlightening:

This is a moment when an implicit but ugly fact of our economy has been thrown into unusual relief: Our economy relies on poverty — or at least the threat of it — to force people to take bad jobs at low wages. This gets couched in paeans to the virtues of work, but the truth is more instrumental. The country likes cheap goods and plentiful services, and it can’t get them without a lot of people taking jobs that higher-income Americans would never, ever consider. When we begin to see glimmers of worker power in the economy, a lot of powerful people freak out, all at once.

(6/8 - Ezra Klein NYT Podcast)

Truer words have never been spoken.

This is not unique to the US, although our brand of cheap bastard business owner is head and shoulders above our special relationship cousins across the pond, there are rumblings in the hospitality industry in the UK. British Restaurants are Battling a Staff Crisis

Poignant to note from the above:

When Britain left the European Union single market, on Dec. 31, the open-door policy that had allowed people from any E.U. country to work in Britain was shut. Migrants wishing to return to Britain now need to have secured permission from the government. New workers must compete for visas in a points-based immigration system that values highly paid jobs more.

While not due solely to the Covid shutdowns allowing workers to reflect on their plight in low wage jobs, the effect of Covid, coupled with the Brexit freezing out the economic migrants from the poorer areas of the EU. But an additional factor is a close mirror to what is happening in the US:

The problem is not just Britain’s stricter immigration rules. Other workers, in Britain and elsewhere, have left the hospitality industry looking for more stable employment, said Kate Shoesmith, the deputy chief executive of the Recruitment & Employment Confederation, which represents recruitment companies and agencies.

So, the trauma from being on the front lines during the pandemic, coupled with how crappy the work is, and how low the pay is, has caused the pool of workers to rethink their life choices, and decide to uplift their situation.

Hmmm, seems like this is the market working. I have often said that if your business model can’t survive without very low wage labor, and you can’t afford to pay a livable wage, your business model sucks, and you should give it up. This has long been the norm in hospitality (loosely, the hotel, restaurant and catering/events industry) where the business owners have enjoyed a seemingly endless of lower skilled (but not non-skilled), lower educated workers who were desperate to work to survive.

Here in the US, that has led to a significant demand for undocumented labor, who are willing to work at rock bottom wages, pushing out qualified citizens, and further eroding the wage scales. This was the case in the 1980’s when I worked in restaurants and caterers, and remained the case until the Pandemic. Hell, in the US, 42 states plus the territory of Guam have a lower than the federal minimum wage for tipped employees.

Ok, now I am going to hear a ton of people groaning that this is unfair. The profit margins on restaurants is so tight, that they can’t afford to pay more.

Bullshit. There are countries all over the world that have livable minimum wages, and McDonalds seems do to OK selling Big Macs in these markets, and while the price of the burger is more, it isn’t that much more costly for the patrons. Same with sit down dining. Go to Japan and try to leave your change as a tip, and legit, the staff will chase you out of the restaurant to return it to you.

Side bar: As with many of our fucked up institutions, the history of tipping is tied to slavery because, of course it is.

One other trend is that many of the people who work in hospitality didn’t choose that life and career. Often they fall into it, because they aren’t interested in university, or other career paths, and while the work is grueling, it has its rewarding moments. And once you are deep into it, you really can’t leave it easily. The pandemic has upended that, and the enhanced unemployment insurance has gifted these furloughed people the opportunity to pursue a career change.

Indeed, many of them have found their way to work for Amazon in their fulfillment centers, making both more money, and getting benefits - often for the first time - and have permanently left the hospitality life behind.

Good for them. It is a tough career.

However, I predict that it will lead to a lot of wrangling by the NRA (National Restaurant Association, not the other NRA) to lobby for relaxed border enforcement to drive up the supply of undocumented immigrants to exploit, and the cycle will continue.

Coda

Some end notes. When I was growing up, the minimum wage was $3.35, and predominately, that was the wage paid to teens who worked casual jobs, part time during the school year, and often full time in the summer. That was a right of passage, up there with getting your driver’s license, your first car, and that independence. You didn’t “need” that money to survive, it was pocket money to take your sweetie to the movies, and buy malts (nah, that was a generation before me, we built hot rods, ran at the drag strip, and cruised on Friday nights on the El Camino Real).

But, now that high school kids are not driving nearly in the same numbers, and their helicopter parents are pressuring them into activities to burnish their resumes for college admissions, more and more of these positions are filled by adults, who are trying to piece together a living, bouncing on the bottom rung of the economy. If the minimum wage kept up with inflation, it would be somewhat north of $22 an hour right now. It is fitting that by offering a starting wage of $15, less than the inflation adjusted minimum that was in effect when I got my first job, is what triggers people to apply for these roles.

To business owners crying in their beer over their labor costs: Figure out a business plan that doesn’t rely on dog shit wages. Yes, Americans love cheap stuff, but that doesn’t justify your exploitation of the workers. You are learning that your decades of abuse is coming back to bite you in the ass.

Good.

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