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Restaurant workers quit at record rate

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Re: Restaurant workers quit at record rate

#711

Post by 29083011397778 »

browningstreet wrote: post #498

I think some businesses are going out of businesses because they stubbornly refuse to raise their wages. In the vacation community where I live, there are two grocery/delis about a mile apart from each other. One is at a marina, the other is at a beach. They have almost the same business offering. Traditionally, both are fully mobbed during the sunny seasons. Two weeks ago, I visited the one I usually go to -- at the…

> I think some businesses are going out of businesses because they stubbornly refuse to raise their wages.

I'm sure you're right. Some business owners are stubborn and don't want to offer higher pay. That said, to quote TFA:

> But in one recent survey, more than half of hospitality workers who've quit said no amount of pay would get them to return.

Paying more will get some people. But it clearly won't be enough for all, and maybe not even most.

Re: Restaurant workers quit at record rate

#712

Post by ergot_vacation »

mirkules wrote: post #596
robotresearcher wrote: post #582

Earlier quoted context omitted.

Naive question: why not raise prices?

Because if everyone raises their prices, the wage increase then effectively makes no difference. If everyone raises wages, they have to raise prices. For the restaurant, this means they have to charge more for the same service, and they have to pay more for their supply chain (because they also increased their prices). For the worker, that means they will pay more for things and services they need/want, because every…

It's interesting that nearly everything that might benefit the lower and lower-middle classes seems to lead, inexorably, to inflation: UBI, a living wage, decent benefits, the list goes on. One might almost conclude that inflation has become a lazy boogie man, to be trotted out for propagandist purposes whenever change is suggested.

Re: Restaurant workers quit at record rate

#713

Post by pcmoney »

browningstreet wrote: post #498

I think some businesses are going out of businesses because they stubbornly refuse to raise their wages. In the vacation community where I live, there are two grocery/delis about a mile apart from each other. One is at a marina, the other is at a beach. They have almost the same business offering. Traditionally, both are fully mobbed during the sunny seasons. Two weeks ago, I visited the one I usually go to -- at the…

So the owner who has operated a cut throat, extremely demanding, razor thin margin for years folds because they don’t understand basic labor supply and demand?

Keep in mind this person has mostly likely done in depth analysis on how to make their most popular item at the same quality but for 2% less of some expensive ingredient.

I know one phenomenal restaurant owner who spent an entire year to get the cost of their paper products from 2% of COGS to 1%. Bonuses to managers, trash audits, the whole thing.

You really think people like that couldn’t figure out raise salaries and prices?

Do you know whats going to happen here? Panera, Qdoba, and 5 Guys. Just a monoculture of terrible bland food. Only the big players with economies of scale can charge less and pay the same as smaller restaurants.

Re: Restaurant workers quit at record rate

#714

Post by doopy1 »

AgentOrange1234 wrote: post #664
chaostheory wrote: post #647

Earlier quoted context omitted.

All of that costs money. Are we as customers willing to pay for it? While a lot of us on HN can afford the price increases, not everyone else can. I have a feeling that wage increases will come, but there will be less employees and the remaining better paid employees will be augmented with technology in order to serve more customers ie more automation

Businesses might ask customers to pay more. They might instead pay CEOs and investors less. Automation is coming regardless.

Most businesses are small businesses, not ones run by mega millionaire CEOs.

Re: Restaurant workers quit at record rate

#715

Post by 29083011397778 »

systemvoltage wrote: post #703
AussieWog93 wrote: post #681

Earlier quoted context omitted.

>It doesn't take a MBA-like focus to think "Gee..only if we had more margin, we'd pay more". It does take razor-sharp focus and constant innovation to work out how you can increase margin, though. You can't just arbitrarily raise prices without offering any additional value and expect your business to stay alive.

Small businesses already have a razor sharp focus otherwise they'd disappear. Literally their margins are their bread. I find your take slighly condescending but I want to give you a benefit of the doubt - what makes you think small businesses aren't focused on optmizing their margins? Just like you, I am a small business partner and know many small business owners. If you put an MBA-educated person in charge, the op…

Is it possible there's multiple types of small business owners, and you're talking past each other? Because I'm sure some owners know where every dime goes, like you say. But the small business I work at currently doesn't work like that.

The small business I worked at previously was closer, but the owner worked longer hours, possibly for less pay, and absolutely had more responsibilities, than I ever did working there. And I assume that led to a divided focus, and in turn, not being able to focus solely on optimizing every dollar.

Re: Restaurant workers quit at record rate

#716

Post by tdfx »

tenebrisalietum wrote: post #98
AnIdiotOnTheNet wrote: post #74

Earlier quoted context omitted.

Tell me: why do we use backhoes to dig ditches instead of armies of workers with spoons?

Well, if we have a morality of "work is virtue" then obviously it's best to spread that virtue to the most. If we want to spread wealth to the most to avoid social upheaval in the context of that morality, then more people employed would be better over fewer with a living wage. Of course UBI or other safety net would be a good way to avoid social upheaval as well.

> UBI or other safety net would be a good way to avoid social upheaval as well.

I know it's not an apples to apples comparison with any proposed UBI implementation, but looking at the social upheaval caused by the COVID-19 quarantine and stimulus programs, I'd say cutting a check to people and leaving a void in their life where work used to be is a fertile breeding ground for aimless people who will be easily radicalized. It's not something I ever considered pre-2020 as a big proponent of UBI, but now I feel it's something that has to give us concern.

Re: Restaurant workers quit at record rate

#717

Post by rendall »

fridif wrote: post #693
rendall wrote: post #667

Earlier quoted context omitted.

It sounds like a seller's market.

A seller's market created by a law in which if the buyer pays too low of a price, very bad things happen to them.

One would expect in that case lots of laborers with wages at the minimum, and many more looking for work. What we're seeing in the description is not that.

Re: Restaurant workers quit at record rate

#718

Post by wwweston »

mirkules wrote: post #596
robotresearcher wrote: post #582

Earlier quoted context omitted.

Naive question: why not raise prices?

Because if everyone raises their prices, the wage increase then effectively makes no difference. If everyone raises wages, they have to raise prices. For the restaurant, this means they have to charge more for the same service, and they have to pay more for their supply chain (because they also increased their prices). For the worker, that means they will pay more for things and services they need/want, because every…

> Because if everyone raises their prices, the wage increase then effectively makes no difference.

Depends heavily on specifics. Like, which goods and services? How much of someone's purchases do they represent? Are they substitutable? Restaurants deal in the substitutable and minority part.

The relationship between per-unit price and labor cost per unit also matters quite a bit. If labor costs per unit are small, it may not take a big per-unit price bump in order to give labor a substantial raise.

Re: Restaurant workers quit at record rate

#719

Post by chillwaves »

pempem wrote: post #648
seriousquestion wrote: post #608

Earlier quoted context omitted.

Given that we are outside observers, is it possible that they know something we don't? What might be some charitable explanations for why they don't raise prices?

Restaurants that are not franchises have a 50% failure rate. Margins are intensely tight and the largest cost is labor, not food, spoilage, advertising, interior design, or whatever else. The central government and state government take limited to no responsibility for healthcare, child care, retirement, sick leave, pto etc. The central justice system has agreed that corporations have a duty to their stakeholders abo…

https://www.restaurantbusinessonline.com/financing/mcdonalds...

Re: Restaurant workers quit at record rate

#720

Post by dannyw »

pcmoney wrote: post #713
browningstreet wrote: post #498

I think some businesses are going out of businesses because they stubbornly refuse to raise their wages. In the vacation community where I live, there are two grocery/delis about a mile apart from each other. One is at a marina, the other is at a beach. They have almost the same business offering. Traditionally, both are fully mobbed during the sunny seasons. Two weeks ago, I visited the one I usually go to -- at the…

So the owner who has operated a cut throat, extremely demanding, razor thin margin for years folds because they don’t understand basic labor supply and demand? Keep in mind this person has mostly likely done in depth analysis on how to make their most popular item at the same quality but for 2% less of some expensive ingredient. I know one phenomenal restaurant owner who spent an entire year to get the cost of their…

I think your anecdote isn't necessarily reflective of all restaurant owners:

(1) not everyone leases, some family businesses own the land and has significantly better margins at the trade-off of opportunity cost on the real estate,

(2) some businesses are explicitly there to fulfil visa or immigration obligations, so profitability isn't a priority,

(3) in less dense areas, the general laws of competition don't apply as much pressure as SF or NYC.

Don't forget lifestyle businesses. I actually know multiple high-income people (lawyers, doctors) who just let their partners run businesses for the sake of doing something during the day; they lose money every year which offsets the joint income, and is better than having their partner sit around at home and spending money on something else.

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