The Unemployment Benefits Myth – Pt. 3


Food Services

There is a lot of Trump Nazi Party propaganda claiming our food service industry worker shortage is due to Federal Unemployment Benefits. This claim is almost pure excrement. When you get to the end of this you will now have a greater understanding of The Bottom Moved Higher segment of the previous post. You cannot fully explain the truck driver shortage until you understand this market segment. In the first installment I told you there were basically three types of people who enroll in truck driving school.

  • People who think driving a big rig is cool and has been their life-long ambition from childhood.
  • People who are cast out of or burned out from other professions.
  • No other good choice.

As part of that I told you about my burn-out phase, another guy who was forced out, and a kid who lived on the streets until he was old enough to get a free ride into truck driving school. I don’t personally know every trucker in America, but I have known quite a few over the course of my life. That trinity of people holds pretty true. Some people add a fourth category of socially awkward people who go into truck driving so they can spend most of their days alone. I consider that a sub-group of the first.

Traditional Food Service Workers

Before we go too far we need to establish what has been traditional food service workers. I will hit the larger categories and undoubtedly miss some. Yes, some people want to be chefs or just cook food. Yes, I have read newspaper stories about waitresses retiring after 40 years. We need to agree to limit this conversation to:

  • Food server
  • Bus boy – dish washer
  • Line cook

So we are talking waiting tables, cleaning tables, and cooking in chain restaurants where you really don’t get to season or prepare the food. If you don’t understand what I mean there, sit at the “bar” area in a Steak & Shake restaurant and watch the process to make the meals.

This three jobs have traditionally been filled by the following types of people.

  • Transitional
  • Moms
  • Illegal aliens

Transitional is a wide range of people. They set out to do it only for a period of time. Think high school students, college students, laid off factory workers and the like. A token few will take a liking to it but it will be only a token few.

Moms tends to be moms with small children or a kid in college. They may be single or not. Many times it is a second job when the need is financial.

Illegal aliens is a time honored tradition in the restaurant industry. Mostly paid in cash to keep things off-books if they don’t have fake papers that will pass inspection. Let’s be honest, we’ve all known this. When someone sealed off the border, that labor stream mostly dried up.

Let us also keep in mind that most of you are assholes in a restaurant. You come in there with a sense of entitlement. You want everyone to kiss your ass just proper and if even one thing is wrong you don’t tip. Not only that, you’re rude and expect the server to stand there just taking it.

I wish I had time to search for the links to the ABC 7 news stories interviewing servers when eating places first got to re-open to partial capacity. Patrons respected them, they tipped well, some were even called heroes. Less than two weeks later they ran another story interviewing servers who said people were right back to being assholes. Refusing to wear masks, socially distance, or respect anyone in the place.

Traditional Wages

How many of you knew there is a different (mostly lower) “tipped minimum wage?” Well, there is. In some states it is even under $3/hr. Check the wages in the link. Theoretically the employer is supposed to make up the difference if a worker doesn’t manage to make actual minimum wage for the time worked. The vast majority don’t. You will find servers fighting for Thursday, Friday, and Saturday night shifts because that is when people go out, get drunk, and tip. Unless you are in a trendy tourist trap type place, Monday and Wednesday afternoon aren’t going to be profitable shifts.

Illinois finally raised its tipped minimum wage to $6.60 this year. As you can see in that link many states have it under $3. Let’s assume you work 40-60 hours per week and you are stuck with the sucky shifts when nobody is in the place. If you end up averaging out to $3/hr then you earn $6,000 for a standard 2000 hour year. Yes, you work around food all day and you are on food stamps. You are also on Medicaid or some other state/federal healthcare that is free to you. If you live in a GOP dumb-ass state that didn’t expand Medicaid you most likely rely on charity care.

Pandemic Options

The pandemic changed the economy forever. You just aren’t going to find U.S. citizens working for under $3/hr plus tips. Not going to happen. Every major big box and supermarket chain added Curbside Pickup. This meant they had to hire more “essential workers.”

Kroger starting pay ranges from $7-$11/hr.

Walmart raised starting pay to $12/hr in 500 stores.

Instacart shoppers earn $12-$17/hr.

According to Glassdoor, food delivery drivers make as little as $21K and as much as $79K with many in the $40K range.

So, if you have only a high school education, you can wait tables, potentially for less than $3/hr plus tips, or you can stock shelves for $7-$12/hr. How difficult is that choice?

Even here in Illinois where they boosted the tipped minimum to $6.60 you still have to kiss people’s ass and tolerate them being rude to you hoping to get tips. You can do that, or you can stock shelves for about the same money and lots fewer rude people.

Only a fool would believe curbside pickup and food delivery will go away post-pandemic

Americans have been living this way for over a year, they’ve gotten used to it. Big box stores have been trying to get us to use those self-checkout lanes for years and most of us refuse. With curbside pickup, they kinda win. We have to place the order online and pay for it. They still have to hire people to pick and pack the stuff, but they have fewer people handing money. Theoretically they should also have less theft.

Self checkout hasn’t worked the way they wanted anyway.

No people, retailers have had a year to figure out what J.C. Penny has known for decades. Customers like to have an item ready for pickup at the store. What J.C. Penny never learned was that people hate standing in line for over two hours to pick up a shirt. Grocers have figured out how to do it quick. I imagine ice cream and other frozen food items helped them figure it out.

Food delivery has been sputtering along for years now. When I’m traveling for work I use it until I get used to an area. Even then I still use it some. You’ve all heard of Grubhub, DoorDash, and the like even if you’ve never used them. My issue was it was usually really expensive and much of the time food arrived incredibly late or not at all.

Pandemic forced food delivery to figure it out. While there will be some natural ebb and flow in the customer base, for all of the major cities this is hear to stay.

Rideshare will figure it out too

Uber has had its share of bad press. Lyft I know less about. If they really go to all self-driving vehicles I think there businesses will go under. There were stories about how rideshare drivers were devastated during the pandemic, then suddenly there was Ubereats and many could still drive. I imagine Lyft has either come up with something similar or is desperately working on it.

Will any of today’s big names survive? Probably not. In a consumer oriented business you eventually piss off enough consumers and they quit doing business with you. Ultimately you go out of business.

Will food delivery service still be big in ten years? You bet! Culturally we are way past “only the pizza place does delivery.” Food delivery used to be something you found only in the mega-cities like New York or Chicago. Now it is even in the small to medium sized cities. Rideshare drivers are even working in rural America. There was always some level of need, just no service.

Where did your food service labor go?

  • Many of the real go-getters went and got one of these better paying jobs that popped up during the pandemic. Post-pandemic many of them will have those jobs.
  • Many had their vehicle repossessed. You see, we had an Imbecile-in-Chief denying the pandemic was happening while states were having to shut down and it took a very long time before enough fire was lit under Congress’s collective ass to do something. People who lived paycheck to paycheck got in real financial trouble.
  • Many no longer have daycare options. Some grandparents can’t risk being around non-vaccinated grandchildren. People with compromised immune systems don’t get the same benefit from a vaccine as “normal” people. Some daycare places won’t be able to re-open because they don’t exist anymore. Dig through World News Tonight stories from early in the pandemic when things were shutting down. You will find a woman who ran a daycare center from a rented house being evicted because she couldn’t pay the rent. She had nowhere to go when interviewed and her stuff was just out on the curb. Imbecile-in-Chief made her a homeless person. Moscow Mitch helped him do it.

No you know what happened to the trucking students

Even if every truck driving school opened today, their class size is going to be small. The old woman evicted from the home where she used to run daycare won’t pass the physical (most likely) even if a trucking company offers to pay for the school. The bus boys and dishwashers that turned 21 and suddenly wanted a better life are mostly making $11/hr or more at one of those jobs the pandemic provided. Those jobs won’t get shut down with the next pandemic either. They simply don’t exist for the trucking companies to lure.

Summary

Sure, I’m sure the Trump Nazi Party can find one, perhaps ten, unemployed people who are riding the benefits gravy train. It’s not the majority of them though. The people who had bills to pay left the decimated food services and hospitality industry jobs for these (in many cases better paying) pandemic proof jobs. They are not coming back.

Yes, I’ve met people working at higher end chains like Landry’s Club who have a high school diploma and the ability to kiss ass well claiming to make $80K/yr. They most likely sat on their ass until that job or one just like it opened. If you are a server in a place where the cheap bottle of Chardonnay is $35, you can do well on tips. There aren’t that many such places nor are there that many people who can afford to frequent them on a regular basis.

When your biggest selling item is a $1.99 Grand Slam breakfast

even a 20% tipper isn’t going to be leaving much. When you have five tables all ordering a $35 bottle of wine, a $45 steak, and a $40 seafood plate, a 10% tip gets you $12 and if you can turn all five tables each hour that is $60/hr from 5:30-9:30 on a good night. Those people most likely held out for the good places to re-open. Nobody can blame them. Nobody can blame them if they are still waiting because their place hasn’t opened yet.

Trucking companies and trucking schools have to find another beat down labor market to mine. For a long time I thought they would mine the meat packing plants because that’s a job most people can’t do. Then I saw what the average pay is.

Despite what the Trump Nazi Party keeps saying, the extra federal money isn’t keeping people from returning to food services or entering truck driving. Most moved on from food services because better opportunities came up during the pandemic. The lived the American Dream by working hard and bettering their lives.

Until truck driving finds another beaten down industry to mine labor from, it will have to hope the country reopens fast and burns an awful lot of people out so they give truck driving a try.

Edit: 2021-06-22

The Washington post and others are reporting retail workers quitting jobs in droves. As I have said before in this series, The Bottom Moved.

I don’t know where all of those retail workers went, but I know IT has had a dirty little human trafficking secret for many years. People smuggled in on any visa and sometimes no visa, then billed out to clients all too willing to pay. It is modern day slavery. Seemingly every Labor Day we talk about the minimum wage. A decade ago I wrote a post explaining how to end the recession in 18 months without spending any taxpayer money. A big part of that was turning off the visa spigot so companies couldn’t Disney their IT workers.

This my dear reader has happened. The spigot has been slowly closing. India based consulting firms as well as American consulting firms with significant India presence (think Cap Gemini) has been having their visa applications denied. You see, there is a loophole in the Visa law that lets companies pay visa workers as little as $60K. Large contracting firms scoop up as many visa workers as they can get, pay them as little as $60K and bill them out at $60-$100+/hr. The big tech companies have been favoring visa workers for a long time.

https://www.justice.gov/opa/pr/justice-department-files-lawsuit-against-facebook-discriminating-against-us-workers

Some will even have the worker bring over a spouse that isn’t legally allowed to work and then send that spouse out billing. If you dig through the court records you will find one of the big Indian firms was convicted of this. They tried to hide the fact they were doing it by paying the spouse in India. All of the big tech firms are engaged in this, that’s why they started this lawsuit.

https://www.cnbc.com/2021/05/14/google-leads-court-filing-supporting-tens-of-thousands-of-us-visa-holders-ability-to-work.html

Microsoft even created a tool to make it easier for immigrant IT workers to navigate the visa process so they could become low wage workers in America.

Well, with the spigot being cranked shut, Indian firms have had to shift their model to training new IT workers that have no experience and in most/many cases no degree. They’ve created slave factories. You get a minimal amount of training in some Web or scripting language then are set out doing billable work at clients.

https://revature.com

Now, I’m all for someone being able to better themselves, as long as they understand what they are getting. You aren’t getting a degree. You aren’t getting a grounding in the fundamentals of IT that would come from a good accredited college. You are a little better than self-taught when you finish whatever training you get from firms like this. You also have to sign on for some number of years and I imagine there is a stick with that carrot.

Yes, you could be trapped. You could end up with not enough skills to ever leave. You could also either get just enough skills to get out or get offered full time employee status by one of their customers. It’s a dice toss.

Who would take such a dice toss? Well, for starters, someone who has been making $15/hr or less stocking shelves and picking groceries. You see, $60K may be less than 1/3 of market rate for degree holding IT professionals, but it is roughly twice what someone stocking shelves was making. Not only that, there is little to know physical labor.

Some, perhaps most, of the food services people went to stocking shelves and picking groceries during the pandemic. They worked just as hard, had fewer people bitching at them, and earned more money. Now they and those who were originally stocking shelves have started migrating to this better low wage gig.

You will find some companies smart enough to figure all of this out. They aren’t run by Keller (or any other for-profit diploma mill) MBAs. JK Moving pays long distance drivers $100,000/yr now. They figured it out. If you want skill, you have to pay for it.

Let me be very blunt here, driving an 18-wheeler with a load, or worse yet light load, is a skill. That cross wind you only find annoying in your car can flip a van trailer if you don’t know how to drive in it. Stopping also isn’t “just mash on the brake” like a car. You have to downshift through all of those gears because 50% of your stopping power is the engine. Slightly more if you have a Jake Brake you can kick wide open. Adding insult to injury you can never smoke Mary Jane even if it’s legal in your state because it could show up in your pee test and cost you that all important medical card.

Companies who do not realize the bottom has moved will simply go out of business.

Congress will continue to shut down the spigot that has flooded America with low wage foreign IT workers, forcing those companies to train the bottom of our labor market to be low wage IT workers who just happen to be U.S. citizens.

I wasn’t wrong a decade ago. It just took y’all time to figure it out.

<< Part 2

Leave a reply