> “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?
Tahoe's hiring crisis is unraveling small businesses during its busiest season
111–120 of 170 posts
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#112> “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?
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#113Earlier quoted context omitted.
We're in the middle of a gigantic reallocation of the economy after Covid. It's going to take a while to sort out who works where in the new equilibrium.
Exactly. Government has been backstopping/de-risking asset ownership since the Great Recession and massively increased that program in March 2020. At the same time, they started to de-risk the asset consumer class with eviction moratoriums and significantly increased unemployment benefits. Seems to me one of those two classes will need to be inconvenienced if we don't want inflation to spiral out of control, because…
Very true. The Fed pretty much exclusively worries about asset owners and how to drive up asset prices even more. And most people in political or business leadership are asset owners.
I don’t think this will end well. Either we will become a society of super rich people that live separately from a large underclass or there will be a revolution at some point.
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#114Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#115Earlier quoted context omitted.
We're in the middle of a gigantic reallocation of the economy after Covid. It's going to take a while to sort out who works where in the new equilibrium.
Exactly. Government has been backstopping/de-risking asset ownership since the Great Recession and massively increased that program in March 2020. At the same time, they started to de-risk the asset consumer class with eviction moratoriums and significantly increased unemployment benefits. Seems to me one of those two classes will need to be inconvenienced if we don't want inflation to spiral out of control, because…
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#116> “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?
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#117Earlier quoted context omitted.
Or do the unfathomable: Pay people better.
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?
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#118Earlier quoted context omitted.
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 s…
If landlords are charging significantly more then the mortgage costs, then what if the rent model was switched to an auction with a minimum set at the landlord mortgage costs plus some percentage on top? That way the landlord gets what they need and the pricing is not arbitrary, but at least fixed to some realistic measure. Note: I’m not very familiar with the situation, just ideating.
In the past, landlords owned property and rented it out. If there was a mortgage, rent covered the interest payments rather than principal (interest rates were once far higher than today) and rents were generally lower than mortgage costs. If rent is higher than mortgage costs, the renter would be better off purchasing the property. A landlord that is asking rents higher than their mortgage is simply leveraging their better credit rating, renting out an asset for higher than someone with similar credit could purchase it.
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#119Earlier quoted context omitted.
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 s…
This randomly selected but high-google-ranked page disagrees with you: https://www.caminofinancial.com/restaurant-costs/ So does this one: https://www.7shifts.com/blog/restaurant-costs/ and this one: https://www.touchbistro.com/blog/restaurant-operating-costs/
Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season
#120There 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.