The Great Resignation is Everywhere
Today, let's look at retail and restaurants.
Quote of the Moment
We are inconsistent creatures who routinely court the catastrophes we most fear. We do so because we don’t feel the pain of others as our own, because there are social constraints on our actions and imaginations, because the future is an abstraction and the pleasures of this instant are a siren.
| Ezra Klein, It Seems Odd That We Would Just Let the World Burn
We are witnessing a seismic shift in customer-facing work in retail and restaurants. This is just one thread of the Great Resignation, as millions are reassessing the tradeoffs between work and life, between the jobs they know and new paths to tread.
In Retail workers are quitting for better-paying jobs, Abha Bhattarai underscores the out-migration from retail work:
Retail workers, drained from the pandemic and empowered by a strengthening job market, are leaving jobs like never before.
Americans are ditching their jobs by the millions, and retail is leading the way with the largest increase in resignations of any sector. Some 649,000 retail workers put in their notice in April, the industry’s largest one-month exodus since the Labor Department began tracking such data more than 20 years ago.
Some are finding less stressful positions at insurance agencies, marijuana dispensaries, banks and local governments, where their customer service skills are rewarded with higher wages and better benefits. Others are going back to school to learn new trades, or waiting until they are able to secure reliable child care.
Overall, retailers had nearly 1 million job openings in April, more than twice as many as they did a year ago.
Retailers are finding it hard to coax workers back to low-pay jobs, and they will have to increase pay and benefits, ultimately.
In the foodservice sector, we continue to hear the #lazy-worker thread as restauranteurs find it hard — if not impossible — to attract workers back to low-paid, low-benefits, and unpredictable jobs.
Jim Swift, in The Legend of the Restaurant Workers Too Lazy to Work, uses the example of the closure of Dale's Diner in suburban Toledo Ohio, where the owner, Bill Anderson, claimed he closed the Diner because he couldn't hire any cooks. He posted a sign on the door that stated unemployment benefits made it possible for restaurant workers to stay home.
So the picture that Anderson crassly paints of former restaurant workers on the dole, lazily lolling about on their couches while enjoying unemployment benefits, is undermined by the reality that many of those workers are off looking for—and getting—other jobs. And the complicated labor market economics aren’t limited to the food-service sector, even though much of the discussion is focused there. As the Washington Post noted yesterday, nearly 650,000 Americans quit jobs in the retail sector in April—a record—because they want other kinds of work and employers in other industries are finding ways to attract them.
Something similar is happening up the wage ladder in desk jobs, too. People got a taste of working remotely, and many of them liked it. As the Wall Street Journal, looking at the same data, observes: “The percentage of Americans leaving employers for new opportunities is at its highest level in more than two decades.”
In the Atlantic, Derek Thompson notes that this job-quitting could be a trend. Or it could be nothing:
Making predictions is hard, not only because the future is hard to see, but also because the present is hard to grasp. The data on quitting could be an early sign that worker power is ascendant after decades of stagnant pay and gutted labor law. But it could also be a brief statistical fluke amid this summer’s generally spasmodic economy.
Derek Thompson makes a deep policy statement in that Atlantic piece:
The job of the government is not to ensure a supply of workers at whatever wage rates businesses set. And workers’ having the power to say no is not a policy problem that the government needs to solve. For decades, though, Washington and America’s statehouses have helped rig the country’s policy infrastructure in employers’ favor.
Now if Washington and the States make more moves to increase pay and benefits for customer-facing jobs so that workers can make above-the-poverty-line pay.
Ginia Bellafante zooms in on New York restaurant workers, in How New York Waiters Got the Upper Hand:
Conservatives and many small-business owners across the political spectrum have blamed the labor crisis on stimulus benefits that they argue de-incentivize a return to work. But recent research has delivered a more complex accounting. Low wages and diminished tips are clearly driving workers away; a lack of child care has been another problem. One survey, conducted between October and May by the advocacy group One Fair Wage, in conjunction with the Food Labor Research Center at Berkeley, found that among nearly 3,000 respondents, 39 percent listed “concerns of hostility and harassment from customers” as one of the reasons they were leaving their jobs. In order to stem further exodus, One Fair Wage has assembled a million-dollar fund to offer grants to restaurant workers to supplement earnings until those wages increase.
Unemployment insurance has undoubtedly given some people a cushion, but more valuably it has provided the gift of greater flexibility and choice — the option to walk away from a job when a customer tells you he is going to call his lawyer because of a sandwich. “People are thinking about what they want to do,” the economist James Parrott told me. “This is a good thing. As an economist, it is what you want to see happen.”
New York City’s recovery will depend in large part on the success of a restaurant industry now required to extend its definition of prosperity to include the ability of workers, both front and back of house, to live decently. In this case, the rhetoric of returning to normal is inapt, because “normal” was dysfunctional and bleak. Before the pandemic, as Mr. Parrott’s data indicates, 84 percent of restaurant workers in New York City made less than $40,000 a year, with roughly a quarter of them receiving food stamps.
Restaurant workers, especially back-of-house -- the line cooks and dishwashers -- have been subsidizing the lower cost of restaurant dining. People are willing to pay for better ingredients, nowadays, but that's as far as their largesse goes. Restauranteur Danny Meyer put it this way:
We haven’t done a great job persuading them that what we really need to be paying for is people. When you see an heirloom tomato on a menu, you know that you are going to pay more for it. Restaurant workers have been subsidizing dining out, and it is going to take some education to change things.
Maybe Bellafante is a bit starry-eyed about possible professionalization of restaurant work:
One potential outcome of the pandemic may be that restaurant work becomes more professionalized and less transient, adhering more closely to the European model. “I try to think about what people want from the workplace,’’ the acclaimed chef Alex Raij told me. In a moment in which workers have more leverage by virtue of their scarcity, they are freer to ask for more opportunity. Ms. Raij has been exceeding the minimum wage in her restaurants for years. But because her operation is relatively small, there are not layers upon layers of management structure, so she has had to be creative in coming up with paths to advancement for people who are looking for more of a hand in terms of operation.
But I will roll with it. The Federal government is eager to get people into community colleges to pick up new skills, but perhaps we should be focusing on on-the-job training for people where they are already employed. Why can’t restaurant staff be better trained through some government-supported program? Let’s teach wait staff to make table-side Ceasar salad, and learn more about wine. Let’s train line chefs to do more than grill steaks. Let’s support companies that build a path to managerial and higher-level operational jobs for the frontline staff.
I’m all for bringing back manufacturing, but there are restaurant jobs in every city, every town, and every neighborhood and they don’t have to be dead-end jobs.
We just have to agree to pay more for better service and better food and the Federal and local governments need to support programs to make restaurant work more professional: a career, not a stop-gap.
Point taken about diners having to get used to paying more for better, more professional service. But there’s a larger issue that extends across all markets and all industries — I think it’s essential for future prosperity and social stability. That is that investors as a class need somehow to develop a tolerance for lower returns on their money. Businesses commit themselves to predatory practices in hiring and maintaining relations with their employees because they know if earnings slip, investors can always find a way to get back the returns they expect. Investor expectations only increase year on year because automation and competitive pressures keep creating new ways to extract rent from a portfolio — virtually always at the expense of the workers who create the actual value. Somehow, investors need to recognize the predatory nature of this habit and feel a little remorse for it.