Labor shortage or terrible jobs? • Hacker News Board

Re: Labor shortage or terrible jobs?

#891

Post by jsdwarf » Sat, May 01, 2021, 5:22 PM UTC

nikanj wrote: post #877

anovikov wrote: post #845

Earlier quoted context omitted.

In this case, why bothering operating a restaurant at all (it's a terribly terribly complex business to manage)? Just buy real estate and sit on it? I always wondered how restaurants even work - how can owners be motivated to keep themselves in this endless, poorly paid grind. In my opinion, when this is not about large chains that are effectively self-reproducing machines that don't depend on any people's motivation…

That’s an excellent question, and touches many other avenues of life too. Why bother with producing anything, when asset appreciation provides bigger gains with no effort needed

Because your activity contributes to the appreciation. A good restaurant attracts a lot of people, which in turn attracts other businesses (think of bookstores next to popular cafés). This increases the worth of the property.

Re: Labor shortage or terrible jobs?

#892

Post by TOGoS » Sat, May 01, 2021, 5:26 PM UTC

blihp wrote: post #665

deburo wrote: post #618

Earlier quoted context omitted.

>If they honestly can't afford to pay a living wage It's not logical to kill businesses by arbitrarily raising the minimum wage. Do you think the people they employ are better off not working at all? These people may not have a decent enough salary, but they get to work as opposed to staying at home and degenerate (mentally and physically). I always thought the better solution is to help them financially in other way…

If raising the minimum wage will do them in, they're already halfway there if things are really [1] that dire and will end up there soon enough. So yes, people are better off not working for those types of businesses. If a business can only remain solvent by paying unreasonably low wages, it puts downward wage pressure on competing businesses and traps unskilled workers in a labor pool of dead-end jobs with little ho…

> there are a variety of options between the extremes.

There are a variety of options completely outside of that continuum.

Like, how about a democratically planned economy where we intentionally work on things that actually help society instead of just whatever happens to make the most profit for the current owners?

I think a big part of burnout is that the work we're doing is clearly pointless. I'm stuck writing debugging shitty Android apps all day. Can I please go plant some forests or something?

Re: Labor shortage or terrible jobs?

#893

Post by malandrew » Sat, May 01, 2021, 5:28 PM UTC

blihp wrote: post #665

deburo wrote: post #618

Earlier quoted context omitted.

>If they honestly can't afford to pay a living wage It's not logical to kill businesses by arbitrarily raising the minimum wage. Do you think the people they employ are better off not working at all? These people may not have a decent enough salary, but they get to work as opposed to staying at home and degenerate (mentally and physically). I always thought the better solution is to help them financially in other way…

If raising the minimum wage will do them in, they're already halfway there if things are really [1] that dire and will end up there soon enough. So yes, people are better off not working for those types of businesses. If a business can only remain solvent by paying unreasonably low wages, it puts downward wage pressure on competing businesses and traps unskilled workers in a labor pool of dead-end jobs with little ho…

> while giving them breathing room to figure out 'what next?'

I'm dubious of this claim. My experience from observing many friends in this situation at different economic levels (enough savings to take a break in US. Unemployment benefits in Europe) is that they rarely use the time to figure out what is next. Instead they most often use the time to relax and only spend time trying to figure out what is next when pressured to do so by impending financial circumstances (doing nothing depletes savings for those in America and unemployment benefits run out eventually in Europe).

Whether the amount of time afforded by savings or unemployment is 3 months or 2+ years, it's only the last 1-2 months where most people spend time figuring things out.

Re: Labor shortage or terrible jobs?

#894

Post by ItsMonkk » Sat, May 01, 2021, 5:28 PM UTC

bayesian_horse wrote: post #883

ItsMonkk wrote: post #848

Earlier quoted context omitted.

This is something that is quite nuanced that isn't apparent until you really look into the numbers. When something happens that universally makes the labor costs go up, and you expect for many businesses to go into the black, what you will instead see is that the very worst company goes out business and all of the others will put pressure on their land owner for lower rents pointing out that they are next. The landow…

No, higher minimum wage shouldn't increase the labor cost "universally". Most of the cost increase would be felt by those employers who actually paid wages below the new limit. Which isn't even that great a portion of the economy. There might be some effect diffusing upwards, but I doubt it.

Right, which is why I clarified each time I said that. Software costs don't go up as they don't rely on minimum wage labor. For restaurants, that almost universally rely on the cheapest labor, this is the case. If Burger King and McDonalds both have higher labor costs, both put pressure on their land owner, and both don't end up caring.

Re: Labor shortage or terrible jobs?

#895

Post by malandrew » Sat, May 01, 2021, 5:32 PM UTC

TOGoS wrote: post #892

blihp wrote: post #665

Earlier quoted context omitted.

If raising the minimum wage will do them in, they're already halfway there if things are really [1] that dire and will end up there soon enough. So yes, people are better off not working for those types of businesses. If a business can only remain solvent by paying unreasonably low wages, it puts downward wage pressure on competing businesses and traps unskilled workers in a labor pool of dead-end jobs with little ho…

> there are a variety of options between the extremes. There are a variety of options completely outside of that continuum. Like, how about a democratically planned economy where we intentionally work on things that actually help society instead of just whatever happens to make the most profit for the current owners? I think a big part of burnout is that the work we're doing is clearly pointless. I'm stuck writing de…

> I'm stuck writing debugging shitty Android apps all day. Can I please go plant some forests or something?

If this was the status quo, there'd be just as many people thinking "I'm stuck outside doing manual labor planting trees. Can I please spent time doing something mindless sitting at a desk in a climate controlled workspace instead?"

Someone out there is deriving value from the android app you're debugging or else it would not be economically viable to keep paying you to do that job.

Re: Labor shortage or terrible jobs?

#896

Post by hinkley » Sat, May 01, 2021, 5:32 PM UTC

blihp wrote: post #548

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…

A 10% margin also often doesn't tell the whole story of how they make their money. Nearly since its inception, a substantial portion of McDonald's long term profit came from the appreciation of the real estate the stores were built on. Operating a business on it just made it cash flow positive during the holding period. So it was essentially a REIT that happened to operate a fast food chain. Even for many mom-and-pop…

Then you have the reverse problem where the stores or restaurants are renting their space. As the neighborhood density increases, their customer base goes up but so does rent. And since location matters, you can’t just move if you don’t like the rent prices, so they can squeeze you pretty hard. Goodbye profit margins.

In my old neighborhood there were always a few empty places because they were pricing people out, and few wanted to pay the new prices.

Re: Labor shortage or terrible jobs?

#897

Post by ruined » Sat, May 01, 2021, 5:33 PM UTC

Broken_Hippo wrote: post #782

ruined wrote: post #727

Earlier quoted context omitted.

>Now, what does adequate mean? I guess a place to sleep, a place to clean oneself, food and clothing seems like a reasonable bar for a wage above poverty. Are there many full time jobs in the US that do not allow that? https://www.cnbc.com/2020/07/14/minimum-wage-workers-cannot-...

And as an aside: This is for a two bedroom - and it is important to afford a two bedroom. Single parents often need to keep a two bedroom even if their child or children only visit every other weekend. A one bedroom often isn't significantly cheaper, and a studio isn't always cheaper than a one bedroom.

read the entire first sentence

Re: Labor shortage or terrible jobs?

#898

Post by Jweb_Guru » Sat, May 01, 2021, 5:33 PM UTC

Noumenon72 wrote: post #784

Jweb_Guru wrote: post #309

Earlier quoted context omitted.

If a business is operating profitably by paying people wages below the cost of living, it is being subsidized by the government and therefore is not independently profitable in any meaningful sense.

I view the government as setting up a playing field which entrepreneurs than explore to find profit opportunities. With welfare and especially the Earned Income Tax Credit, the government created a class of people who can be profitably employed by paying $X below the cost of living. This was intentional, a way to keep people in the market economy even though they're not productive enough to survive in current conditi…

The subsidies in this case do not exist so that businesses can exploit underpaid workers, though (and are not comparable to something like a rent-controlled apartment, where landlords are just prevented from charging so much that they'll drive out the workforce rather than actively subsidizing with things like food stamps or welfare). They exist because the US is reluctant to let people starve in the streets and die, the fact that you interpret them as an effort to "keep [unproductive] people in the market economy" notwithstanding.

The government bumping up unemployment to the point that people don't have to take certain types of jobs that rely on underpayment for profitability does not contradict that goal, which is why many people are not that sympathetic to small business owners complaining about it.

Re: Labor shortage or terrible jobs?

#899

Post by 6510 » Sat, May 01, 2021, 5:34 PM UTC

throwawayboise wrote: post #741

6510 wrote: post #729

Earlier quoted context omitted.

There is a working restaurant a few blocks away.

And they're fully staffed. What do all the employees of the shuttered restaurant do?

This is the system we are using. I don't have to like it. Scaling is done something like: If there is room for 4 shoe stores and there are 7 its going to be difficult for all of them until 2 close.

Re: Labor shortage or terrible jobs?

#900

Post by SantalBlush » Sat, May 01, 2021, 5:34 PM UTC

throwawayboise wrote: post #734

ehnto wrote: post #717

Earlier quoted context omitted.

Right, and raising the minimum wage is an attempt to control that by putting the costs back on the employer.

Who will simply either pass the costs along to the consumer, or shut down.

This isn't correct. The amount of costs passed along to the consumer depends on the supply and demand elasticities of each particular market. That's Econ 101.