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Tahoe's hiring crisis is unraveling small businesses during its busiest season

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Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#111

> “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?

Modern economics seems to believe that CEOs can only be motivated by more and more money. But low income people get lazy and spoiled if they make more money.

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?

Because they’d rather complain than pay better wages. It’s easier to shove the problem onto the local government than it is to have them pay their own wages. This is common among all industries/businesses. Have the masses pay - not your business.

Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#113

Earlier 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…

“ Asset owners should be the ones taking the hit since they have been backstopped for far longer and are in a much better financial position to deal with it. But the asset owner class is also the one running the country and its tough to imagine them doing something against their short-term self interest.”

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

#114
I’ve seen the same thing occurring in central Oregon in spots that usually are busy in the summer. You see places closing early or not opening due to staffing issues, right in the middle of the busy season when people are over there vacationing. It’s caught me by surprise when I noticed things like the grocery store closing super early, or cafes being closed on days they’d usually be open, all with signs on the door saying that it’s due to staffing shortages.

Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#115

Earlier 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…

[deleted]

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?

[deleted]

Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#117

Earlier 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?

[deleted]

Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#118

Earlier 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.

Why should rent be higher than mortgage costs? Why should renters pay down principal, effectively purchasing the property for the landlord?

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

#119

Earlier 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/

And how much of the labor costs in fact goes to the rent paid by those workers? My point is that rents, payments to landlords, take little pieces out of everything.

Re: Tahoe's hiring crisis is unraveling small businesses during its busiest season

#120
Living about 45 minutes north of Tahoe, the article is spot on in highlighting housing being an issue. Near by areas like Reno, Plumas County, etc. have seen rents and housing prices skyrocket. My condo in plumas has doubled in value in less than 5 years.

There 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.

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