Honestly, I think this is good for Tahoe in the long run. The NIMBYs who constantly block development are getting a taste of their own medicine. When they’re finally fed up with the low staff and poor service they’ll see the need for affordable housing.
I don’t understand the “pay people more” sentiment. It _seems_ like the correct and obvious solution, but it seems like it just moves the goal line.
Margins are razor thin in restaurants specifically. If you pay people more, you’ll need to raise your prices and that will offset the pay raise if it happens across the board.
I suppose for a restaurant specifically, the people who work there and who eat there are very different. If higher wages leads to higher unit price, its not the worker paying that difference, its the wealthier customers.
Of course in the general case, the places the workers do shop at, probably supermarkets, will notice that people have more money to spend and will likely try to capture that extra money for themselves - either because demand of certain items increases or just plain greed.
So continues the endless, exhausting and unwinnable battle between wages and inflation
What if it becomes widespread? And every restaurant raises wages to attract workers while also raising prices? In other words, we need some people to be paid very little to produce the cheap food for these hire paid food service workers. Where is the bottom?
Something seems to be fundamentally wrong with an economy where we think that we need people to work in jobs that are paid so little that these people can't make a living. and it's viewed as a problem to raise their incomes.
This while at the same time some people are becoming very rich and the country considers itself very wealthy.
To be clear, I don't know that anyone thinks that we need people to work in jobs where they are paid so little that they can't make a living. I think those jobs work very well for students and folks who need part time income.
What I am debating is whether raising rages simply causes inflation that then negates the effect of the wage. That's not a problem with an economy per-say, but rather just how an economy works. But perhaps I'm missing something.
All of that said, I share the concern about wealth inequality. A country will eventually collapse if the people at the bottom feel like the game is rigged and they will never get ahead.
“What I am debating is whether raising rages simply causes inflation that then negates the effect of the wage.”
You could argue that exactly this has happened when upper incomes were raised disproportionately in the last few decades. All the major expenses/investments of that class like housing, health care, education, stocks and others shot up. Seems there is more money around than they can use productively so they just kept bidding up prices.
> Something seems to be fundamentally wrong with an economy where we think that we need people to work in jobs that are paid so little that these people can't make a living. and it's viewed as a problem to raise their incomes.
The problem here is equating wages and income.
It is to everyone’s benefit if jobs with a net positive value get done, even if the value isn't enough to support the worker at an adequate lifestyle without supplementation.
Everyone should also have income to support an adequate lifestyle, but there's no reason that needs to come from wages — that's what a social welfare system, whether classical or UBI-based — ought to guarantee.
Say we decide $1,000/month is the minimum support level. It is generally better that a job that the market would pay $500/month gets done, the profits of owners and wages of higher level employees resulting from that job being done get paid and taxed, and the worker gets at least $500 in social support than that the job goes undone, the taxes on the other income streams dependent on it go unpaid, and the worker collects $1,000 in social support. And its even worse for the worker in the latter case if the minimum income we demand to allow work is higher than the social support we provide the able bodied without work (which is generally the case in the US, especially unless you have dependent children, outside of short-term unemployment of those who previously had sufficient income for UI to provide an adequate temporary support.)
> If higher wages leads to higher unit price, its not the worker paying that difference, its the wealthier customers.
But those wealthier customers probably provide high-end labor inputs to goods and services the redtaurant worker consumes, so driving up their expenses increases their salary demands which drives up the costs of the goods and services their labor contributes to, thus driving up the restaurant worker’s cost of living.
Obviously this will be very attenuated, but it is a real effect.
When I watched the movie Elysium, I always wondered where the restaurant workers, hotel housekeepers, and other service workers on the station lived. Maybe it was all automated. If the rich want to have these rich-only enclaves, they're gonna need to learn how to be a little more self sufficient.
This is becoming a problem in many areas, and I can't imagine that the push for remote work is going to help the situation any.
Unless you are living with parents, or with multiple roommates, the housing market in these cities will price you out.
We have this same scenario taking place in the area I live, and NIMBY/zoning laws prevent affordable housing from being developed. I've been to town hall meetings where people decry "affordable housing" as bringing Section 8 and "undesirables" to the area. You mention that even the local school teachers have to commute in from over an hour away due to afford a place to live, but it falls on deaf ears.
If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc.
> NIMBY/zoning laws prevent affordable housing from being developed
Jackson Hole reserves some housing for those who work full time for an employer in Teton County [1]. This strikes me as a reasonable balance between wanting to control housing stock and maintaining access to cheap labour.
> sham job in the sense of "legit job offer you don't plan to keep for a while just to qualify"
Fair enough. I don’t know the text of the law.
Also, the entire county has a population just over 20,000; the city of Jackson, less than half that. This would cause problems for the employer who let it happen as well as the new resident.
It "causes problems" when you "let" an employee quit a job too soon?
Edit: I know HN hates tedious back-and-forths, so let me just jump to the substantive point: any time you have a situation where you have special carve-outs for an essential good, you're not really solving the problem, you're just encouraging people to game it. See the past thread about enrolling in college part time to get health insurance.
> It "causes problems" when you "let" an employee quit a job too soon?
The law isn’t code; mental state matters. If you got a job to buy a subsidised house with a plan to quit, in a small town, that will cause you problems. If you provided that sham job, it will cause you problems.
Maybe they hired a great lawyer and never sent any text messages about their brilliant plan to defraud their neighbours. But most probably they didn’t, and that fact pattern would certainly be enough to warrant scrutiny.
Not entirely different. Any non-dollar payment takes they employee's purchasing power out of the free market. Tying one's housing options to one's employment opens the door to similar abuses as company stores. Does a fired employee loose thier housing?
> Any non-dollar payment takes they employee's purchasing power out of the free market
Where is the non-dollar payment?
The law says landlords must rent certain units to people who work locally. The company is never involved except in verifying employment. If the employee wants, they can commute through the pass to Victor, Idaho and earn exactly what they were earning before.
The payment is the cheaper housing options due to employeers needing to fill units with local workers. The evil is that, once so housed, the employee is no longer free to take non-local work. Are these people free to quit and start a remote-work job?
> Are these people free to quit and start a remote-work job?
Got it. I see what you mean. No, they are not. Practically speaking, these jobs are not ones that can be done remotely. (But maybe another could.) More practically, absent these measures, those workers are commuting in.
In California we have a notoriously evil company called Derrel's Mini Storage. They have some of the highest employee churn, such that they have permanent now hiring signs at all locations - which are explodingat the moment due to the many people moving out of California - almost all are completely full and we have I believe more than 10 just here.
They hire teams of two and force the men to do the manual labor and the women to do the deskwork.
They force the team to work and live on site. As in, to work there yoy must reside there. They make this sound like a bonus - it's not.
Now, when you inevitably decide to leave you must first find alternative living situation, and another job to pay for it while working extremely long hours at this place (sometimes 7 days a week open to close if they cant hire a relief team- and they only hire teams).
This is beyond evil.
When I was about 19 I worked on a rock quarry in Comstock, Texas. We had to live on-site at the 'wetback shack' (owner's words, and most of the employees were indeed illegals driven over from Acuna, Mexico). This was because he wanted to start work at 4am and this ensured everyone would show up- not his only reason however.
We made minimum wage busting and palletizing rock, even if we operated heavy machinery wage didnt change. They charged us $3 per soda or water at the swear to God it literally was Company Store. We also, we found out when we got our 1st check, were charged rent to stay in the shack. I think at what 3.30/hr (one water per hour!) damn near nothing was left. We, my friends and I who had family in Del Rio, Tx, could leave, and we did. The poor bastards who worked harder than anyone and were generally shit on (the illegals) they couldn't leave. The people who were from Comstock outskirts where there were no other jobs or places to rent? They stayed.
This was in 1999.
Tying living in any way with work is disgusting and not in any way shape or form altruistic.
Directly from the article, some business owners are doing better than others because they house [some to a majority of] their workforce.
Sure, you're missing the company owning the church, but fewer Americans are religious now. The employer also doesn't own all the local stores, but "It's not a company town because the stores are owned by people that all know each other (due to it being a small town), instead of one individual" is a little too close to be comfortable to me.
And then you are stuck at the will of that one company. My first roommate in a mountain town was not like by his manager, got fired and kicked out of company housing. Many people will take shelter in their cars in the national forrest for the summer. These mountain town workforces are essentially homeless, (well in many ways by choice) but these towns keep leveraging US public property for supplying land for camping, keeping wages lower than the housing and utility prices demand. Furthermore, how fun can a town full of transient vacationers really be if all the youths cant manage to go out or have a place to party.
You sound like a big city person (i used to be one - 5 years ago before moving here). I live in Truckee. town of 16,000 people.
> If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc
I love your definition of "essential services" are bartenders and wait staff. You sound like a real great person to be planning for critical events, such as wildfires which occur in our area.
Also "If the local residents are wealthy enough to live in the area" - lol, do you realize in our Town of 16,000 people, there are more than 50% of our houses that are NOT locals. On a busy weekend we expand to about 55,000 people. The problem is not the full time locals, but the temporary residents who exacerbate this problem. Their houses remain off the market for local residents to rent because they want to (rightfully so) njoy their second home for a few weeks a year - which precludes a long-term leaser. It doesn't matter how much wages rise, locally - there are CFO's of local businesses who have had to move because they cannot find housing.
Yes, we live in a national forest, so simply building more housing is slowed down by natural beauty and environmental assessments, and the usual NIMBYism too. But the town is quite aligned behind trying to solve this problem somehow.
If it's the vacationers causing problems, isn't it quite easy to enact local laws to deal with those problems? Those vacationers aren't there to oppose the solutions.
You sound exactly like the people who moved up to Lake Arrowhead and ruined it, I ended up leaving when I got told by a flatlander to leave “their” mountain, where they’d lived for a lot shorter time than I had. I realized then it was losing its appeal and wouldn’t be a place I’d continue to enjoy with those sorts increasingly moving up there. For a resort area the people who work the service jobs are essential. Those businesses are the backbone of the community most of the time. Without them it would lose the traits that make it desirable to live.
> For a resort area the people who work the service jobs are essential.
I am the OP the commenter was referring to. I wasn't going to bother responding to a nitpick on my use of the word "essential" but you summed up my meaning perfectly.
If all the bars, restaurants, cafes, dry cleaners, etc. go unstaffed (as they are right now), headlines start being made. We don't need to lump people into brush-fire fighters and bartenders in terms of who is essential.
To top it off I'm not a city person and I used to live in Truckee, CA, where this poster is living.
NIMBYS are the most short-sighted people ever. And somehow every boomer I know became a NIMBY in the last decade. At least in France they don’t listen to them, unlike in the Bay Area.
Can’t wait until this explodes and we can have sane housing policies again.
The 'problem' (for California) is that the fast growing companies will have already moved elsewhere. (Problem in quotes because it is an implied goal for NIMBYs)
Perhaps even to other countries with sane housing policy. So this should be something on the federal governments radar.
The fear-mongering is always about “first they’re coming for companies, then they’re coming for your home property tax!” and people believe it. With that said, I really hope they DO come for home property taxes, as right now it’s a big part of what encourages the wealthy and previous generations to stay put and never sell (or become landlords and move elsewhere) while pricing new homeowners out of the market, as now in addition to the mortgage on that seven-figure starter home they’re saddled with a few-grand-per-month tax bill.
I know this article is about Tahoe and paints a rather bleak picture...but this is nationwide. I traveled most of the east coast over the past few months, and every single city's service sectors are begging for employees. I've never seen so many fastfood places closed. And not like, boarded up, but appearing operational but having zero employees. And most weren't high cost of living areas...
I took a weekend trip to Ocean Shores Washington last weekend, and…the restaurants were all packed and wanting of long waits due to lack of servers and cooks. Resorts towns have been hit really hard, but this might also have to do with them laying off all of their staff at the start of the pandemic. Did they just expect these people to wait around?
Surely yes, they had to make a really hard decision, though I don’t think this consequence was foreseen even if it wouldn’t have changed the decision much.
There was a marked drop-off in fast-food having rolling staffing brown-outs once school ended. High school kids flocking to the $15-$18 per hour jobs at Dunkin Donuts and McDonalds and Dairy Queen that had been sitting unfilled for months.
Please be more nuanced in your replies when painting with a wide brush. Florida is absolutely exploding right now, and there's so much housing construction here that one can expect to wait for months for contractor availability. I've been in three of the five major FL cities in the past few months and while there are a lot of "help wanted" signs, businesses are open and busier than ever. What's hurting this region is supply chain delays and shortages, which we know are worldwide.
I'm unsure what you're asking of me...please clarify?
I've traveled in or through Asheville, Greenville, Savannah, Knoxville, Jacksonville, and noticed it. Savannah was probably the worst, and it is not a high cost area, at all.
I live in Florida. There's a burger king near me that is just...empty. Lights on, nobody there.
The 7/11 near me has one employee. He runs 3 registers to keep the line moving. I see him training people about once or twice a month, but they never seem to stick around.
I didn't ask a question. So your milage varies - not surprising. My experience differs vastly with yours. I've yet to see an understaffed establishment in the Tampa Bay area, nor the three metro areas in FL I've been in recently. Different experience, doesn't make it any less valid.
Florida resident here, and I don't ever remember seeing $500 signing bonuses for gas station employees before now.
Yes, restaurants are busy here, but the service and food quality is obviously suffering.
Look up housing prices in the Tampa bay area. The new construction is all "Luxury" (just a word, still crappy) so they can sell $1,500 one bedrooms to foreigners.
Not that anyone's surprised, but look to Florida for more collapses (ecosystems, economic, not just buildings) coming soon...
> Yes, restaurants are busy here, but the service and food quality is obviously suffering
Not in my experience.
> Look up housing prices in the Tampa bay area. The new construction is all "Luxury" (just a word, still crappy) so they can sell $1,500 one bedrooms to foreigners.
This just reads as incredibly bigoted. We're getting a decent amount of immigration influx but the majority of population rise is from out of state. Affordable housing is being developed and has been the last few years . New funding initiatives for affordable housing are in the works across the bay [1] [2], and there's a massive mixed income complex in planning for a major site across the river from downtown Tampa.
Demand is outpacing supply here. Plain and simple.
I love HN. Anecdotal evidence that goes against the accepted narrative will be downvoted to oblivion. Anecdotal evidence that supports the narrative is praised.
I mean... you're being rather confrontational for no reason IMO.
The topic is about staffing shortages in one city. I laid out my experience seeing this same thing elsewhere. And two different people tell you they see it in Florida.
Instead of adding your input, which is valid, you seem to contest everyone else.
That's my opinion. But I didn't downvote you, as I cannot.
I'm glad Tampa doesn't have the same issue most other cities in the US are seeing. You are lucky, it causes a lot of nagging issues.
reviewing your other comments on HN, you seem to skew towards assuming hostility or contention, rather than the opposite. I suggest you're viewing my comments through the same lens.
Exactly. Government has been backstopping/de-risking asset ownership since the Great Recession and massively increased that program in March 2020. At the same time, they started to de-risk the asset consumer class with eviction moratoriums and significantly increased unemployment benefits.
Seems to me one of those two classes will need to be inconvenienced if we don't want inflation to spiral out of control, because otherwise the asset owners will continue to buy more assets with cheap money that will push prices up, while asset consumers will continue to require higher and higher salaries to afford to pay the increasing rents to the asset owners.
Asset owners should be the ones taking the hit since they have been backstopped for far longer and are in a much better financial position to deal with it. But the asset owner class is also the one running the country and its tough to imagine them doing something against their short-term self interest.
Gonna be interesting to see what kind of equilibrium shakes out. I hope this plane can be landed without crashing...
“ Asset owners should be the ones taking the hit since they have been backstopped for far longer and are in a much better financial position to deal with it. But the asset owner class is also the one running the country and its tough to imagine them doing something against their short-term self interest.”
Very true. The Fed pretty much exclusively worries about asset owners and how to drive up asset prices even more. And most people in political or business leadership are asset owners.
I don’t think this will end well. Either we will become a society of super rich people that live separately from a large underclass or there will be a revolution at some point.
Some of the businesses interview in this article claim they start their employees at $20/he but that's not enough to pay rent and too much to qualify for government assistance.
To me that sounds like labour cost were subsidized by welfare in the past, and now needs to adjust for market realities. This causes shock to the market, but should eventually find an equilibrium.
Oh yes, I don't disagree at all, food stamps, section 8/public housing, medicaid (mostly medicaid expansion), WIC, etc can often take the form of corporate welfare.
Someone working full time should be able to pay life expenses without government assistance.
Anyone that isn’t currently a trucker should be staying far away from any driving jobs because they will likely be replaced in the next few decades with robots.
Not naive, you just didn't read the article fully?
It doesn't matter how much you're paying people - they can't find a place to live here. The CFO of company here has had to move to Arizona recently and works remotely now. I live in Truckee and this isn't just affecting temporary workers or low-paid workers. This isn't even the "well it's gonna be $3500 for a one bedroom like SF, so I'll pay up". people simply can't find places in a reasonable pricing band. Then, when they find it - the owners sell it next year and the search begins again.
Anybody without a house is in a vulnerable state in this economy IMO.
Is it possible a reason behind the lack of people is also that a ton of our essential workers (aka service people) have died during the pandemic? Seriously, line cooks was one of the most fatal job positions during this time…
Yes, the drifts of corpses in the less wealthy areas of town have been so vexing this last year. We'll probably have to import more servants, the lower classes aren't breeding fast enough anymore.
> Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit.
The second part is not true. As part of COVID stimulus, Congress instituted a temporary increase in the pre-existing child tax credit, and as part of making that stimulus timely made it so that a portion of the credit would be paid out monthly this year.
I do genuinely doubt that the “labor shortage” is directly caused by the fatalities, but:
1) It seems obvious that the high fatality rate among line cooks and other “essential workers” has driven them out of that line of work. If my colleague died for a line cook job, I’d strongly consider changing careers.
2) We’re running into the consequences of spending a year calling these people “essential workers” and “heroes” after decades of treating them like garbage. They’ve had a taste of dignity and recognition that they’ve been denied for a long time, good luck taking it back away.
3) In many ways this looks less like a labor shortage and more like a capital strike. Unless if you’re in an area where there has been significant migration, the workers do exist and are willing to work … but not at the rates that capital is demanding that they work.
Very unlikely. The death rate for someone under 65 is still pretty low (less than one percent last I checked). Even with an elevated infection rate it would be unlikely for that to make a big dent on the labor pool. Especially when the price of housing has gone up double digit percentage points for the area in question.
I live in Truckee, it's a town of 16,000 people. We'd see deaths on facebook, etc. but that deaths weren't nearly high enough to cause a problem with finding any sort of staff. The prblem, as the article states - there IS NO HOUSING.
In Truckee - this is the problem: Sure, you can live in Reno 40 minutes away and make $15-20 an hour there(but rents are rising - I know someone paying $3200 for a place now), but then why would you commute to a small town 45 minutes away for the same $17 if you can't live there and enjoy the mountains?
“ Those who beat the real estate curve and bought property for their employees to live in before home prices skyrocketed are faring much better on the hiring front than their comrades.”
So we are returning to factory towns? It seems the only solution is the cap rental prices, which traditionally doesn’t work.
Maybe the city should be buying at the housing and providing it?
Really? I thought companies owning the housing of their workforce to be a terrible thing because it could easily lead to abuse, and more likely than not will. I didn’t know that governments were already doing this… That’s depressing.
I agree with allowing the market to function, but I also believe it needs to be coupled with a land value tax to incentivise efficient use of the land. A land value tax incentives people to build up and build in a space efficient manner.
Aren't property taxes a form of a land value tax? You could argue that property taxes aren't high enough - or priced below market value - to incentivize efficient resource allocation.
I would agree with you typically, but it seems in this case in Tahoe, if you don’t interfere in the market, the businesses will eventually either go out of business, or the economy will stagnate. Property owners are not willing to lower their price, why should they? Businesses can only raise the money they’re willing to offer so much. They could raise prices but then you run into a tipping point where people say you know Tahoe is just too expensive to get a sandwich. Eventually it’s a race to the top, but the top is a cliff.
I guess the businesses could close and people could just stop going to Tahoe all together.
As services raise prices and/or quality suffers, the desirability falls, and so will the housing prices, unless the owners like a private resort. It may take time.
Agree with the land value tax (if you don't have it) - it would flatten and speed things up.
It's not going to change until the UI benefits and eviction moratoriums end. What person is going to go and work all day for less money?? Seriously, if you don't work right now you are getting UI, Food Stamps, and you don't have to pay rent. It literally doesn't not make economic sense to work right now for many people.
>>>If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt?
You mean the human condition? Life has always been this way and since we're not a post-scarcity society yet I don't see how any workable system would not be morally bankrupt by this standard.
How can we be sure that we aren't? Or rather, how will we ever be able to tell whether we are living in a post-scarcity society, when artificial scarcity is imposed by those with political power?
We don't have true scarcity in housing. What we have is artificial constraints on building being imposed by the state.
We also don't have scarcity in basic foodstuffs. There's plenty of food. What we have is a system of distribution that requires that people exchange money for food, and the only source of money that most people have is to exchange it for their labor. We could instead just give people enough money to pay for basic food, energy and housing.
There is scarcity in other things, and there will always be scarcity in some things, even in "post-scarcity" societies. Capitalist market economies are usually very efficient at allocating such resources, and people would still have the incentive to work so they can get the extra things that they want to have for themselves or their families. Capitalism can co-exist with a post-scarcity society.
A workable but less "morally bankrupt" system would lower the cost of housing by using government policy to increase supply, and would give people enough cash to pay for basic food, energy and housing through a universal basic income.
Capitalism is extremely efficient at aligning resources for profit. Whether or not that’s what you’d want as a society is another matter.
Personally I’d argue that capitalism is great for non-necessary consumer goods, and disastrous for necessities. My TV is cheaper (inflation adjusted) and measurably superior to what was on sale half a century ago. Unfortunately my house is massively more expensive than it was half a century ago, and unlike a TV I will die sooner if I don’t have some sort of dwelling to live in.
If we’re going to keep capitalism, and the growing sentiment against it here makes me question even that, we need to put stronger safety rails around it.
We absolutely have an artificial housing supply shortage, that is induced by homeowners loving 15%+ year over year housing market increases and not wanting the undesirables to move in or be able to afford housing in the first place.
It would be so much more simple to say you can just buy a lot for maybe $25000 and put one of these garden sheds in and live on it https://www.costco.com/stonecroft-12'-x-10'-wood-storage-she.... There you go, full housing setup for under $30000, but it would be a very low standard of living, but much nicer than sleeping in a car or on the street. In many populated counties it is illegal to sleep on your own land if you don't have an inspected house or utility hookups.
In many municipalities it’s illegal to live in a house below a certain size, even if it’s up to code in every other way. This is why most “tiny homes” are on trailers, putting them on wheels makes them technically not homes.
There are also often limits on adding new dwelling space to your land. I would need a permit to add a detached studio to my back yard if it crosses the threshold of being a “dwelling unit”. Usually a bathroom is enough to trigger this regulation.
I think we've gone from actual scarcity to the current era of artificial scarcity. Hopefully we get to post-scarcity once we solve that.
We have plenty of everything, enough for everyone but we allocate and distribute it too inefficiently. Supermarkets destroy their unsold food, and Amazon their unsold products. Zoning laws mandate low density areas when we have the engineering to build enough homes for all vertically on the land we do have. Apple could provide iPhones at a cost that everyone can afford but they deliberately price them at a level that only a top % can handle. I think we all know about the scam of diamonds at this point as well.
It's all just fake and caused by the desire for short term profits.
So your comment just made me think about this differently in a new context of limiting the artificial scarcity. There is a store near me, that has bins and everything is one price. It drops each day of the week and resets on Friday to $10. The lowest day is 0.50 cent. The store is selling all Amazon and Target discarded items. I go on the $1 and 0.50 day and can easily buy enough food, clothes, cosmetics and household goods to survive a week for like $20, if not less.
So realistically it's a decent way of managing the excess and providing equality.
They don't sell like produce obviously but the food is almost never expired only expiring soon sometimes.
2) Maybe we should think of citizens as dependents, and increase America’s gdp to offset the costs associated with that. An American poor first politic. To be moral, of course.
> It's not going to change until the UI benefits and eviction moratoriums end. What person is going to go and work all day for less money??
Or, employers could just offer more money.
> Seriously, if you don't work right now you are getting UI, Food Stamps, and you don't have to pay rent.
Note that there is not a rent moratorium, just an eviction moratorium, so unless you plan is to both get evicted and deal with the unpaid debt (perhaps through bankruptcy, which has downstream adverse impacts) when the moratorium ends, and not move.(since there is likewise not a moratorium on adverse credit reporting, or potential landlords making credit checks) there are very good reasons to pay rent.
> Note that there is not a rent moratorium, just an eviction moratorium
We take this as a given, but historically this is actually quite unusual. It was not uncommon for kings in the past to declare a “debt jubilee” where all debts public and private were null and void. These were commonly called for both important royal events, as well as locally after natural disasters struck.
Obviously there are knock on effects to this. It’s very hard to give out loans if the loan is likely to get wiped out when the king dies, and the cost of any loan is inexorably tied to the risk of a jubilee. But given the scope of personal economic crisis in the face of the pandemic, perhaps we could have taken a page from history and provided some relief to our poor and vulnerable, rather than letting them go destitute through no fault of their own?
if its any consolation, the sheriff's office in charge of evictions will be hiring...and if the sheriff cant pay market rate...people can live rent-free! (for a while longer)
In my mind that's a symptom of rising inequality. On the one hand we are allowing housing, education, health care prices and the incomes of the top x % to rise rapidly but we also expect prices and incomes in other sectors to stay same or only rise a little. That's simply not sustainable.
If you are in the lower income ranks it makes sense to check out of this system and not take these jobs. What's a a job good for if you can't afford to live with the income?
In the long run I think society should accept that lower income people also should benefit from a growing economy and not just the top ranks.
"Meanwhile, Barrios told me that his landlord is about to increase the rent on the place where he lives, from $1,100 to $1,600"
How can this rent increase be justified other than with unlimited greed? And the same people are surprised that people don't want to stay in a job with stagnant wages while their costs are rising at incredible opace.
Because the landlord heard from other landlords that they’re getting similar rates now.
I moved from Reno to SF to Reno through the pandemic. Houses that were $1600 two years ago are $3000/mo now. I can afford it, sure… but it’s not really a $3000 house, the $2000 houses are even worse, and the locals getting local wages are really going to struggle to get decent housing at a decent rate.
I fully expect my rent to get raised when my lease is up, and there’s little inventory to move to. It’ll just rise and rise.
At some point the equity game may start to follow the GME trends and crash, but CA homeowners showing up in NV with cash are really distorting the market. And landlords are seeing their house prices go up $50-100K in 90 days and calculating what they should be charging for rent off that. A lot of these houses were bought more than 3 years ago, so the rental margins qualify more as takings than real market value.
Well....the article does mention that business owners are becoming property owners and landlords so they can make more money in their business... seems like your wish is coming true.
This seems like markets adjusting to inflation. It’s a combination of real estate NIMBYism and COVID. If the cost of real estate goes up, you have to pay people more or they move. And to pay people more you may have to charge more for the goods and services.
Rent control and government owned housing tend to work less than increasing the housing stock. (Affordable housing problems only help a small fraction of people and raises the cost for everyone else slowing down new building)
I wonder if the underlying cause is the discrete punch of Covid having flushed out what were otherwise marginally-unsustainable living situations. Imagine: your rent is uncomfortably high for your wage, but you're barely treading water. The one time expense of quitting your job and moving to a lower cost of living area would disrupt you too much, and so you remain even though it sucks. Then Covid hits, your job goes away, your income (if any) is now decoupled from having a specific residence, and so you move. Even if your previous job comes back, and even if they offer to pay more, you certainly aren't going to move back into that trap!
>> "Wilderotter starts his employees at $20 an hour."
That's the entire problem. Everything is tied to pay. The reality is that nobody can get good labor, let alone good skilled labor, at 20$/hour. If your business model can only work by paying minimal wages then your businese model has failed. Labor costs, wage expectations, have gone up. That is a good thing for employees. I have little sympathy for anyone who thinks they should be brought back down.
I don't disagree with you here. But we need to be explicit about the implications: whole sectors of the US economy have a "failed business model" by this standard. In particular, the US model of restaurants is fundamentally based on paying minimal wages to almost all employees.
A restaurants greatest costs aren't labor but rent. They pay huge amounts to landlords, amounts higher than the landlords mortgage costs. A restaurants low-wage employees then pay 50+% of their wages to other landlords to cover other mortgages. That's the real problem killing the business model: too many people shovelling too much money in exchange for permission to work/live at a particular location. A more normal situation would be where rents are again cheaper than mortgages, when rent represents less than 50% of expenses. Then the restaurant business model starts making sense.
And how much of the labor costs in fact goes to the rent paid by those workers? My point is that rents, payments to landlords, take little pieces out of everything.
But then your observation isn't really about restaurants at all, and is instead a general complaint that mixes various amounts of:
1) "the rent's too damn high"
2) too much renting going on, not enough <something else>
I'm not sure I disagree with either, but it doesn't seem that can explain the situation in restaurants, since it affects huge chunks of the population and the economy.
If landlords are charging significantly more then the mortgage costs, then what if the rent model was switched to an auction with a minimum set at the landlord mortgage costs plus some percentage on top? That way the landlord gets what they need and the pricing is not arbitrary, but at least fixed to some realistic measure.
Note: I’m not very familiar with the situation, just ideating.
Why should rent be higher than mortgage costs? Why should renters pay down principal, effectively purchasing the property for the landlord?
In the past, landlords owned property and rented it out. If there was a mortgage, rent covered the interest payments rather than principal (interest rates were once far higher than today) and rents were generally lower than mortgage costs. If rent is higher than mortgage costs, the renter would be better off purchasing the property. A landlord that is asking rents higher than their mortgage is simply leveraging their better credit rating, renting out an asset for higher than someone with similar credit could purchase it.
In cases where rent exceeds the mortgage, I think the reasons would be to cover the cost of capital, risk, and operational expenses. In this case, the long term expected value of the property might be flat or growing at a lower than average rate so future expected gains can't be used to offset short term losses.
If this wasn't the case, in theory renters would just become buyers themselves.
Renters can’t become owners when multi billion investment firms are buying or own large percentages of the market. The market is incredibly distorted and inherently dysfunctional in its current state. Families should be living in housing they own our mortgage not paying someone else’s mortgage or profit to the investment class.
I think we agree that when rent exceeds the cost of a mortgage one of the possible root causes is the cost of capital is high for the renter. Whether the cost of capital should be the same across different populations (in this example - the renter and investment firms) is another question.
> In the past, landlords owned property and rented it out. If there was a mortgage, rent covered the interest payments rather than principal (interest rates were once far higher than today) and rents were generally lower than mortgage costs.
Got a citation for this claim?
During my 32 years living in the USA, and the 25 before that in the UK and elsewhere, I was never aware of rent working this way.
The difference between renting and owning was not so much the monthly payments, but:
* tenant has no financial or labor responsibility for repairs or capital improvements; landlord fully responsible.
* landlord collects all (if any) capital gains
* landlord pays insurance on building; tenant pays insurance on contents
Comercial property. Tenants are regularly responsible for repairs, insurance and upgrades. Do you really think a landlord will pay to remodel a space to suit each new tenant, to covert it from one use to another? Landlords dont pay for new decor or new equipment. They rent out the space. For a typical restaurant everything from chairs and cieling tiles to ovens and insurance is the tenants responsability. That big sign out front of every business isnt biuld by the landlord.
The issue is that all the business models in Tahoe seem to be failing, you can't have a modern town without a coffee shop, but the business cant generate enough to pay a few year round employees to live in comuting distance. A town cant be completely served by the children of second home owners the entire year.
I'd like to think that instantaneous change is merely the result of a system whose true state cannot be represented during the calm years. Permanent accumulation of durable objects is a fundamental problem. Whether it is money, land or power.
It's when their apparent value and their real value diverge that problems manifest. The solution has always been to let them deteriorate just like their physical counterparts. We have democracy with frequent elections to deteriorate power. We have inflation to deteriorate money. Where are the land value taxes that deteriorate land? Property taxes do exist but some states decided to freeze them, creating an extreme wealth transfer from the future to the past.
The housing crisis that makes the hiring crisis inevitable has been in the making for decades. If the price to rent ratio gets insane it will have to go down eventually, all at once instead of year by year. Of course it is entirely possible that people end up waiting half a lifetime for a correction.
If we want to prevent a crisis we have to do a little readjustment to reality continuously but people love to deny reality right until the moment it catches up.
Let's talk about a more familiar concept: Inflation. People hate it. They hate it so much they would rather see as little inflation as possible even if it comes at the risk of even more inflation in the future. The current inflation rate is a good example. It's high. It's definitively too high for a single year. However, when you look at the past 10 years it is just right. It's not high enough to raise interest rates because we have a lot of inflation to catch up on. We are like a student that forgot to do his homework and now has to do twice as much.
The housing market has a lot of catching up to do and when it happens it won't be pretty. Corrections are inevitable, we can only shift their date. I would argue that healthy markets merely correct themselves very frequently so the impact of every single correction is perceived to be insignificant.
> “You put an ad out and nobody even interviews,” Wilderotter said, echoing Barrios.
That's because you're not offering enough money. Raise it by 20%, 50%, 200%. Keep raising it until you get qualified applicants.
You will eventually find a price that attracts the people your business needs. And if that price is too high to turn a profit and there's no other way, shut down.
Article after article with business owners acting like they're entitled to pay workers sub-market and/or sub-living wages.
Time to wake up and face the fact that large sectors of the service economy are no longer viable due to decades of misreported inflation, trickle-down economics, and disastrous, unchecked monetary policy blunders.
The issue is that a lot of places are ran on thin profit margins. You would have to raise the price of goods, which then means you have to raise the quality of goods as well to outcompete highly optimized chain restaurants.
So the alternative seems to be…don’t do that, and be short-staffed while paying those who do continue to show up poverty-level wages for an ever-increasing workload. The quality of service and the reputation of the business suffers that way, causing them to fail or at least give up more business to other places that are raising prices accordingly.
Thin profit margins? Oh, boo hoo! So frickin what?
The free market runs in both directions. When labour is available, businesses use it to cram down wages - “if you don’t like it, find another job”.
But why is it, now that there is a wage shortage, we cannot use those same words back at businesses? “If you don’t like the lack of workers, increase the wage you are offering”?
Because that is exactly the problem. The free market is looking at the offered wages, and are showing businesses that those wages are not high enough in the simplest and most unambiguous way possible - with zero applicants.
And yet, businesses are squalling like spoiled, entitled babies that have just hit themselves with a hammer, and are blaming anyone but themselves.
I find it bizarre that the article doesn't mention immigration and how brutal ICE policies are discouraging seasonal workers from coming. I know someone who manages a restaurant in California. All the cooks are of Mexican descent. Obviously they are taking jobs no one else wants.
> “We literally do not have enough cooks to operate and after months of continuous hiring, training, begging, pleading and getting creative, we have a tiny, loyal, incredible team of individuals at their breaking point and in desperate need of help,” the owners wrote.
I'm genuinely not being facetious: why don't they pay more? Isn't that the solution to a labor shortage in a free market?
Modern economics seems to believe that CEOs can only be motivated by more and more money. But low income people get lazy and spoiled if they make more money.
Because they’d rather complain than pay better wages. It’s easier to shove the problem onto the local government than it is to have them pay their own wages. This is common among all industries/businesses. Have the masses pay - not your business.
I’ve seen the same thing occurring in central Oregon in spots that usually are busy in the summer. You see places closing early or not opening due to staffing issues, right in the middle of the busy season when people are over there vacationing. It’s caught me by surprise when I noticed things like the grocery store closing super early, or cafes being closed on days they’d usually be open, all with signs on the door saying that it’s due to staffing shortages.
Living about 45 minutes north of Tahoe, the article is spot on in highlighting housing being an issue. Near by areas like Reno, Plumas County, etc. have seen rents and housing prices skyrocket. My condo in plumas has doubled in value in less than 5 years.
There is another aspect to this though. Before I get to that, employers here in my small town are trying to bend over backwards to hire people including a local restaurant owner offering to let one woman bring her young (less than a year old) child to work since childcare is scarce. Another business owner offered "make your own schedule - just need one weekend a month" as they want a weekend to themselves. At the other extreme, you have people with little or know experience demanding more (even when stores are offering $18/hr) yet when hired - they don't show up reliably, spend time on their phones, etc.
At some point, the employment situation will work itself out, but there is a significant and consistent issue (across multiple fields) that a notable percentable of young people are entitled and have a crap work ethic. Just like companies wanting to pay too little and are getting bit by it, the lack of work ethic will come back to those showing such now.
Housing is the crux of this problem and is an issue so intractable, I genuinely don't see a solution. The way the housing market across much of the western world is the way that now is, is because rich people made it that way, and they have all the influence, power and control now, so nothing us small folk can do will likely change things in any meaningful way.
Housing has become a commodity, an investment, and so the rich, with their sloshing, frothing waves of cash, are buying it up at an ever accelerating pace. Not buying it up so they can live in these homes mind you, but buying it up so they can extract rent, extract PROFIT from homes that are meant for people and families to live in. So now, rather than serving as a place for people to live, housing is serving as investment for the rich to get ever richer from.
The real problem is that when it comes to housing, the marginal buyer is now some hyper-leveraged corporation with near limitless access to cheap capital, or some billionaire investor, who'll happily bid 50% over asking as they're planning on renting the house out for the maximum amount possible and bundling their "Assets" into a REIT, and so they'll gladly pay over asking as its just a cost of doing business.
So now you've got the rich through their companies and trusts buying up entire neighborhoods, out-bidding regular folks for homes, raising rents to increase profits, and turning homes that people could once have lived in, into vacation properties and short-term rentals or worst of all letting them sit empty just so they can sell them when the value goes up.
Increasing wages is one absolutely necessary step towards fixing the economy, but real wages would have to rise 100%, 500%, a even f*king 1000% in a lot of places for regular folks to actually be able to afford the kinds of homes that a family could once have afforded on a single middle class income.
So literally the only thing that can fix things is to make housing worth a lot less. But that will never happen because that would cause some already fantastically wealthy people to be a little less wealthy, and the rich would rather people die and go homeless than ever be less rich.
> so nothing us small folk can do will likely change things in any meaningful way
A lot of people feel this way, a plurality one might even say, more is possible than despair leads us to think. “[Capitalism’s] power seems inescapable. So did the divine right of kings.”
> so nothing us small folk can do will likely change things in any meaningful way.
Small folks DO have the ability to make change--it's called a labor strike. And, while the little people aren't thinking of it this way, that is precisely what is happening right now.
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[ 2.8 ms ] story [ 237 ms ] threadMargins are razor thin in restaurants specifically. If you pay people more, you’ll need to raise your prices and that will offset the pay raise if it happens across the board.
What am I missing?
CEOs, managers, capitalist rent-seekers (outflow)
Of course in the general case, the places the workers do shop at, probably supermarkets, will notice that people have more money to spend and will likely try to capture that extra money for themselves - either because demand of certain items increases or just plain greed.
So continues the endless, exhausting and unwinnable battle between wages and inflation
Exactly.
This while at the same time some people are becoming very rich and the country considers itself very wealthy.
What I am debating is whether raising rages simply causes inflation that then negates the effect of the wage. That's not a problem with an economy per-say, but rather just how an economy works. But perhaps I'm missing something.
All of that said, I share the concern about wealth inequality. A country will eventually collapse if the people at the bottom feel like the game is rigged and they will never get ahead.
You could argue that exactly this has happened when upper incomes were raised disproportionately in the last few decades. All the major expenses/investments of that class like housing, health care, education, stocks and others shot up. Seems there is more money around than they can use productively so they just kept bidding up prices.
The problem here is equating wages and income.
It is to everyone’s benefit if jobs with a net positive value get done, even if the value isn't enough to support the worker at an adequate lifestyle without supplementation.
Everyone should also have income to support an adequate lifestyle, but there's no reason that needs to come from wages — that's what a social welfare system, whether classical or UBI-based — ought to guarantee.
Say we decide $1,000/month is the minimum support level. It is generally better that a job that the market would pay $500/month gets done, the profits of owners and wages of higher level employees resulting from that job being done get paid and taxed, and the worker gets at least $500 in social support than that the job goes undone, the taxes on the other income streams dependent on it go unpaid, and the worker collects $1,000 in social support. And its even worse for the worker in the latter case if the minimum income we demand to allow work is higher than the social support we provide the able bodied without work (which is generally the case in the US, especially unless you have dependent children, outside of short-term unemployment of those who previously had sufficient income for UI to provide an adequate temporary support.)
That's how it seems to me as well. This article also mentions it towards the bottom in reference to restaurants in New Orleans...
https://www.msn.com/en-us/news/us/is-raising-the-minimum-wag...
Do we have any examples / models where people having figured out how to raise the bottom without raising the entire ladder?
But those wealthier customers probably provide high-end labor inputs to goods and services the redtaurant worker consumes, so driving up their expenses increases their salary demands which drives up the costs of the goods and services their labor contributes to, thus driving up the restaurant worker’s cost of living.
Obviously this will be very attenuated, but it is a real effect.
https://www.reddit.com/r/LeopardsAteMyFace/comments/o9mbz8/t...
Unless you are living with parents, or with multiple roommates, the housing market in these cities will price you out.
We have this same scenario taking place in the area I live, and NIMBY/zoning laws prevent affordable housing from being developed. I've been to town hall meetings where people decry "affordable housing" as bringing Section 8 and "undesirables" to the area. You mention that even the local school teachers have to commute in from over an hour away due to afford a place to live, but it falls on deaf ears.
If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc.
Jackson Hole reserves some housing for those who work full time for an employer in Teton County [1]. This strikes me as a reasonable balance between wanting to control housing stock and maintaining access to cheap labour.
[1] https://www.tetoncountywy.gov/720/Workforce-Homes
If you buy a workforce house, there is obviously no obligation to maintain employment. I’m not sure how it works for rentals.
The alternatives are flying people into company-owned housing, the way they did in Fargo during the oil boom. That seems far less savoury.
Yes. And then be charged with fraud.
Fair enough. I don’t know the text of the law.
Also, the entire county has a population just over 20,000; the city of Jackson, less than half that. This would cause problems for the employer who let it happen as well as the new resident.
Edit: I know HN hates tedious back-and-forths, so let me just jump to the substantive point: any time you have a situation where you have special carve-outs for an essential good, you're not really solving the problem, you're just encouraging people to game it. See the past thread about enrolling in college part time to get health insurance.
The law isn’t code; mental state matters. If you got a job to buy a subsidised house with a plan to quit, in a small town, that will cause you problems. If you provided that sham job, it will cause you problems.
Maybe they hired a great lawyer and never sent any text messages about their brilliant plan to defraud their neighbours. But most probably they didn’t, and that fact pattern would certainly be enough to warrant scrutiny.
https://en.wikipedia.org/wiki/Company_scrip
There was good reason to do away with such concepts.
Night and day. Company doesn’t own the home. Company doesn’t own the stores you shop at.
Where is the non-dollar payment?
The law says landlords must rent certain units to people who work locally. The company is never involved except in verifying employment. If the employee wants, they can commute through the pass to Victor, Idaho and earn exactly what they were earning before.
Got it. I see what you mean. No, they are not. Practically speaking, these jobs are not ones that can be done remotely. (But maybe another could.) More practically, absent these measures, those workers are commuting in.
They hire teams of two and force the men to do the manual labor and the women to do the deskwork.
They force the team to work and live on site. As in, to work there yoy must reside there. They make this sound like a bonus - it's not.
Now, when you inevitably decide to leave you must first find alternative living situation, and another job to pay for it while working extremely long hours at this place (sometimes 7 days a week open to close if they cant hire a relief team- and they only hire teams).
This is beyond evil.
When I was about 19 I worked on a rock quarry in Comstock, Texas. We had to live on-site at the 'wetback shack' (owner's words, and most of the employees were indeed illegals driven over from Acuna, Mexico). This was because he wanted to start work at 4am and this ensured everyone would show up- not his only reason however.
We made minimum wage busting and palletizing rock, even if we operated heavy machinery wage didnt change. They charged us $3 per soda or water at the swear to God it literally was Company Store. We also, we found out when we got our 1st check, were charged rent to stay in the shack. I think at what 3.30/hr (one water per hour!) damn near nothing was left. We, my friends and I who had family in Del Rio, Tx, could leave, and we did. The poor bastards who worked harder than anyone and were generally shit on (the illegals) they couldn't leave. The people who were from Comstock outskirts where there were no other jobs or places to rent? They stayed.
This was in 1999.
Tying living in any way with work is disgusting and not in any way shape or form altruistic.
Sure, you're missing the company owning the church, but fewer Americans are religious now. The employer also doesn't own all the local stores, but "It's not a company town because the stores are owned by people that all know each other (due to it being a small town), instead of one individual" is a little too close to be comfortable to me.
> If the local residents are wealthy enough to live in the area, perhaps businesses have to bite the bullet, raise prices locally, and pay more for essential services like bartenders, wait staff, retail, etc
I love your definition of "essential services" are bartenders and wait staff. You sound like a real great person to be planning for critical events, such as wildfires which occur in our area.
Also "If the local residents are wealthy enough to live in the area" - lol, do you realize in our Town of 16,000 people, there are more than 50% of our houses that are NOT locals. On a busy weekend we expand to about 55,000 people. The problem is not the full time locals, but the temporary residents who exacerbate this problem. Their houses remain off the market for local residents to rent because they want to (rightfully so) njoy their second home for a few weeks a year - which precludes a long-term leaser. It doesn't matter how much wages rise, locally - there are CFO's of local businesses who have had to move because they cannot find housing.
Yes, we live in a national forest, so simply building more housing is slowed down by natural beauty and environmental assessments, and the usual NIMBYism too. But the town is quite aligned behind trying to solve this problem somehow.
I am the OP the commenter was referring to. I wasn't going to bother responding to a nitpick on my use of the word "essential" but you summed up my meaning perfectly.
If all the bars, restaurants, cafes, dry cleaners, etc. go unstaffed (as they are right now), headlines start being made. We don't need to lump people into brush-fire fighters and bartenders in terms of who is essential.
To top it off I'm not a city person and I used to live in Truckee, CA, where this poster is living.
Can’t wait until this explodes and we can have sane housing policies again.
The fear-mongering is always about “first they’re coming for companies, then they’re coming for your home property tax!” and people believe it. With that said, I really hope they DO come for home property taxes, as right now it’s a big part of what encourages the wealthy and previous generations to stay put and never sell (or become landlords and move elsewhere) while pricing new homeowners out of the market, as now in addition to the mortgage on that seven-figure starter home they’re saddled with a few-grand-per-month tax bill.
https://www.taxfairnessproject.org/ has more info.
Seems like the fears are valid, no?
I've traveled in or through Asheville, Greenville, Savannah, Knoxville, Jacksonville, and noticed it. Savannah was probably the worst, and it is not a high cost area, at all.
I live in Florida. There's a burger king near me that is just...empty. Lights on, nobody there.
The 7/11 near me has one employee. He runs 3 registers to keep the line moving. I see him training people about once or twice a month, but they never seem to stick around.
Yes, restaurants are busy here, but the service and food quality is obviously suffering.
Look up housing prices in the Tampa bay area. The new construction is all "Luxury" (just a word, still crappy) so they can sell $1,500 one bedrooms to foreigners.
Not that anyone's surprised, but look to Florida for more collapses (ecosystems, economic, not just buildings) coming soon...
Not in my experience.
> Look up housing prices in the Tampa bay area. The new construction is all "Luxury" (just a word, still crappy) so they can sell $1,500 one bedrooms to foreigners.
This just reads as incredibly bigoted. We're getting a decent amount of immigration influx but the majority of population rise is from out of state. Affordable housing is being developed and has been the last few years . New funding initiatives for affordable housing are in the works across the bay [1] [2], and there's a massive mixed income complex in planning for a major site across the river from downtown Tampa.
Demand is outpacing supply here. Plain and simple.
1. https://www.google.com/amp/s/www.tampabay.com/news/st-peters... 2. https://www.google.com/amp/s/www.tampabay.com/news/hillsboro...
The topic is about staffing shortages in one city. I laid out my experience seeing this same thing elsewhere. And two different people tell you they see it in Florida.
Instead of adding your input, which is valid, you seem to contest everyone else.
That's my opinion. But I didn't downvote you, as I cannot.
I'm glad Tampa doesn't have the same issue most other cities in the US are seeing. You are lucky, it causes a lot of nagging issues.
It's going to take a while to sort out who works where in the new equilibrium.
Seems to me one of those two classes will need to be inconvenienced if we don't want inflation to spiral out of control, because otherwise the asset owners will continue to buy more assets with cheap money that will push prices up, while asset consumers will continue to require higher and higher salaries to afford to pay the increasing rents to the asset owners.
Asset owners should be the ones taking the hit since they have been backstopped for far longer and are in a much better financial position to deal with it. But the asset owner class is also the one running the country and its tough to imagine them doing something against their short-term self interest.
Gonna be interesting to see what kind of equilibrium shakes out. I hope this plane can be landed without crashing...
Very true. The Fed pretty much exclusively worries about asset owners and how to drive up asset prices even more. And most people in political or business leadership are asset owners.
I don’t think this will end well. Either we will become a society of super rich people that live separately from a large underclass or there will be a revolution at some point.
Someone working full time should be able to pay life expenses without government assistance.
> Las Vegas gas stations are running out of gas because there aren't enough truck drivers to bring the gas here.
Naive view here, but isn't this an indication that the job is not paying enough for the location?
It doesn't matter how much you're paying people - they can't find a place to live here. The CFO of company here has had to move to Arizona recently and works remotely now. I live in Truckee and this isn't just affecting temporary workers or low-paid workers. This isn't even the "well it's gonna be $3500 for a one bedroom like SF, so I'll pay up". people simply can't find places in a reasonable pricing band. Then, when they find it - the owners sell it next year and the search begins again.
Anybody without a house is in a vulnerable state in this economy IMO.
Let's just mention that the Biden administration undid the Trump restrictions on immigration and instituted the child tax credit.
The second part is not true. As part of COVID stimulus, Congress instituted a temporary increase in the pre-existing child tax credit, and as part of making that stimulus timely made it so that a portion of the credit would be paid out monthly this year.
Avoidance of such positions for perceived risk seems more likely, as well as low pay and high stress.
1) It seems obvious that the high fatality rate among line cooks and other “essential workers” has driven them out of that line of work. If my colleague died for a line cook job, I’d strongly consider changing careers.
2) We’re running into the consequences of spending a year calling these people “essential workers” and “heroes” after decades of treating them like garbage. They’ve had a taste of dignity and recognition that they’ve been denied for a long time, good luck taking it back away.
3) In many ways this looks less like a labor shortage and more like a capital strike. Unless if you’re in an area where there has been significant migration, the workers do exist and are willing to work … but not at the rates that capital is demanding that they work.
In Truckee - this is the problem: Sure, you can live in Reno 40 minutes away and make $15-20 an hour there(but rents are rising - I know someone paying $3200 for a place now), but then why would you commute to a small town 45 minutes away for the same $17 if you can't live there and enjoy the mountains?
So we are returning to factory towns? It seems the only solution is the cap rental prices, which traditionally doesn’t work.
Maybe the city should be buying at the housing and providing it?
We do this in New York. It’s pork for politicians.
Is their suffering better or worse than the "distortions" caused by "interfering" in the market?
I guess the businesses could close and people could just stop going to Tahoe all together.
Agree with the land value tax (if you don't have it) - it would flatten and speed things up.
2) If you need to hold hunger and homelessness over people’s heads in order to make them work, maybe your system is morally bankrupt?
You mean the human condition? Life has always been this way and since we're not a post-scarcity society yet I don't see how any workable system would not be morally bankrupt by this standard.
Maybe people would be more eager to work if the benefits were more equitably distributed?
How can we be sure that we aren't? Or rather, how will we ever be able to tell whether we are living in a post-scarcity society, when artificial scarcity is imposed by those with political power?
We don't have true scarcity in housing. What we have is artificial constraints on building being imposed by the state.
We also don't have scarcity in basic foodstuffs. There's plenty of food. What we have is a system of distribution that requires that people exchange money for food, and the only source of money that most people have is to exchange it for their labor. We could instead just give people enough money to pay for basic food, energy and housing.
There is scarcity in other things, and there will always be scarcity in some things, even in "post-scarcity" societies. Capitalist market economies are usually very efficient at allocating such resources, and people would still have the incentive to work so they can get the extra things that they want to have for themselves or their families. Capitalism can co-exist with a post-scarcity society.
A workable but less "morally bankrupt" system would lower the cost of housing by using government policy to increase supply, and would give people enough cash to pay for basic food, energy and housing through a universal basic income.
Sure, as long as "efficient" means "most aligns with the desires of capital".
Personally I’d argue that capitalism is great for non-necessary consumer goods, and disastrous for necessities. My TV is cheaper (inflation adjusted) and measurably superior to what was on sale half a century ago. Unfortunately my house is massively more expensive than it was half a century ago, and unlike a TV I will die sooner if I don’t have some sort of dwelling to live in.
If we’re going to keep capitalism, and the growing sentiment against it here makes me question even that, we need to put stronger safety rails around it.
It would be so much more simple to say you can just buy a lot for maybe $25000 and put one of these garden sheds in and live on it https://www.costco.com/stonecroft-12'-x-10'-wood-storage-she.... There you go, full housing setup for under $30000, but it would be a very low standard of living, but much nicer than sleeping in a car or on the street. In many populated counties it is illegal to sleep on your own land if you don't have an inspected house or utility hookups.
There are also often limits on adding new dwelling space to your land. I would need a permit to add a detached studio to my back yard if it crosses the threshold of being a “dwelling unit”. Usually a bathroom is enough to trigger this regulation.
We have plenty of everything, enough for everyone but we allocate and distribute it too inefficiently. Supermarkets destroy their unsold food, and Amazon their unsold products. Zoning laws mandate low density areas when we have the engineering to build enough homes for all vertically on the land we do have. Apple could provide iPhones at a cost that everyone can afford but they deliberately price them at a level that only a top % can handle. I think we all know about the scam of diamonds at this point as well.
It's all just fake and caused by the desire for short term profits.
So realistically it's a decent way of managing the excess and providing equality.
They don't sell like produce obviously but the food is almost never expired only expiring soon sometimes.
Or, employers could just offer more money.
> Seriously, if you don't work right now you are getting UI, Food Stamps, and you don't have to pay rent.
Note that there is not a rent moratorium, just an eviction moratorium, so unless you plan is to both get evicted and deal with the unpaid debt (perhaps through bankruptcy, which has downstream adverse impacts) when the moratorium ends, and not move.(since there is likewise not a moratorium on adverse credit reporting, or potential landlords making credit checks) there are very good reasons to pay rent.
We take this as a given, but historically this is actually quite unusual. It was not uncommon for kings in the past to declare a “debt jubilee” where all debts public and private were null and void. These were commonly called for both important royal events, as well as locally after natural disasters struck.
Obviously there are knock on effects to this. It’s very hard to give out loans if the loan is likely to get wiped out when the king dies, and the cost of any loan is inexorably tied to the risk of a jubilee. But given the scope of personal economic crisis in the face of the pandemic, perhaps we could have taken a page from history and provided some relief to our poor and vulnerable, rather than letting them go destitute through no fault of their own?
If you are in the lower income ranks it makes sense to check out of this system and not take these jobs. What's a a job good for if you can't afford to live with the income?
In the long run I think society should accept that lower income people also should benefit from a growing economy and not just the top ranks.
How can this rent increase be justified other than with unlimited greed? And the same people are surprised that people don't want to stay in a job with stagnant wages while their costs are rising at incredible opace.
I moved from Reno to SF to Reno through the pandemic. Houses that were $1600 two years ago are $3000/mo now. I can afford it, sure… but it’s not really a $3000 house, the $2000 houses are even worse, and the locals getting local wages are really going to struggle to get decent housing at a decent rate.
I fully expect my rent to get raised when my lease is up, and there’s little inventory to move to. It’ll just rise and rise.
At some point the equity game may start to follow the GME trends and crash, but CA homeowners showing up in NV with cash are really distorting the market. And landlords are seeing their house prices go up $50-100K in 90 days and calculating what they should be charging for rent off that. A lot of these houses were bought more than 3 years ago, so the rental margins qualify more as takings than real market value.
That cook should be asking for a raise, right now.
His angle: "If you pay me more, I can probably find someone else I know to come work here."
My own experience suggests that carrot > stick 9/10 times when it comes to salary negotiations, however.
Phrasing as an opportunity generally lands better than phrasing as a threat.
Rent control and government owned housing tend to work less than increasing the housing stock. (Affordable housing problems only help a small fraction of people and raises the cost for everyone else slowing down new building)
I wonder if the underlying cause is the discrete punch of Covid having flushed out what were otherwise marginally-unsustainable living situations. Imagine: your rent is uncomfortably high for your wage, but you're barely treading water. The one time expense of quitting your job and moving to a lower cost of living area would disrupt you too much, and so you remain even though it sucks. Then Covid hits, your job goes away, your income (if any) is now decoupled from having a specific residence, and so you move. Even if your previous job comes back, and even if they offer to pay more, you certainly aren't going to move back into that trap!
That's the entire problem. Everything is tied to pay. The reality is that nobody can get good labor, let alone good skilled labor, at 20$/hour. If your business model can only work by paying minimal wages then your businese model has failed. Labor costs, wage expectations, have gone up. That is a good thing for employees. I have little sympathy for anyone who thinks they should be brought back down.
https://www.caminofinancial.com/restaurant-costs/
So does this one:
https://www.7shifts.com/blog/restaurant-costs/
and this one:
https://www.touchbistro.com/blog/restaurant-operating-costs/
1) "the rent's too damn high"
2) too much renting going on, not enough <something else>
I'm not sure I disagree with either, but it doesn't seem that can explain the situation in restaurants, since it affects huge chunks of the population and the economy.
Note: I’m not very familiar with the situation, just ideating.
In the past, landlords owned property and rented it out. If there was a mortgage, rent covered the interest payments rather than principal (interest rates were once far higher than today) and rents were generally lower than mortgage costs. If rent is higher than mortgage costs, the renter would be better off purchasing the property. A landlord that is asking rents higher than their mortgage is simply leveraging their better credit rating, renting out an asset for higher than someone with similar credit could purchase it.
If this wasn't the case, in theory renters would just become buyers themselves.
Got a citation for this claim?
During my 32 years living in the USA, and the 25 before that in the UK and elsewhere, I was never aware of rent working this way.
The difference between renting and owning was not so much the monthly payments, but:
* tenant has no financial or labor responsibility for repairs or capital improvements; landlord fully responsible.
* landlord collects all (if any) capital gains
* landlord pays insurance on building; tenant pays insurance on contents
* owner combines all above roles.
It's when their apparent value and their real value diverge that problems manifest. The solution has always been to let them deteriorate just like their physical counterparts. We have democracy with frequent elections to deteriorate power. We have inflation to deteriorate money. Where are the land value taxes that deteriorate land? Property taxes do exist but some states decided to freeze them, creating an extreme wealth transfer from the future to the past.
The housing crisis that makes the hiring crisis inevitable has been in the making for decades. If the price to rent ratio gets insane it will have to go down eventually, all at once instead of year by year. Of course it is entirely possible that people end up waiting half a lifetime for a correction.
If we want to prevent a crisis we have to do a little readjustment to reality continuously but people love to deny reality right until the moment it catches up.
Let's talk about a more familiar concept: Inflation. People hate it. They hate it so much they would rather see as little inflation as possible even if it comes at the risk of even more inflation in the future. The current inflation rate is a good example. It's high. It's definitively too high for a single year. However, when you look at the past 10 years it is just right. It's not high enough to raise interest rates because we have a lot of inflation to catch up on. We are like a student that forgot to do his homework and now has to do twice as much.
The housing market has a lot of catching up to do and when it happens it won't be pretty. Corrections are inevitable, we can only shift their date. I would argue that healthy markets merely correct themselves very frequently so the impact of every single correction is perceived to be insignificant.
That's because you're not offering enough money. Raise it by 20%, 50%, 200%. Keep raising it until you get qualified applicants.
You will eventually find a price that attracts the people your business needs. And if that price is too high to turn a profit and there's no other way, shut down.
Article after article with business owners acting like they're entitled to pay workers sub-market and/or sub-living wages.
Time to wake up and face the fact that large sectors of the service economy are no longer viable due to decades of misreported inflation, trickle-down economics, and disastrous, unchecked monetary policy blunders.
This makes no sense in context.
Highly optimized chain restaurants are not known for paying waitstaff high wages.
You use the same ingredients as the day before: “This is the price of a steak in Lake Tahoe now.”
The free market runs in both directions. When labour is available, businesses use it to cram down wages - “if you don’t like it, find another job”.
But why is it, now that there is a wage shortage, we cannot use those same words back at businesses? “If you don’t like the lack of workers, increase the wage you are offering”?
Because that is exactly the problem. The free market is looking at the offered wages, and are showing businesses that those wages are not high enough in the simplest and most unambiguous way possible - with zero applicants.
And yet, businesses are squalling like spoiled, entitled babies that have just hit themselves with a hammer, and are blaming anyone but themselves.
If no one is applying for your jobs offer more money, that’s how supply and demand works.
I'm genuinely not being facetious: why don't they pay more? Isn't that the solution to a labor shortage in a free market?
There is another aspect to this though. Before I get to that, employers here in my small town are trying to bend over backwards to hire people including a local restaurant owner offering to let one woman bring her young (less than a year old) child to work since childcare is scarce. Another business owner offered "make your own schedule - just need one weekend a month" as they want a weekend to themselves. At the other extreme, you have people with little or know experience demanding more (even when stores are offering $18/hr) yet when hired - they don't show up reliably, spend time on their phones, etc.
At some point, the employment situation will work itself out, but there is a significant and consistent issue (across multiple fields) that a notable percentable of young people are entitled and have a crap work ethic. Just like companies wanting to pay too little and are getting bit by it, the lack of work ethic will come back to those showing such now.
Housing has become a commodity, an investment, and so the rich, with their sloshing, frothing waves of cash, are buying it up at an ever accelerating pace. Not buying it up so they can live in these homes mind you, but buying it up so they can extract rent, extract PROFIT from homes that are meant for people and families to live in. So now, rather than serving as a place for people to live, housing is serving as investment for the rich to get ever richer from.
The real problem is that when it comes to housing, the marginal buyer is now some hyper-leveraged corporation with near limitless access to cheap capital, or some billionaire investor, who'll happily bid 50% over asking as they're planning on renting the house out for the maximum amount possible and bundling their "Assets" into a REIT, and so they'll gladly pay over asking as its just a cost of doing business.
So now you've got the rich through their companies and trusts buying up entire neighborhoods, out-bidding regular folks for homes, raising rents to increase profits, and turning homes that people could once have lived in, into vacation properties and short-term rentals or worst of all letting them sit empty just so they can sell them when the value goes up.
Increasing wages is one absolutely necessary step towards fixing the economy, but real wages would have to rise 100%, 500%, a even f*king 1000% in a lot of places for regular folks to actually be able to afford the kinds of homes that a family could once have afforded on a single middle class income.
So literally the only thing that can fix things is to make housing worth a lot less. But that will never happen because that would cause some already fantastically wealthy people to be a little less wealthy, and the rich would rather people die and go homeless than ever be less rich.
And, I'd suggest, structuring property taxes to make real estate investment less lucrative.
A lot of people feel this way, a plurality one might even say, more is possible than despair leads us to think. “[Capitalism’s] power seems inescapable. So did the divine right of kings.”
Small folks DO have the ability to make change--it's called a labor strike. And, while the little people aren't thinking of it this way, that is precisely what is happening right now.