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Labor shortage or terrible jobs?

annehelen.substack.com

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Re: Labor shortage or terrible jobs?

#341

Post by reddog »

pydry wrote: post #139
colinmhayes wrote: post #129

Earlier quoted context omitted.

The existence of smartphones alone makes life much better than it was 20 years ago.

Sure, I mean, you might be priced out of a home but you can play flappy birds. So that's something.

You might be interested to know that that phone also gives you access to all the worlds knowledge, all music and art, all literature and films, you can buy anything with it and have it delivered directly to you and you can instantly communicate with anyone in the world multiple ways at almost no cost. And you can play Flappy Birds.

Re: Labor shortage or terrible jobs?

#342

Post by nemothekid »

lotsofpulp wrote: post #306
throwawaygh wrote: post #303

Earlier quoted context omitted.

> The data clearly shows the vast majority of the restaurant business be a low margin, high risk venture I think what I was suggesting was that perhaps restaurants as an industry have systematically under-estimated consumers' willingness to pay. You see this in software pricing discussions a lot, actually: small shops that leave a lot of money on the table by not charging enough. Is it really so crazy to imagine that…

Restaurant owners aren’t leaving money on the table because they’re charitable people. There’s so many restaurant openings and closings for so many decades that I think it’s a pretty good indicator of their price dynamics. Software is B2B many times and has efficiencies of scale that restaurants don’t.

> There’s so many restaurant openings and closings for so many decades that I think it’s a pretty good indicator of their price dynamics.

There have been many startups that have opened and gone bust in the past 15 years. I don’t think I would say that startups have terrible profit margins. In the context of tech startups the understood answer is that their product sucked. I think the same is true for most restaurants - I think running a restaurant is underrated and if the food is bad or atmosphere is terrible people just won’t go no matter how low the price is.

If restaurants were struggling solely due to low profits they would look a lot more like MoviePass or WeWork. Incredible demand but unsustainable business model. Most restaurants are more like Blockbuster. No demand while trying maintain fixed costs.

Re: Labor shortage or terrible jobs?

#343

Post by robocat »

betwixthewires wrote: post #326
inetknght wrote: post #164

Earlier quoted context omitted.

> Can you elaborate on this? $7.25 8 hours = $58. It's hard to imagine expenses adding up anywhere close to $58/day, especially if you factor in that in high cost of living areas the minimum wage is also higher than $7.25.* Wow can you be any more out of touch? Your comment is offensively innaccurate. $58/day = $1740 for 30 days Unhealthy cheap carbs for a single person... $200/month (chicken, beans, rice, milk, chee…

I don't know where you live, but you're the one that is out of touch. 2 tanks a week? 200 bucks a month for shit tier food? Ever heard of cooking? 1400 a month rent? I've spent time in Houston, on minimum wage, and in the past decade. It was alright. I even had the money to go out drinking every weekend, by Rice university at that. Usually when you hear arguments like this and you get down to brass tacks, you start t…

> arguments that allude to the real culprit, things like "I should be able to have extra money for fun" which usually translates to "I blow my money on things I can't afford and then blame the world for being broke."

Should we live in a world where we are wage slaves where 100% of our earnings are spent on the bare necessities such as food and shelter?

One of my friends has $20 to spend on herself after her frugal bills and doing a body crushing job (no "fat" like retirement savings, or medical insurance). I look at it like she earns 50 cents an hour.

Surely we work to be able to spend some money on the pleasures of life? Or is that a dream only for the middle class? Work usually costs us immense amounts of time, let alone the other personal costs of work for many.

Re: Labor shortage or terrible jobs?

#344

Post by throwawaygh »

inetknght wrote: post #176
paulpauper wrote: post #152

Earlier quoted context omitted.

But inflaiton is very low. yeah, CPI excludes stuff, but we're a long way from the 70s and 80s.

> inflaiton is very low No it isn't. My rent is up 80% since two years ago. Food costs are up 40%. Healthcare is up 200%. Good news though: fuel costs are about the same!

> My rent is up 80% since two years ago

WTH where do you live?

> Food costs are up 40%.

Dear god, what do you eat?

Re: Labor shortage or terrible jobs?

#345

Post by lotsofpulp »

throwawaygh wrote: post #308
lotsofpulp wrote: post #306

Earlier quoted context omitted.

Restaurant owners aren’t leaving money on the table because they’re charitable people. There’s so many restaurant openings and closings for so many decades that I think it’s a pretty good indicator of their price dynamics. Software is B2B many times and has efficiencies of scale that restaurants don’t.

I'm not suggesting thy are charitable. I'm only suggesting that they are not omniscient. > There’s so many restaurant openings and closings for so many decades that I think it’s a pretty good indicator of their price dynamics. This may well be true. But I mean, if this were the case, a common failure mode for restaurants would be full tables right up until bust, right? Low prices due to unprofitable margins would mea…

>I'm not suggesting thy are charitable. I'm only suggesting that they are not omniscient.

Sorry, I was just being snarky. I meant that there's so market is so "deep", that it surely represents the true prices.

>But I mean, if this were the case, a common failure mode for restaurants would be full tables right up until bust, right? Low prices due to unprofitable margins would mean lots of demand. Losing money on every head, but lots of heads.

They're not unprofitable margins, they're low margins. Restaurants have a high fixed cost, but low marginal cost. Every day they have to have some amount of staff and food, but once they have sold enough for the day to cover those costs, each extra doesn't cost them much at all due to the relatively low price of food and water and electricity and gas (compared to the labor).

I'm not sure on the statistics of the exact failure mode, but I do know that your run of the mill restaurant can't charge people $30 per entree and get away with it. There is a cap on how much people are willing to pay most places, with the exception being a select few that cater to the rich, have a certain ambiance, reputation, quality of food, etc.

>But, IME, in my area, restaurants that fail in the first year or two do not fail in that modality. They usually have some of the lowest prices, but empty seats none-the-less. Because the food isn't good, or the menu is weird, or they don't do marketing right, or the location is wrong, or a million other things. But in my area at least I basically never see restaurants will full tables fail.

You're right that there are many reasons for them failing, but many can't work on things like marketing location, or quality food, because they can't charge enough money for those expenses in the first place. Celebrity chefs can come out swinging with high priced menus, but not the vast majority who might be doing it because it has low start up costs and they don't need credentials.

Where I live, entrees cost $15 minimum, and with tip, you can budget at least $20 per meal per person. Even with that, I doubt the cooks are making anywhere near a desirable living, and I doubt the restaurant owners are making a decent living, especially if they're paying rent.

Re: Labor shortage or terrible jobs?

#346

Post by andrei_says_ »

rbg246 wrote: post #325
jschveibinz wrote: post #2

This article unfortunately doesn't address the business side of the problem. Fast food restaurants, or place like "Dale's" mentioned in the article, make very little profit. It is most likely below 10%. Here is an estimate: https://www.restaurant365.com/blog/what-is-the-average-profi... . A 10% profit is very modest. That's not the story of the "fat cats getting rich on the back of the workers" that the article is al…

I don't think anyone is saying that these sorts of companies have lots of money. These business have a model that relies on poverty wages changing the minimum wage will disrupt these businesses greatly and I don't see a problem with that. You can't keep a broken thing going because of the businesses that will have to change their model. But sorry I also see your point there needs to be help to business to change thei…

Exactly.

Maintaining laws which force working employees into poverty in order to support inadequate business models is not the solution.

Employees outnumber business owners - more people having spending power is vital for the economy.

Re: Labor shortage or terrible jobs?

#347

Post by bena »

TheOtherHobbes wrote: post #327
lotsofpulp wrote: post #306

Earlier quoted context omitted.

Restaurant owners aren’t leaving money on the table because they’re charitable people. There’s so many restaurant openings and closings for so many decades that I think it’s a pretty good indicator of their price dynamics. Software is B2B many times and has efficiencies of scale that restaurants don’t.

People often open restaurants as a hobby project. They like the idea of running a restaurant, maybe because they like the idea of being sociable or cooking for other people. But they literally have no idea how to run a profitable restaurant. Often they know next to nothing about business in general, and have no idea how to estimate costs/profits. Plenty of other business types operate on a similar semi-amateur basis,…

Bingo.

A lot of people who open businesses aren't doing so to open a business. And most of them don't even know it. A lot of them are trying to open a clubhouse they charge people to be at.

You see it often in the board game/comic/hobby sector. Someone gets it in their head that they could open a shop and it will be great and blah blah blah. But yeah, it goes south because what they really wanted was to play games for a living.

They want to be a business owner, but they don't want to run a business. If that makes sense.

Re: Labor shortage or terrible jobs?

#348

Post by humanrebar »

rbg246 wrote: post #315
nickff wrote: post #254

Earlier quoted context omitted.

Your second sentence is debatable, as it appears that many European countries have high enough minimum total compensations (including benefits and other indirect costs) that unemployment is relatively high, and it can be very tough to get on the economic ladder.

But equally a poverty wage job doesn't get you on the ladder it makes you an indentured servant.

A verified history of showing up in time and not getting fired for theft or negligence is definitely valuable.

Re: Labor shortage or terrible jobs?

#349

Post by throwawaygh »

inetknght wrote: post #295
loopercal wrote: post #250

Earlier quoted context omitted.

>My rent is up 80% since two years ago. There's no major* rental market in the US where this is the case. * - There could be some oil boom in a 300 person town I don't know about I guess.

Houston, March 2019, my rent renewal was $1500/mo for a 12-month lease or $1500/mo for month-to-month or a new contract. Houston, October 2020, my rent renewal was $1500 for a 15-month lease or $2100/month for month-to-month or a new contract. Okay so 80% is an exaggeration. 30% isn't.

> Houston, March 2019, my rent renewal was $1500/mo for a 12-month lease or $1500/mo for month-to-month or a new contract. Houston, October 2020, my rent renewal was $1500 for a 15-month lease or $2100/month for month-to-month or a new contract.

Is there a typo here? You have to sign a longer lease but you are paying the same per month... that's a 0% increase.

And as for month-to-month, paying zero premium for a month-to-month lease is abnormal in pretty much every market...

Re: Labor shortage or terrible jobs?

#350

Post by dmitriid »

fighterpilot wrote: post #265
michael1999 wrote: post #264

Earlier quoted context omitted.

Firms in a competitive market are price takers. None of them individually can raise prices. But an increase of the minimum wage increase affects all of them together, and will cause a new equilibrium at higher prices.

That assumes no substitutes, but in reality this will increase the relative cost of restaurants compared to home cooking which will reduce demand for take out.

Ah yeah. You can always look at how Europe is empty and has very few, if any, restaurants with their minimum wages and healthcare. Oh wait...
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