TLDR Waiters' pay has not yet risen enough, and meal prices increased accordingly, for them to continue to live in SF. Establishments are reducing staffing instead. SF micro economic disfunction continues.
"Analysts are also calling a lack of employees one of the biggest problems in the restaurant industry today." (My note: No lack of employees, just lack of employees willing to work for current pay offered.)
EDIT: "The demand for highly skilled help is especially acute in Washington, where a boom in restaurants run by creative chefs is outstripping the region's labor force," The Times wrote.
This is true of every field. SF is unaffordable for teachers and firemen and social workers. The solution is part zoning more housing, and part employers charging and paying more.
Does the city really need another stadium? Or would more housing have been better?
While we are on the topic can we work towards eliminating the idea of required tips and it being an expected part of a servers wage? I don't care if the base price of food costs more if it means they have a normal wage.
A tip should be an additional non-expected gesture.
Are tips required? I know they're automatically included for large groups (at least where I live). Which I find annoying as a customer.
But actually to your other point. If I'm interested in working as a waiter at some restaurant, but I'm uncomfortable with tips being an expected part of my wage, then why would I either pursue that job, or accept it under those guidelines? Couldn't I work somewhere else instead and get the same amount of money?
Maybe not "required", but they are highly expected of you and you are only hurting your server if you don't. The expected percentage of your tip somehow keeps going up as well. It's a percentage so this makes little sense to me. The prices are already going up so the tip would also go up as it is a percentage of the base price. Regardless it has gone from an expected 10% 20 years ago to an expected 20% today.
That's true, it is more expected than not. I feel bad if I leave too low of a tip. Unless the waiter actually did a really bad job, which happens - fortunately not often.
15% for median service. 10% for 1 or more standard deviations below, and 20% for 1 or more standard deviations above.
So you pay 15% on 2/3 of your meals, 10% on 1/6, and 20% on 1/6. But the mean is also 15%.
Giving 20% to everybody is Lake Wobegon syndrome, where all the servers are above average. If you don't adjust your tip based on the quality of service, you remove the incentive to strive for above-average service. You end up with servers that sit down at your table when taking your order and chitchat with you, instead of just doing their job professionally while you can see or hear them, and bitching about it in private later.
If you go to Chilis or anywhere with those tablets at the table and pay with your card it will auto suggest a 20% tip.
I've seen some other places with a different kind of tablet that simply has boxes for different dollar amounts of no tip, but they are typically not places that even have servers. Why would I tip at a retail shop when all I did was grab something off a shelf and bring it to the counter?
I’m not sure how old you are or where you’re from, but I haven’t heard of 10% being an acceptable tip since maybe the 80s (70s) anywhere except rural areas.
20 years ago, it was definitely 15% minimum, but somewhere between 15% and 20% was very common (mandatory large party tip was usually 18%).
Regardless, you are correct that the expected percentage has gone up over time, and that a non-tipper or low-tipper is hurting the wait staff when they don’t leave a standard tip.
The most likely outcome of this is that prices go up to factor in a 20% “tip”, the owners/managers keep part of it and pay the workers only slightly more. The formerly tipped position will end up making less.
Another possible (non-cynical) outcome is that the 20% is spread out to both front and back of the house staff. Again, wait staff make less.
If the wait staff stand to make less, they will never stand for changing the system. That’s why I doubt that it will ever change in the US.
Is the system reasonable and/or fair? Good question. Whatever the answer, it’s the system we’ve got, and the inertia is real.
You can't just make a central decision about it and pretend that people will follow. How tip works is a custom, and it's a product of tradition, game theory and human psychology. There are no laws that require customers to leave tips.
It’s more correct to say a shortage of business models that can pay market rate for labor. If the restaurants can’t raise their prices enough to pay market wages, then it’s not like they are unwilling, just unable.
Its not like these factors stay constant. What made sense five years ago might not make sense today. And as we know restaurants go under and new ones start up all the time.
All businesses face the challenge of continuously preserving a balance that (a) allows them to make money and (b) allows them to exist at all.
No, they're not. The judge blocked the effort to raise minimum wages, IIRC.
The OP is basically correct that restaurant owners don't want to raise pay rates to a level that meets a "living wage" standard. They don't want to raise what they charge customers to the point where they could pay those rates, of course--but I'm not sure there's particularly good data to support the assumption that their customers would balk at doing so. These are restaurants with wait staff in high-cost cities, and raising the average ticket price per diner by $2 or $3 may not be enough to dissuade very many diners from choosing that restaurant. (I mean, I'm sure there's somebody out there who'd look at a menu and say, "I'd pay $28 for that flat iron steak, but $30? No deal!", but it seems like it'd be uncommon.)
> Businesses can always raise prices to cover higher costs. If they can’t, they’re not viable in the first place.
Interesting that 'individuals can always ask for a raise to cover higher costs; if they can't, they're not viable in the first place' might be true, but it sure sounds heartless.
The difference (and why I don't think your statement is particularly true) is one of control. Businesses can and do continuously adjust pricing to reflect the market, workers cannot.
There are zoning issues that prevent the market from buildings an adequate amount of housing to keep up with demand. You can't just go turn a single family home in Palo Alto into a small apartment complex.
There is not an equivalent quota or limit on the number of employees who can work as waiters.
The shortage, at least in SF, is fundamentally housing. Raising waiter's wages until they can outbid nurses and programmers on apartment rent, and then those professions will flee the city. Housing isn't necessarily inflexible in supply, but policy in California has allowed tiny minorities of people to stop housing from being built, while commercial building continues with little restriction.
> "A judge just blocked another effort to raise wages for restaurant workers in DC"
What a dishonest article. It's not an effort to raise wages - it's an effort to raise minimum wage. You may have different opinions about how it will affect actual wages, whether it will actually increase them or not - because being put out of a job is a 0$ wage.
But either way, even if you think that raising minimum wage WILL result in higher wages, you still have to admit that these things are still different and require some arguments to link them together. Silently misplacing one for the other, as if this assumption is so self-evident, is nothing but propaganda.
Restaurants already run on extremely thin margins. Raising waiter's pay would mean raising meal prices, as you say. That raises the cost of living for everyone who eats out. Maybe service staff shouldn't ever eat out, but what happens when the same issue hits grocery store workers, and the stores either raise food costs or shut down?
It is not a viable policy to legislate raised wages, and then legislate even higher wages when the cost of living increases in turn. The money actually has to come from somewhere. Businesses will raise prices to the point the market will bear, for both the lower and upper class. This is the fundamental issue with wage hikes. $15 is not more than $10 if everything costs 1.5x more after wage increases. Deregulated markets are able to (and have in the US up to this point) create more material wealth for everyone even as wages stay stagnant in dollar value.
The problem is not greedy businesses. They want workers who they can hire for wages they can afford. Due to inflated housing prices, the cost of living is too high for workers to live in the city, and thus the "living wage" is unaffordable for businesses. Why are the housing costs so high? There's a lot of evidence that zoning laws and regulated markets play a large role[0].
This isn't hugely surprising - margins for restaurants are extremely thin, so the eventual end game at this rate is for establishments that are extremely expensive and able to actually pay their workers decently to be the only choice available. Upping the minimum wage for them is really just going to result in speeding up the process (you cannot extract blood from a turnip, after all) and putting more people out of work even faster. Something's gotta give here, and it's unfortunately probably not going to be the people who were living and working in SF before the tech boom.
If SF is so ridiculously expensive, it makes every kind of sense for restaurants to raise their prices accordingly.
The only reason for restaurants to have paper thin margins is if there are too many of them. That will probably change once their waiting staff disappears.
I'm preeeety sure each and every restaurant owner is keenly aware of how their business will fluctuate if they change prices. This is their livelihood after all.
I own a foodservice business and it tends to be a mixture of both. You're not going to be able to run an establishment without at least some business acumen, but everyone who's ever worked in the industry is fully aware that the pay is complete shit in terms of effort expended. So, as a result, owners pretty much have to be very passionate about the industry in order to even contemplate opening their own place to begin with - and this is here in the Midwest, God help anyone who wants to open something in a major coastal city.
I don't doubt it, but that doesn't change the basic analysis. If prices are too low to live on, that means supply is too high. Restaurants try to stave off the inevitable by underpaying their staff, but in the long run, a shortage of staff is not going to save their business.
And honestly, if people can afford to pay sky high San Francisco prices for everything else, they can also afford to pay them in restaurants.
I notice that a lot. My accountant was way too cheap in my opinion, and I told him that. After years, he finally raised his prices recently, and I thanked him for it. He needs to eat too. Same for the guy who remodeled our house. He has no time for all the work he's got, but he doesn't want to raise his prices, despite working for half the rate I work for.
Don't be afraid to charge what you're worth and what your customers can afford.
(My clients are mostly banks. I know they can afford me.)
I's really interesting that people are willing to pay outrageous sums in one area (e.g. rent) but then are not willing to pay more in other areas (food). I am not sure how these imbalances happen.
The problem is the cost of rent for individuals and businesses. Asides from housing costs, SF's cost of living is pretty standard for a city (a little higher than most, but depends on the area). There just are not enough housing units in the Bay Area. Worse, the new units entering the market tend to be mostly market rate, with a few "affordable" units thrown in.
Raising wages will never fix the problem. SF needs to build up or change laws to deincentivize people from living there (e.g. higher taxes on high-income tech workers). The latter has other issues associated with it, but would at least encourage the decentralization of tech talent to other parts of the country.
It doesn't solve the overall problem, but it can solve this particular one; if they pay enough, waiters will be able to displace some existing renters and/or be willing to travel from even further away.
> the eventual end game at this rate is for establishments that are extremely expensive and able to actually pay their workers decently
That's not the end game, because there is an endless supply of low paid labour willing to commute hours to work. Especially if the tips are better.
The places will be expensive, no doubt, but labour will capture a very small proportion of the hike, with the rest going to capital like brand and real estate owners.
The tech elite seems willing to cling to these sorts of market-mediated fair world falacies, because they refuse to acknowledge their own position in the capitalist society.
I own a foodservice establishment. Labor is absolutely our biggest expenditure immediately after rent. Additionally, that "endless supply of cheap labor" still needs to be reliable enough and able to actually show up, plus costs in hiring and training and all of that sort of thing. This isn't coming from some webshit programmer, this is what I see every day.
Of course. But is your business in the center of a major metropolis and as a consequence of that, pais for labour a multiplier proportional to other costs in the area, like rent and services? I doubt it, you might have higher costs but you don't pay 3x the average waiter salary.
Look at Sweden and Denmark. There's very little table service. The future is not decent wages, it's less service. And I don't see that as a problem. Other than very high end places, there is almost zero value add to a waiter. On the contrary, waiters being excessively nice and pandering so they can get a big tip is a big negative in my book.
If housing doesn't expand, prices would just presumably spiral upwards until waiters are paid as much as average tech workers and only the mega-rich can afford to eat out.
So we need some kind of waiter robot, that can take orders, deliver food, wipe down a table, and roll silverware into napkins. This is clearly a better solution than paying a living wage to people.
Then we can just detach SF from California, and let it float out to sea.
The city could start by eliminating the sales tax and pile it on property taxes: it immediately increases worker wages, and lowers the value of properties in one go, affecting mostly those that do not consume in the city at all.
> The city could start by eliminating the sales tax and pile it on property taxes
Yes, sure, all they have to do is secede from California so that they are no longer subject to California’s Constitutional limits on property taxes and they can get right on that.
Anecdata but now seems relevant after reading this. And this is from 2013/2014. I visited SV on business trips and was boarding in downtown San Jose for a week or two on each trip.
I was always surprised that the waiting staff would actually stand with me and engage in conversation while I queued up to be seated. Travelling from the U.K. I had never experienced this level of "niceness ?"
Later I was educated that they are basically only earning anything meaningful from the tips. The wages were puny and they were increasing their chances of getting relevant tips by being so nice.
On a side note, were you as a European* stunned and horrified to see the featureless concrete urban sprawl that "Silicon Valley" actually was when you came for the first time?
* yes, yes, some people will contest classification of Brits as Europeans
Not really. If they want to live in the city and can't afford it on their current pay, then maybe focus on getting a different job.
That seems logical to me.
The app will alert you when your food is ready at the pass-through.
TBH, some restaurants can benefit more from this than others. Portillo's strikes me as one that could greatly benefit from more judicious use of automation. By my count, every order is taken at least two times, and recorded at least three times.
This has no doubt contributed to my orders being at least 20% wrong every single time I have eaten there. I have no idea how they can stay in business.
The payment system has one version of the order. The kitchen system has another version of the order. The bag has yet another shorthand version. Each version is worked by a different employee, but no one ever cross-checks. Madness.
Yes, in as much as forcing waiters (and presumably other hourly service workers) to commute long distances for work has costs... more traffic, more stress / worse health, family impacts (less time with kids).
If you're a strict libertarian, I suppose you could argue they should bootstrap themselves a little harder. But, I'd prefer we make life as easy as possible for as many people as possible.
After all, the only reason real estate prices in SF and the surrounding area is so out-of-control is overly strict zoning. Allow more multi-family dwellings, preferably close to places of work, and it's a net positive for society.
we also have service jobs in my medium sized Mid-Atlantic city where you can rent a studio for $600. no one is "forcing" waiters to commute two hours into one of the most expensive cities in the world.
So you're perfectly willing to shit on service industry workers - what happens when the service industry is priced out? Are you ok with what happens then?
I'm honestly not sure how to even begin explaining how unlikely it is that the entire service industry gets priced out of a wealthy area.
if a huge amount of restaurants close, there will be a sudden increase in demand for tables at the ones that remain. the remaining restaurants can then increase their prices a lot and afford to hire servers. if that doesn't happen and all the restaurants actually leave, it implies that the residents didn't value dining out very highly in the first place.
Less waiters in the city presumably means rising wages for the waiters that are in the city. If wages can't rise enough to have adequate staff, restaurants close. If restaurants close, real estate values decline. If real estate values decline, waiters can afford to live in the city.
Unfortunately, subsidized housing and welfare enable businesses to pay less than a living wage. People that are in poverty are kept in poverty, and the businesses have a captive labor force.
It's almost like there's a specific cause and effect.
Not necessarily: prices can rise. I've seen first hand how many things increased prices in the last few years, and is all most likely a consequence of rent.
All in all, for a city that has an annual budget of 11 billion dollars, the city is a mess, and times of plenty beget times of crisis. At some point even people with RC will leave the city, and the downturn will not be negotiable.
The question is, why is the rent so high? The reasons are purely economic. Arbitrarily low number of housing units available (zoning laws) and subsidized behavior. Rent-Controlled apartments further remove inventory from the marketplace overall, pushing the increased cost onto other renters. Higher taxes for government subsidized transportation (buses, metro, even roads) raises the rent. You're not saving anyone any money by building these things, only moving the cost (for mass transit, people will invariably respond with the immeasurable economic benefits these things provide, but they are mistaken as to whom actually benefits).
Democracy at it's finest. I expect the rent and real estate to keep rising perpetually, that's what the voters seem to be demanding, even if indirectly.
I think San Francisco is simply explained by the Georgist interpretation of the same city in the 1900's. The city awards landlords with lots of income from corporate and sales taxes, and reduced property taxes. Then piles on rent-control to produce pseudo-landlords. The interests are very misaligned, and thus you get high rents in old buildings, homeless people and a transient-disproportionally foreign- population.
But the music stops: at some point the bargaing of a tech-job will not be enogh to keep people in.
I think we'll see a new age in public housing and basic income in SF before the music finally stops there; we might see some dips and down turns, but it's got a long way to go before it approaches that cliff.
With the right political administration in power at the right time, they might even be able to wrangle a bailout from the rest of the country! The midwest successfully did it vis-a-vis UAW and GM (sure, the fatcats got a taste, but the real money was in preserve the taxbase of those towns and saving the workers' pension).
I agree. Tipping is now approaching 20-25% in my Canadian city, it's adding on so much cost to going out. It's about time to rationalize this space and get some better models.
You understand that in order for it to be a gratuity, it has to be voluntary, right? I have tipped 15% for median-quality restaurant table service my entire life, and will continue to do so at that rate as long as tipping still exists. It has scaled up with the menu prices, because it is a percentage.
If "the tip rate is going up", that is entirely a problem of your own making. You chose to tip more. You can also choose to tip less, or not at all (by going to restaurants with counter service).
If you as a worker wish to represent 20% of the cost of my meal off the top, in addition to whatever portion you also may get from the menu list price, you are a growing cost, one that invites cutting. There are vending machines that make entire fresh, oven-baked pizzas now. The robot does not get a tip. The service worker just cleans the thing according to a schedule, and refills the ingredient hoppers. Even McDonald's is installing robotic cashiers.
It's easy to find tipping guides written by current or former service workers that self-servingly inflate percentages over the historic tipping rates. But those writing such guides are basically advertising that they are becoming less productive workers. That seems like a dangerous thing to do in a world of cutthroat cost-cutters.
why are you tipping 15% for mediocre service? that just ups expectations and sets the bar low for quality service. of course tipping is a choice but there are social pressures. i prefer to hover around 10% for normal service but you can be made to feel like an asshole around people who default to 15-25% for even poor service, even though i am consistent and will often increase the tip greatly based upon great service. it isn't just an individual decision.
I always tip 20% for anything better than terrible service. Because I won't be arsed with evaluating whether my server was "good" or "great" or "truly outstanding" or whatever. It's table service. I shouldn't have to think about it at all.
I would rather tip 20% than use mental bandwidth for that nonsense.
I tip 15% 2/3 of the time, 10% for the worst 1/6, and 20% for the best 1/6.
If you don't change what you tip in response to perceived service quality, there is less incentive to make an effort to provide good service. You're engaging in renegade behavior, just like anti-vaxxers relying on the herd immunity to protect themselves from their own decisions. As long as anybody has to play this stupid tipping game, everybody has to play it.
If you really don't want to worry about it, why don't you just refrain from tipping altogether? It's table service. The restaurant should be the one enforcing its quality standards, and not the customers, right?
That's the minimum I can tip without the spouse trying to sneak more money onto the table when I'm not looking. I'd rather pay 15% up front than 25% through the back door, out of the family's petty cash reserve.
Poor service earns 10%, but only if I intend to ever return to that restaurant. The worst tip I ever left was $0.02, and that number was chosen to distinguish it from someone who just doesn't tip.
I have never even seen service good enough to merit 25%.
I think it's perfectly fine to tip 10% for median service, so long as you tip more for good service and less for bad. Giving "everything is awesome" tips to everyone, all the time, is the tipping equivalent of "everyone gets a trophy" competitive sports. You're not really helping the people you're giving them to, because you're eliminating critical feedback signals.
> Giving "everything is awesome" tips to everyone, all the time, is the tipping equivalent of "everyone gets a trophy" competitive sports. You're not really helping the people you're giving them to, because you're eliminating critical feedback signals.
San Fransisco is the most shocking city I've visited, in the world, in terms of wealth inequality. It felt a few small steps from being a distopia. Homeless people and drug addicts staggering around and shitting in the street a few hundred meters from high end boutiques with armed guards that 99% of the population could never afford to buy anything from.
That's fair. The Bay is terrible, I've experienced it firsthand for four years. My point, however, is that high costs of living and poor wages exist regardless of people's "empathy" and awareness of "wealth inequality".
I live in a suburban oasis in North Orange County, with plenty of "empathy" and awareness for wealth "inequality".
Yet, at the most recent city council meeting, there were a large number of residents complaining about the personal cost of opening up supportive housing for homeless people. Not a financial cost, but a personally subjective "cost" of sharing their city with transients. This housing complex includes mental health services and employment services on-site and has support from the local city government. Instead of compromising and considering alternatives, these people advocated for removing the program entirely and passing the buck to the next city.
High costs of living exist regardless of "empathy" or awareness of "inequality". The problem is policy, not personality.
Reminds me of here in Bristol. The amount of people I know in caravans and tents in cities here in the UK is fucking depressing. Nearly all of them have jobs.
I cycle past a large and growing encampent of shanty buildings, tent and caravans out the back of Bristol Temple Meads train station every day. Is right on the canal, across the water from a large nightclub and next to a yacht.
Imagine a dark twist, where the people who are walking by the tents in that picture, actually live in those tents! The smiling guy with the phone just got out of his tent and is heading to his workplace at a tech startup.
There are vast differences between rich and poor areas in most US metros. Usually they are separated by some freeway driving. San Francisco is rare in that the middle class and higher spend enough time in/near the center to notice its conditions.
> It felt a few small steps from being a dystopia.
Is it really? The only difference between San Francisco of today and SF a la "Bridge Trilogy" (William Gibson) is that the have-nots haven't completely taken over the bridge yet.
Most cities have these extremes. What's unique about SF is their geographic proximity. One could debate whether it's better to keep the inequalities out-of-sight and out-of-mind or not.
progressives would have an easier time convincing conservatives to support their policies if the most liberal places in the country weren't complete hell holes with the worst income inequality
be the change you wish to see in the world and all that
California, New Jersey, and Illinois all in bottom 5 for quality of life, New York at 37.
Most liberal places are hell holes ? I mean Marin County is 80% Democrats is one of the best places to live in the world. In fact the entire coast of US from San Diego all the way to Washington is all blue. What about huge cities like LA and NYC ? Are they hell holes too ? I don't really need to point out what areas of the US are true dystopian, with no jobs, declining life spans, opiod epidemics, and so forth.
Also, urban areas will have blight. That is true for any country in the world. But what makes the US unique is the historical context of slavery, reconstruction, segregation, white flight, incarceration etc. It's like 400 years of history and baggage.
You can also easily go to a very brown area and see the same thing. I mean Cupertino, Sunnyvale, Fremont, Dublin, San Ramon are heavily Indian cities, if not outright majority, and heavily blue. They are also awesome places to live.
The reasons for this are because they are the only places offering adequate services for low income families so people migrate to these areas. They become overburdened because most cities are not pulling their own weight. It sucks but it's better than being elsewhere for them. This only works with a collaborative effort from all over the US, not just a handful of progressive cities doing all the work while people stand in the sidelines criticizing it for not working.
This seems to be very dependent on which factors one values; that ranking only has three non-nature related factors, which seems frankly insufficient.
One could similarly point to the suicide rate and write the same sentence with liberal/conservative switched (California, New York, etc are all at the bottom of the age-adjusted suicide rates in US states).
These rankings are suspect. Mississippi is #6 in quality of life, yet they are near dead last in almost everything else (health care #50, education #46, economy #48, opportunity #49, infrastructure #49). How can someone have a high quality of life if they are poor, uneducated, and unhealthy?
The answer seems to be that US News defines quality of life in an extremely narrow manner. The measurement seems to place a high emphasis on community engagement (likely tied to religiosity) and natural environment (which seems to favor areas without large cities).
I don’t know, some Asian cities (e.g. Jakarta) seem worse. At least in SF middle class people walk on the streets and don’t live behind electric fences either.
I travelled around south East Asia, and in Cambodia for example, it was more that most people seemed poor but were scraping by with some kind of job. And not surrounded by extravagant high end shops, or rich people with everything. People lived on the street sometimes, but they had a little makeshift shelter with amenities, beds etc, and turned the shelter into a market stall in the daytime. So even they had something, even if very little.
That's not really "shocking wealth inequality", but more like a
shocking display of wealth inequality.
Most cities around the developed world will spend more effort to herd the "undesirables" into some corners far away from fancy shopping districts. We can debate the pros and cons (after all, nobody benefits from having to avoid human feces on sidewalk), but I don't think SF has much more actual inequality than most other cities.
I never saw anything even close in European cities I've lived in and visited. There's definitely more homeless in American cities, but the West coast is by far the worst I've seen and San Fran was considerably worse than other places.
Rent, other than the amenities of the dwelling itself, affords access to a location, which is likely far more valuable in the minds of those making the decision than dining out.
In addition to the issues with high cost of living that affect other big cities like New York and DC, the restaurant market in the wider Bay is somewhat distorted due to so many firms of high earners offering food on site. This shifts sit-down restaurants further towards the discretionary, incidental end of spending and away from daily needs.
Lunch hours typically have a lower proportion of high-income customers than dinner hours, but this decreases their share further. A common solution is to raise dinner prices to be a higher multiplier above lunch prices, but that only makes sense if the pricing won't drive away business to competitors. For most of these restaurants, attrition and consolidation will continue to happen, while a few will try to move further and further upmarket and focus on branding and an intangible experience, to remove themselves from pricing pressure.
So while housing supply versus demand is what people focus on, the social problem here (people feel like you can only live in SF if you work in tech, and high-paying tech at that) is coming from a weird sort of income inequality.
You have both extreme income differences -- an engineer might literally be making 10x what a waiter does -- and also an absurd number of people on the high end. You don't have one or two or a few hundred or a couple thousand people earning an order of magnitude more than the median, you might have a hundred thousand people with incomes an order of magnitude larger than the people below the median.
So my question is: is there any research on what we want income distributions to look like? Would these problems be occurring if engineers made 2x, 5x or 1.25x what waiters did? Would they be happening if the number of engineers was less than 5%, 10% or 2% of the city's housing stock?
How would the current parameters have to be tweaked before people who weren't earning the top incomes didn't feel like they were being left completely behind?
So while housing supply versus demand is what people focus on, the social problem here (people feel like you can only live in SF if you work in tech, and high-paying tech at that) is coming from a weird sort of income inequality.
Can you demonstrate that? San Francisco is more distinct from other municipalities for its poor housing policy, than for the presence and density of highly paid professionals.
The rest of your comment flows from this idea, that the presence of certain kind of people and what they make for a living is something under the control of policy makers. This seems like a strange idea in a country with unrestricted freedom of movement and a basically free market economy.
It is striking that you are willing to operate with the idea that policy makers could have that kind of power, while not approaching the problem from areas where they so clearly do have power: public transit and housing policy.
While I'm generally interested in problem-solving, in this case I'm interested in problem-understanding. Yes, the housing policies are notoriously stupid, but there are parameters underwhich they are inconsequential. What are they?
And while San Francisco has put its own delightful spin on it, gentrification is by no means unique to the Bay Area. Neighborhoods shift over time inevitably but sometimes these shifts are sudden and many former and soon to be former residents feel pushed out and left out. What are the parameters for a neighborhood population to turn over without anyone noticing or caring?
Yes, the housing policies are notoriously stupid, but there are parameters under which they are inconsequential. What are they?
If there had been no change in demand it all, San Francisco housing policies would not have been a problem. That was not a robust assumption given internal freedom of movement within the United States.
And while San Francisco has put its own delightful spin on it, gentrification is by no means unique to the Bay Area. Neighborhoods shift over time inevitably but sometimes these shifts are sudden and many former and soon to be former residents feel pushed out and left out. What are the parameters for a neighborhood population to turn over without anyone noticing or caring?
Maybe it depends somewhat on the nature of the new residents. If they are moving for a new job, new building can blunt the impact. People will take the new housing that is within a credible commute distance of work. If, however, the new residents are deliberately seeking to enter and bid up historic or trendy areas, some kind of defense is necessary as well. In Berlin's case, there was legislation to prevent too much improvement of apartments -- putting in new kitchens and so forth -- in certain areas, to prevent the rent from rising.
San Francisco has new residents of both types; and suffers from many other forces. It is small and on a peninsula, so there is only one dimension for growth (Berlin, DC and similar areas can grow square-wise). Its housing policies prevent new building. Public transit is not that great; getting to work from the western half of the city takes almost as long as coming from Oakland. Thousands upon thousands of people moved here to take jobs in the area. Many of them targeted small neighborhoods like The Mission and Noe Valley and Potrero Hill.
The latter behavior is particularly remarkable in SF because these neighborhoods were typically far from their jobs. Company shuttles undoubtedly contributed to this problem. It was like public transit operating in reverse: centralizing the residences and dispersing the commercial centers.
It's not just waiters that can't afford the city. San Francisco could literally price itself out of existence. My previous partner was looking at residency programs. Being a doctor in training is not an attractive proposition in San Francisco, and I believe she is happy that she did not match there.
There's a huge fraction of the workforce that cannot afford San Francisco. It has nothing to do with tech. It's the lack of new housing and apartments being constructed that's driving the problem and making everything more expensive there. I don't even want to visit San Francisco again
> San Francisco could literally price itself out of existence
No, it can't.
It's only expensive as long as there are people willing and able to pay the cost.
> There's a huge fraction of the workforce that cannot afford San Francisco
Yes, and that's why commuting is a thing.
> It has nothing to do with tech.
It has everything to do with tech.
> It's the lack of new housing and apartments being constructed that's driving the problem
No, it's that plus the money (largely from tech) chasing what units are available. Supply constraints alone can't control prices. If there's no demand, price is going to be zero (or undefined) however limited supply is, because no one will be buying. San Francisco has high demand (that is, lots of people willing and able to pay much higher than prices than the market price in many other areas) and constrained supply.
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[ 1.9 ms ] story [ 189 ms ] thread"Analysts are also calling a lack of employees one of the biggest problems in the restaurant industry today." (My note: No lack of employees, just lack of employees willing to work for current pay offered.)
EDIT: "The demand for highly skilled help is especially acute in Washington, where a boom in restaurants run by creative chefs is outstripping the region's labor force," The Times wrote.
https://www.vox.com/2018/12/12/18136392/dc-initiative-77-rep...
"A judge just blocked another effort to raise wages for restaurant workers in DC"
There is no employee shortage, ever. Just a shortage of businesses owners who are willing to pay market rate for labor.
Does the city really need another stadium? Or would more housing have been better?
A tip should be an additional non-expected gesture.
But actually to your other point. If I'm interested in working as a waiter at some restaurant, but I'm uncomfortable with tips being an expected part of my wage, then why would I either pursue that job, or accept it under those guidelines? Couldn't I work somewhere else instead and get the same amount of money?
So you pay 15% on 2/3 of your meals, 10% on 1/6, and 20% on 1/6. But the mean is also 15%.
Giving 20% to everybody is Lake Wobegon syndrome, where all the servers are above average. If you don't adjust your tip based on the quality of service, you remove the incentive to strive for above-average service. You end up with servers that sit down at your table when taking your order and chitchat with you, instead of just doing their job professionally while you can see or hear them, and bitching about it in private later.
I've seen some other places with a different kind of tablet that simply has boxes for different dollar amounts of no tip, but they are typically not places that even have servers. Why would I tip at a retail shop when all I did was grab something off a shelf and bring it to the counter?
20 years ago, it was definitely 15% minimum, but somewhere between 15% and 20% was very common (mandatory large party tip was usually 18%).
Regardless, you are correct that the expected percentage has gone up over time, and that a non-tipper or low-tipper is hurting the wait staff when they don’t leave a standard tip.
The most likely outcome of this is that prices go up to factor in a 20% “tip”, the owners/managers keep part of it and pay the workers only slightly more. The formerly tipped position will end up making less.
Another possible (non-cynical) outcome is that the 20% is spread out to both front and back of the house staff. Again, wait staff make less.
If the wait staff stand to make less, they will never stand for changing the system. That’s why I doubt that it will ever change in the US.
Is the system reasonable and/or fair? Good question. Whatever the answer, it’s the system we’ve got, and the inertia is real.
All businesses face the challenge of continuously preserving a balance that (a) allows them to make money and (b) allows them to exist at all.
Are maximum wages (set by law) a thing in the US? I only knew about the minimum wage concept.
The OP is basically correct that restaurant owners don't want to raise pay rates to a level that meets a "living wage" standard. They don't want to raise what they charge customers to the point where they could pay those rates, of course--but I'm not sure there's particularly good data to support the assumption that their customers would balk at doing so. These are restaurants with wait staff in high-cost cities, and raising the average ticket price per diner by $2 or $3 may not be enough to dissuade very many diners from choosing that restaurant. (I mean, I'm sure there's somebody out there who'd look at a menu and say, "I'd pay $28 for that flat iron steak, but $30? No deal!", but it seems like it'd be uncommon.)
Is the situation the same for housing? Is there never a housing shortage, just a shortage of people who are willing to pay market rate for housing?
If not, what are your thoughts on what the difference is?
Individuals on the other hand can’t generally just will more money into existence to cover higher housing costs.
Interesting that 'individuals can always ask for a raise to cover higher costs; if they can't, they're not viable in the first place' might be true, but it sure sounds heartless.
"If no one will hire you at salary large enough to meet your expenses in $City then you can't afford to live in $City."
My skills aren't valuable enough for me to live in say, Manhatten, but I don't think that's outrageous or anything.
There is not an equivalent quota or limit on the number of employees who can work as waiters.
What business owners are willing to pay IS the market rate.
No, a market needs two sides and equilibrium, no different to a business owner having a hard time reselling Apple computers at say 30% over retail.
It's not a unilateral decree, fiat. If people are available and not willing to work for you for what you offer, it is inherently NOT the market rate.
You can have a demand at a price there is no supply for.
What a dishonest article. It's not an effort to raise wages - it's an effort to raise minimum wage. You may have different opinions about how it will affect actual wages, whether it will actually increase them or not - because being put out of a job is a 0$ wage.
But either way, even if you think that raising minimum wage WILL result in higher wages, you still have to admit that these things are still different and require some arguments to link them together. Silently misplacing one for the other, as if this assumption is so self-evident, is nothing but propaganda.
It is not a viable policy to legislate raised wages, and then legislate even higher wages when the cost of living increases in turn. The money actually has to come from somewhere. Businesses will raise prices to the point the market will bear, for both the lower and upper class. This is the fundamental issue with wage hikes. $15 is not more than $10 if everything costs 1.5x more after wage increases. Deregulated markets are able to (and have in the US up to this point) create more material wealth for everyone even as wages stay stagnant in dollar value.
The problem is not greedy businesses. They want workers who they can hire for wages they can afford. Due to inflated housing prices, the cost of living is too high for workers to live in the city, and thus the "living wage" is unaffordable for businesses. Why are the housing costs so high? There's a lot of evidence that zoning laws and regulated markets play a large role[0].
[0] https://www.forbes.com/sites/scottbeyer/2016/09/30/the-verdi...
The only reason for restaurants to have paper thin margins is if there are too many of them. That will probably change once their waiting staff disappears.
And honestly, if people can afford to pay sky high San Francisco prices for everything else, they can also afford to pay them in restaurants.
Don't be afraid to charge what you're worth and what your customers can afford.
(My clients are mostly banks. I know they can afford me.)
Raising wages will never fix the problem. SF needs to build up or change laws to deincentivize people from living there (e.g. higher taxes on high-income tech workers). The latter has other issues associated with it, but would at least encourage the decentralization of tech talent to other parts of the country.
That's not the end game, because there is an endless supply of low paid labour willing to commute hours to work. Especially if the tips are better.
The places will be expensive, no doubt, but labour will capture a very small proportion of the hike, with the rest going to capital like brand and real estate owners.
The tech elite seems willing to cling to these sorts of market-mediated fair world falacies, because they refuse to acknowledge their own position in the capitalist society.
Then we can just detach SF from California, and let it float out to sea.
Yes, sure, all they have to do is secede from California so that they are no longer subject to California’s Constitutional limits on property taxes and they can get right on that.
I was always surprised that the waiting staff would actually stand with me and engage in conversation while I queued up to be seated. Travelling from the U.K. I had never experienced this level of "niceness ?"
Later I was educated that they are basically only earning anything meaningful from the tips. The wages were puny and they were increasing their chances of getting relevant tips by being so nice.
Things have gotten worse I believe.
* yes, yes, some people will contest classification of Brits as Europeans
I only got to suffer the featureless sprawl during the commute. Whereas I loved the cubicle I got to camp in while I was in that office.
Here in the U.K. I have to suffer open plan offices and in the winter months, the beautiful architecture is as good as not there at all.
[0]: https://en.wikipedia.org/wiki/Tipped_wage
Do others?
TBH, some restaurants can benefit more from this than others. Portillo's strikes me as one that could greatly benefit from more judicious use of automation. By my count, every order is taken at least two times, and recorded at least three times.
This has no doubt contributed to my orders being at least 20% wrong every single time I have eaten there. I have no idea how they can stay in business.
The payment system has one version of the order. The kitchen system has another version of the order. The bag has yet another shorthand version. Each version is worked by a different employee, but no one ever cross-checks. Madness.
If you're a strict libertarian, I suppose you could argue they should bootstrap themselves a little harder. But, I'd prefer we make life as easy as possible for as many people as possible.
After all, the only reason real estate prices in SF and the surrounding area is so out-of-control is overly strict zoning. Allow more multi-family dwellings, preferably close to places of work, and it's a net positive for society.
if a huge amount of restaurants close, there will be a sudden increase in demand for tables at the ones that remain. the remaining restaurants can then increase their prices a lot and afford to hire servers. if that doesn't happen and all the restaurants actually leave, it implies that the residents didn't value dining out very highly in the first place.
https://news.ycombinator.com/newsguidelines.html
Unfortunately, subsidized housing and welfare enable businesses to pay less than a living wage. People that are in poverty are kept in poverty, and the businesses have a captive labor force.
It's almost like there's a specific cause and effect.
All in all, for a city that has an annual budget of 11 billion dollars, the city is a mess, and times of plenty beget times of crisis. At some point even people with RC will leave the city, and the downturn will not be negotiable.
Democracy at it's finest. I expect the rent and real estate to keep rising perpetually, that's what the voters seem to be demanding, even if indirectly.
But the music stops: at some point the bargaing of a tech-job will not be enogh to keep people in.
With the right political administration in power at the right time, they might even be able to wrangle a bailout from the rest of the country! The midwest successfully did it vis-a-vis UAW and GM (sure, the fatcats got a taste, but the real money was in preserve the taxbase of those towns and saving the workers' pension).
With a tax expenditure of 2,600U$S per household by the city management, i wouldn't expect any basic income ever.
If "the tip rate is going up", that is entirely a problem of your own making. You chose to tip more. You can also choose to tip less, or not at all (by going to restaurants with counter service).
If you as a worker wish to represent 20% of the cost of my meal off the top, in addition to whatever portion you also may get from the menu list price, you are a growing cost, one that invites cutting. There are vending machines that make entire fresh, oven-baked pizzas now. The robot does not get a tip. The service worker just cleans the thing according to a schedule, and refills the ingredient hoppers. Even McDonald's is installing robotic cashiers.
It's easy to find tipping guides written by current or former service workers that self-servingly inflate percentages over the historic tipping rates. But those writing such guides are basically advertising that they are becoming less productive workers. That seems like a dangerous thing to do in a world of cutthroat cost-cutters.
I would rather tip 20% than use mental bandwidth for that nonsense.
If you don't change what you tip in response to perceived service quality, there is less incentive to make an effort to provide good service. You're engaging in renegade behavior, just like anti-vaxxers relying on the herd immunity to protect themselves from their own decisions. As long as anybody has to play this stupid tipping game, everybody has to play it.
If you really don't want to worry about it, why don't you just refrain from tipping altogether? It's table service. The restaurant should be the one enforcing its quality standards, and not the customers, right?
Poor service earns 10%, but only if I intend to ever return to that restaurant. The worst tip I ever left was $0.02, and that number was chosen to distinguish it from someone who just doesn't tip.
I have never even seen service good enough to merit 25%.
I think it's perfectly fine to tip 10% for median service, so long as you tip more for good service and less for bad. Giving "everything is awesome" tips to everyone, all the time, is the tipping equivalent of "everyone gets a trophy" competitive sports. You're not really helping the people you're giving them to, because you're eliminating critical feedback signals.
that was my point.
Yet, at the most recent city council meeting, there were a large number of residents complaining about the personal cost of opening up supportive housing for homeless people. Not a financial cost, but a personally subjective "cost" of sharing their city with transients. This housing complex includes mental health services and employment services on-site and has support from the local city government. Instead of compromising and considering alternatives, these people advocated for removing the program entirely and passing the buck to the next city.
High costs of living exist regardless of "empathy" or awareness of "inequality". The problem is policy, not personality.
https://goo.gl/images/21xra9
Is it really? The only difference between San Francisco of today and SF a la "Bridge Trilogy" (William Gibson) is that the have-nots haven't completely taken over the bridge yet.
be the change you wish to see in the world and all that
California, New Jersey, and Illinois all in bottom 5 for quality of life, New York at 37.
https://www.usnews.com/news/best-states/rankings/quality-of-...
Also, urban areas will have blight. That is true for any country in the world. But what makes the US unique is the historical context of slavery, reconstruction, segregation, white flight, incarceration etc. It's like 400 years of history and baggage.
sure, if you're white and well educated. The brown serf laborers have all been nicely segregated away so you don't have to see the misery
https://sanfrancisco.cbslocal.com/2016/03/17/marin-county-ra...
One could similarly point to the suicide rate and write the same sentence with liberal/conservative switched (California, New York, etc are all at the bottom of the age-adjusted suicide rates in US states).
The answer seems to be that US News defines quality of life in an extremely narrow manner. The measurement seems to place a high emphasis on community engagement (likely tied to religiosity) and natural environment (which seems to favor areas without large cities).
She thinks its the cutest city ever
I told her we avoided the other parts but we dont need to go there
SF is unique in that the tourist and commerce center attracts and tolerates the open air drug bazaar and the poor sanitary conditions of its patrons.
Most cities around the developed world will spend more effort to herd the "undesirables" into some corners far away from fancy shopping districts. We can debate the pros and cons (after all, nobody benefits from having to avoid human feces on sidewalk), but I don't think SF has much more actual inequality than most other cities.
In addition to the issues with high cost of living that affect other big cities like New York and DC, the restaurant market in the wider Bay is somewhat distorted due to so many firms of high earners offering food on site. This shifts sit-down restaurants further towards the discretionary, incidental end of spending and away from daily needs.
Lunch hours typically have a lower proportion of high-income customers than dinner hours, but this decreases their share further. A common solution is to raise dinner prices to be a higher multiplier above lunch prices, but that only makes sense if the pricing won't drive away business to competitors. For most of these restaurants, attrition and consolidation will continue to happen, while a few will try to move further and further upmarket and focus on branding and an intangible experience, to remove themselves from pricing pressure.
You have both extreme income differences -- an engineer might literally be making 10x what a waiter does -- and also an absurd number of people on the high end. You don't have one or two or a few hundred or a couple thousand people earning an order of magnitude more than the median, you might have a hundred thousand people with incomes an order of magnitude larger than the people below the median.
So my question is: is there any research on what we want income distributions to look like? Would these problems be occurring if engineers made 2x, 5x or 1.25x what waiters did? Would they be happening if the number of engineers was less than 5%, 10% or 2% of the city's housing stock?
How would the current parameters have to be tweaked before people who weren't earning the top incomes didn't feel like they were being left completely behind?
Can you demonstrate that? San Francisco is more distinct from other municipalities for its poor housing policy, than for the presence and density of highly paid professionals.
The rest of your comment flows from this idea, that the presence of certain kind of people and what they make for a living is something under the control of policy makers. This seems like a strange idea in a country with unrestricted freedom of movement and a basically free market economy.
It is striking that you are willing to operate with the idea that policy makers could have that kind of power, while not approaching the problem from areas where they so clearly do have power: public transit and housing policy.
And while San Francisco has put its own delightful spin on it, gentrification is by no means unique to the Bay Area. Neighborhoods shift over time inevitably but sometimes these shifts are sudden and many former and soon to be former residents feel pushed out and left out. What are the parameters for a neighborhood population to turn over without anyone noticing or caring?
If there had been no change in demand it all, San Francisco housing policies would not have been a problem. That was not a robust assumption given internal freedom of movement within the United States.
And while San Francisco has put its own delightful spin on it, gentrification is by no means unique to the Bay Area. Neighborhoods shift over time inevitably but sometimes these shifts are sudden and many former and soon to be former residents feel pushed out and left out. What are the parameters for a neighborhood population to turn over without anyone noticing or caring?
Maybe it depends somewhat on the nature of the new residents. If they are moving for a new job, new building can blunt the impact. People will take the new housing that is within a credible commute distance of work. If, however, the new residents are deliberately seeking to enter and bid up historic or trendy areas, some kind of defense is necessary as well. In Berlin's case, there was legislation to prevent too much improvement of apartments -- putting in new kitchens and so forth -- in certain areas, to prevent the rent from rising.
San Francisco has new residents of both types; and suffers from many other forces. It is small and on a peninsula, so there is only one dimension for growth (Berlin, DC and similar areas can grow square-wise). Its housing policies prevent new building. Public transit is not that great; getting to work from the western half of the city takes almost as long as coming from Oakland. Thousands upon thousands of people moved here to take jobs in the area. Many of them targeted small neighborhoods like The Mission and Noe Valley and Potrero Hill.
The latter behavior is particularly remarkable in SF because these neighborhoods were typically far from their jobs. Company shuttles undoubtedly contributed to this problem. It was like public transit operating in reverse: centralizing the residences and dispersing the commercial centers.
There's a huge fraction of the workforce that cannot afford San Francisco. It has nothing to do with tech. It's the lack of new housing and apartments being constructed that's driving the problem and making everything more expensive there. I don't even want to visit San Francisco again
No, it can't.
It's only expensive as long as there are people willing and able to pay the cost.
> There's a huge fraction of the workforce that cannot afford San Francisco
Yes, and that's why commuting is a thing.
> It has nothing to do with tech.
It has everything to do with tech.
> It's the lack of new housing and apartments being constructed that's driving the problem
No, it's that plus the money (largely from tech) chasing what units are available. Supply constraints alone can't control prices. If there's no demand, price is going to be zero (or undefined) however limited supply is, because no one will be buying. San Francisco has high demand (that is, lots of people willing and able to pay much higher than prices than the market price in many other areas) and constrained supply.
https://www.bizjournals.com/sanfrancisco/news/2017/02/16/hou...
Increasing salaries isn’t going to create more housing, it will just drive up prices even more.