COVID Economy

[MU82]

Sure, but while "enhanced unemployment benefits are not connected to job growth" defeats the argument that they're preventing people from being willing to work, it also isn't an argument for enhanced unemployment benefits.

Fair.

[Billy Hoyle]

shocker!

https://katu.com/news/local/restaurant-owners-in-portland-see-spike-in-applications-as-federal-jobless-benefits-end?fbclid=IwAR05pe-Bq2ejIqVg8J1XQXereWMssamXMNW4ZH8MKid_0VvPqTyS6p1A_y8

The owner at Chef's Table said his team is seeing about 50% more applicants, but this comes at a time when there are still many jobs to fill.

"This is a welcome influx, but I think the people that are coming back in and applying again are going to find out, or know already, that there are massive job openings and we need this level of applications and candidates for a couple of months to fill up," Kurt Huffman said.

Tilden said he's seeing people with 18-month gaps in their resume, and tells KATU News while that may not be a fit for his restaurants, he's viewing those hires on a case-by-case basis.

[Pakuni]

shocker!

https://katu.com/news/local/restaurant-owners-in-portland-see-spike-in-applications-as-federal-jobless-benefits-end?fbclid=IwAR05pe-Bq2ejIqVg8J1XQXereWMssamXMNW4ZH8MKid_0VvPqTyS6p1A_y8

The owner at Chef's Table said his team is seeing about 50% more applicants, but this comes at a time when there are still many jobs to fill.

"This is a welcome influx, but I think the people that are coming back in and applying again are going to find out, or know already, that there are massive job openings and we need this level of applications and candidates for a couple of months to fill up," Kurt Huffman said.

Tilden said he's seeing people with 18-month gaps in their resume, and tells KATU News while that may not be a fit for his restaurants, he's viewing those hires on a case-by-case basis.

Anecdote is not singular for data.
Now, as for the actual data:

States that withdrew early from federal unemployment programs pushed few people back to work and fueled a nearly $2 billion cut in household spending, potentially hurting their local economies, according to new research.
Twenty-six state governors — all Republican, except one — opted out of the pandemic-era programs several weeks before their official expiration on Labor Day. Enhanced benefits were keeping the unemployed from looking for jobs and fueling a labor shortage, they claimed.
That bet seems to have had a limited payoff so far, according to a paper authored by economists and researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto. The research was published Friday.
The data suggests unemployment benefits aren’t playing a big role in hiring challenges and that other factors are having a larger impact — a similar thrust to other recent research analyzing the policy decisions.
The new paper uses anonymized bank-account data from financial services company Earnin to track 18,648 individuals who were receiving unemployment benefits in late April. Researchers compared individuals in 19 states that withdrew federal benefits in June against those in the 23 states that kept them intact.

https://www.cnbc.com/2021/08/23/ending-unemployment-benefits-had-little-impact-on-jobs-study-says.html

But hey, what's a study of 18,648 people across 42 states compared to the experience of two restaurants in Portland?

[Billy Hoyle]

Anecdote is not singular for data.
Now, as for the actual data:

States that withdrew early from federal unemployment programs pushed few people back to work and fueled a nearly $2 billion cut in household spending, potentially hurting their local economies, according to new research.
Twenty-six state governors — all Republican, except one — opted out of the pandemic-era programs several weeks before their official expiration on Labor Day. Enhanced benefits were keeping the unemployed from looking for jobs and fueling a labor shortage, they claimed.
That bet seems to have had a limited payoff so far, according to a paper authored by economists and researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto. The research was published Friday.
The data suggests unemployment benefits aren’t playing a big role in hiring challenges and that other factors are having a larger impact — a similar thrust to other recent research analyzing the policy decisions.
The new paper uses anonymized bank-account data from financial services company Earnin to track 18,648 individuals who were receiving unemployment benefits in late April. Researchers compared individuals in 19 states that withdrew federal benefits in June against those in the 23 states that kept them intact.

https://www.cnbc.com/2021/08/23/ending-unemployment-benefits-had-little-impact-on-jobs-study-says.html

But hey, what's a study of 18,648 people across 42 states compared to the experience of two restaurants in Portland?

I'll take real world examples (BTW, this is a restaurant conglomerate) over studies that can be manipulated to get to a preferred outcome.

[TSmith34, Inc.]

I'll take real world examples (BTW, this is a restaurant conglomerate) over studies that can be manipulated to get to a preferred outcome.

LOL. "I'll take the anecdote that aligns with my preferred opinion over all your facts and data."

[tower912]

Sounds like a typical COVID argument.

[Pakuni]

I'll take real world examples (BTW, this is a restaurant conglomerate) over studies that can be manipulated to get to a preferred outcome.

Makes sense.

[MU82]

Harris Teeter, the large Kroger-owned grocery chain that's based in Charlotte, just announced that it is reducing its hours of operation due to the labor shortage.

It's kind of an odd decision to do this now -- given that unemployment benefits have dried up so lazy workers who have gotten rich on $300/week are supposed to come out of the woodwork to accept even cruddy jobs.

Stores will now be open from 8 a.m. to 9 p.m., which seems long enough anyway. The chain is calling this a "temporary" move.

[MU Fan in Connecticut]

This week, I'm making my first business trip since the first week of March 2020.
In Detroit to see a customer and then visit a trade show on EVs and batteries and the supply chain thereof.

Strangely, it was just announced today that my industries big every-other-year trade show to be held in Atlanta at the end of October has decided to go virtual at the last minute.

[JWags85]

Harris Teeter, the large Kroger-owned grocery chain that's based in Charlotte, just announced that it is reducing its hours of operation due to the labor shortage.

It's kind of an odd decision to do this now -- given that unemployment benefits have dried up so lazy workers who have gotten rich on $300/week are supposed to come out of the woodwork to accept even cruddy jobs.

Stores will now be open from 8 a.m. to 9 p.m., which seems long enough anyway. The chain is calling this a "temporary" move.

I keep seeing stuff like this and its merging two separate issues unfairly.  Assessing "temporary" or short term enhanced Unemployment benefits as a result of a black swan event should not be piggybacked onto "well some jobs should pay better". 

Its a perfectly fine perspective for people to have and I'm not trying to get into any "people are getting rich sitting home collecting $300 a week" nonsense, but this idea that the benefits need to continue cause people that had "undesirable" service or retail jobs pre-pandemic no longer want to do them, all else equal, is not at all compelling to me. 

If people willingly choose to hold out and as a result companies add financial incentives and bonuses to attract workers, great.  But that shouldn't factor into whether or not that $300 continues.  (All hypothetical of course)

[pbiflyer]

LOL. "I'll take the anecdote that aligns with my preferred opinion over all your facts and data."

Facts have a well known liberal bias.

[forgetful]

I keep seeing stuff like this and its merging two separate issues unfairly.  Assessing "temporary" or short term enhanced Unemployment benefits as a result of a black swan event should not be piggybacked onto "well some jobs should pay better". 

Its a perfectly fine perspective for people to have and I'm not trying to get into any "people are getting rich sitting home collecting $300 a week" nonsense, but this idea that the benefits need to continue cause people that had "undesirable" service or retail jobs pre-pandemic no longer want to do them, all else equal, is not at all compelling to me. 

If people willingly choose to hold out and as a result companies add financial incentives and bonuses to attract workers, great.  But that shouldn't factor into whether or not that $300 continues.  (All hypothetical of course)

I agree with this. But the flip side is also true. I know several people complaining that "people don't want to work anymore," because they can't fill an open position.

The problem, they have many people applying for the job, but they only want someone with experience, and want to pay them crap.

They too are conflating the issue. The reason they can't fill the job is they are not willing to pay what it requires to hire someone, it isn't because "people just don't want to work anymore."

[Uncle Rico]

I agree with this. But the flip side is also true. I know several people complaining that "people don't want to work anymore," because they can't fill an open position.

The problem, they have many people applying for the job, but they only want someone with experience, and want to pay them crap.

They too are conflating the issue. The reason they can't fill the job is they are not willing to pay what it requires to hire someone, it isn't because "people just don't want to work anymore."

Ding, ding, ding.  My company is offering $5 less on average to hire delivery drivers in my market and keep blaming “covid”.  I’m a simple man, but I can look online and see what we’re offering versus market average.  That isn’t covid, that’s just being cheap because gross profits equal bigger bonuses for upper management.  I know restaurant owners who need help but aren’t offering more to get the help because before COVID they could pay a different amount.  Well, the market has changed.  Figure it out

[JWags85]

I agree with this. But the flip side is also true. I know several people complaining that "people don't want to work anymore," because they can't fill an open position.

The problem, they have many people applying for the job, but they only want someone with experience, and want to pay them crap.

They too are conflating the issue. The reason they can't fill the job is they are not willing to pay what it requires to hire someone, it isn't because "people just don't want to work anymore."

Agreed.  Its nuanced on both sides to be sure, I just hate when its presented disingenuously by either side.

Ding, ding, ding.  My company is offering $5 less on average to hire delivery drivers in my market and keep blaming “covid”.  I’m a simple man, but I can look online and see what we’re offering versus market average.  That isn’t covid, that’s just being cheap because gross profits equal bigger bonuses for upper management.  I know restaurant owners who need help but aren’t offering more to get the help because before COVID they could pay a different amount.  Well, the market has changed.  Figure it out

I guess my question would be, what has fundamentally changed for restaurant workers?  Devils advocate, lets say Restaurant X paid $5 an hour plus tips to their servers and had no staff shortage.  Now they want to pay $5 again, why is there no takers?  I'm not trying to be snarky, its a legitimate question.  I guess Im curious how much the market has actually changed versus people with eviction moratoriums, increased UE benefits, stimulus,etc... feeling less pressure to work a job they don't like/doesn't pay enough.  I'm thinking more 20-somethings than those providing for a family.

[MU82]

I agree with this. But the flip side is also true. I know several people complaining that "people don't want to work anymore," because they can't fill an open position.

The problem, they have many people applying for the job, but they only want someone with experience, and want to pay them crap.

They too are conflating the issue. The reason they can't fill the job is they are not willing to pay what it requires to hire someone, it isn't because "people just don't want to work anymore."

This.

[forgetful]

I guess my question would be, what has fundamentally changed for restaurant workers?  Devils advocate, lets say Restaurant X paid $5 an hour plus tips to their servers and had no staff shortage.  Now they want to pay $5 again, why is there no takers?  I'm not trying to be snarky, its a legitimate question.  I guess Im curious how much the market has actually changed versus people with eviction moratoriums, increased UE benefits, stimulus,etc... feeling less pressure to work a job they don't like/doesn't pay enough.  I'm thinking more 20-somethings than those providing for a family.

I can give a couple anecdotes, but they are only that.

1. Time away from the job made them realize how much they are underappreciated and taken advantage of, and in an era where their job is more dangerous because of COVID it wasn't worth it.

2. Time away from the job made them realize that they didn't necessarily need that extra income, and could make by with less if needed (e.g. save money on child care with a stay at home parent). This combined with number 1 take people out of the market without more income.

[Uncle Rico]

Agreed.  Its nuanced on both sides to be sure, I just hate when its presented disingenuously by either side.

I guess my question would be, what has fundamentally changed for restaurant workers?  Devils advocate, lets say Restaurant X paid $5 an hour plus tips to their servers and had no staff shortage.  Now they want to pay $5 again, why is there no takers?  I'm not trying to be snarky, its a legitimate question.  I guess Im curious how much the market has actually changed versus people with eviction moratoriums, increased UE benefits, stimulus,etc... feeling less pressure to work a job they don't like/doesn't pay enough.  I'm thinking more 20-somethings than those providing for a family.

Working hospitality/restaurant sucks a lot of the time because people suck.  When you get away from that and find a happier place, you have to ask yourself at what price is it worth it.

I work a sales and the constant grinding/micro managing from above wears people down.  A lot of co-workers have left and found life to be a lot better.  Apples to oranges but I get it to why the service industry is struggling to retain and rehire people.  I believe in my experiences that you have to invest in your people in meaningful ways or even creative ways to retain them.

I’ll finish by saying it’s a razor thin margin making a restaurant/bar work and that makes it hard for owners.  That means the costs will come down on the customer which is another quandary.  There is no easy answer but without investing in employees, you’re doomed for certain

[JWags85]

Appreciate the responses/perspective. Kind of leans what I was getting at I think.  Its a smaller potential workforce for those jobs, for a variety of reasons.

I totally get that sector is often brutal and not terribly desirable.  And the juice not being worth the squeeze in the examples Forgetful mentioned make sense.  I guess I'm just curious where those, that still need the income, are going if they deem these previous careers as unacceptable or unpalatable now.

[Spotcheck Billy]

My theory: Restaurants were too plentiful previously and prices were too low to sustain most of them in pre-pandemic days which led to Americans dining out much more than decades ago. Now that so many workers tired of that grind and are not returning there will need to be price adjustments and probably many restaurants failing if margins don't improve and less Americans can afford to dine out like previously.

[JWags85]

My theory: Restaurants were too plentiful previously and prices were too low to sustain most of them in pre-pandemic days which led to Americans dining out much more than decades ago. Now that so many workers tired of that grind and are not returning there will need to be price adjustments and probably many restaurants failing if margins don't improve and less Americans can afford to dine out like previously.

I was with you till the last point.  I don't think thats the case.  Those most financially impacted, to a negative extent, by the pandemic, weren't the ones out most often.

I do wonder if this will jumpstart the move to the flat price/no tipping movement.  Its not really something that individual restaurants were able to experiment with.  Most of the test case/transitioned places I knew of were restaurant groups that had economies of scale and ways to shift cost changes around.  But now with restaurants re-opening or popping up in the place of spots that closed during the pandemic, might be a fresh slate to try.

[MU82]

I guess I'm just curious where those, that still need the income, are going if they deem these previous careers as unacceptable or unpalatable now.

Lots of help wanted signs out, and lots of those places pay at least as much as restaurant jobs.

For example, every grocery store I go into has a help wanted sign at the door. They all pay at least $15/hour. No college degree necessary. Some offer benefits. Petsmart here had a hiring day here, advertised $16/hour and benefits. Lowes and Home Depot are both looking for help, $16+ benefits. That kind of thing. Some might dislike those jobs, too, or they might like them. But there is stuff out there.

We have two friends who were thinking they'd work a few more years, one 59, the other 61. But they both decided during the pandemic that they didn't really need to work anymore and called it quits. They won't return to the workforce, I don't think.

[JWags85]

Lots of help wanted signs out, and lots of those places pay at least as much as restaurant jobs.

For example, every grocery store I go into has a help wanted sign at the door. They all pay at least $15/hour. No college degree necessary. Some offer benefits. Petsmart here had a hiring day here, advertised $16/hour and benefits. Lowes and Home Depot are both looking for help, $16+ benefits. That kind of thing. Some might dislike those jobs, too, or they might like them. But there is stuff out there.

We have two friends who were thinking they'd work a few more years, one 59, the other 61. But they both decided during the pandemic that they didn't really need to work anymore and called it quits. They won't return to the workforce, I don't think.

You just called grocery stores "cruddy jobs".  I wasn't just talking restaurants, I meant service/retail in general.

[jesmu84]

Appreciate the responses/perspective. Kind of leans what I was getting at I think.  Its a smaller potential workforce for those jobs, for a variety of reasons.

I totally get that sector is often brutal and not terribly desirable.  And the juice not being worth the squeeze in the examples Forgetful mentioned make sense.  I guess I'm just curious where those, that still need the income, are going if they deem these previous careers as unacceptable or unpalatable now.

I thought I saw a study that showed warehouse/manufacturing was way up lately?

[MU82]

You just called grocery stores "cruddy jobs".  I wasn't just talking restaurants, I meant service/retail in general.

It's a different cruddy job, one that could appeal to somebody wanting a change from being a waitress/waiter who had to beg for tips.

Also, all retail isn't equal. For example, Costco and Trader Joe's are considered very good employers, though I don't know if they have the kind of openings that Publix and Kroger do.

As jesmu might have been alluding to, Amazon and others are desperate for warehouse staff.

[forgetful]

Appreciate the responses/perspective. Kind of leans what I was getting at I think.  Its a smaller potential workforce for those jobs, for a variety of reasons.

I totally get that sector is often brutal and not terribly desirable.  And the juice not being worth the squeeze in the examples Forgetful mentioned make sense.  I guess I'm just curious where those, that still need the income, are going if they deem these previous careers as unacceptable or unpalatable now.

One thing to remember is that we were at 3.8% unemployment before COVID. That was historically ridiculously low.

We are now at 5.2%, which is still historically low/average. So we are not talking about a lot of people out of the market. So it doesn't take that many to realize that economically it doesn't work for them to return to the labor market (across all job types/salaries).

And an important question. Does anyone know if Gig workers are still counted in unemployment? During COVID they included them in unemployment, and I'm unsure if they ever backed them out.

There are a decent number of people that have no desire to return to the traditional labor pool (especially for minimum wage) when they can make the same or more in the gig economy.

An example of these impacts occurred when I picked up pizza from a popular place in town. There were about 20 Doordash/Grubhub/Postmates etc, people waiting to pick up orders (not exaggerating, possibly under-estimating). The place was bogged down, because they had only ~6 people working total including waitstaff, cooks, and registers. They were complaining that they can't hire anyone...yet there are 20 gig-workers simply waiting to pick up food.

There is a major new competitor for labor that has grown exponentially.