A few days ago the Washington Post ran a piece about the Great Resignation that focused on Hinesville, Georgia. It was based on extensive interviewing that tried to get to the bottom of how the GR was hurting Hinesville businesses and the community in general. However, it left me puzzled. Once you plow carefully through everything, it turns out there are basically three problems.
First off, Hinesville has seen a big increase in good-paying warehouse jobs, so people have been leaving crummy minimum wage jobs to go work in a warehouse. But this started at least five years ago and has been ongoing ever since. It has nothing to do with the pandemic.
Second, some people—it's unclear how many—have decided to leave the workforce and subsist on government benefits. However, as time goes by and savings dry up, more and more of them are returning to work. If my arithmetic is correct, practically all of them have returned by now:
As of October, the participation rate in Liberty County is the highest it's been in the past decade. There's hardly anyone staying home just to collect government bennies. (At least, no more than usual.)
Finally, there are supposedly a lot of people who quit working at restaurants during the pandemic and have never come back. But that's entirely contrary to this chart:
If this is accurate, employment in restaurants has been growing for years. It fell a small bit at the start of the pandemic, but then rebounded and has been growing at its usual rate ever since. There's no apparent lack of workers.
As best I can tell, the only actual problem in Hinesville is that "mom and pop" restaurants say they can't afford to raise wages the way national fast food franchises can. But this is never explained. If a local McDonald's can afford to raise its wages, why can't a local pizza joint? They both have similar cost structures and they're both competing for the same customers. And local franchises are on their own, just like the mom-and-pop places. It's not as if the national corporation bails them out if they're losing money.
I don't doubt that everyone quoted in the piece is talking honestly, but the only serious problem seems to be the fact that mom-and-pop shops feel that they can't raise wages enough to attract workers. But is this true? Or could they go ahead and do it because everyone else has to do it too? If everyone has to raise wages, after all, the competitive landscape doesn't change much.
Maybe there's something here I'm missing. But one thing is for sure: all the problems supposedly related to the Great Resignation just don't pan out. Whatever problems Hinesville is suffering, they have entirely different sources.
There's more dishonesty in that article.
Elsewhere in the article, people are quoted arguing that they can't pay $15/hr, and yet, the per capita income is $22k/yr (== $11/hr) -- so many, many are making less than that. It's all pretty damn dishonest, and is par for the course these days from WaPo.
Which is why I canceled my subscription. I don't need to pay money to be gaslit.
That 22K/yr per capita income isn't only adults - it includes children.
Also, you can't just straight up divide by 2000 to get an hourly rate. Full time waged workers work closer to sub-32 hours per week than 40, because that's a distinctive benefits-required line.
Time will tell where the truth lies, but we can all agree it means the Biden presidency is in big trouble.
BTW it's flawed reasoning to ask "If a local McDonald's can afford to raise its wages, why can't a local pizza joint? They both have similar cost structures and they're both competing for the same customers." The fast food chains devote vast resources to cost-minimisation measures that small businesses cannot match. The latter tend to appeal to customers who are turned off by the industrialised mass production of the chains.
Nope. Your not paying attention.
That's clever. Did you get that from one of those "are you paying attention yet" memes?
I can tell you it is disruptive in my little corner of the high-tech, VC-funded world. I know several startups having substantially more trouble than usual finding what should be fairly easy people to find at prices they can afford.
I mean, nobody should care about this, it is a tiny, already-overpaid group of people running companies that don't do anything yet. But I can imagine similar problems in other markets with relatively thin talent pools.
Fannie Lou Brewton, who was a cook in one of the restaurants, quit and wouldn't come back even though she was offered a raise to $9/hr. She is 71. This is a terrible hardship for the employer - people should work until they're 90 for peanut wages.
You're being too kind to your colleagues in the press. To my mind, the Great Resignation, just like Runaway Inflation, is a "hot topic" that must be covered extensively and never questioned, because . . . well, because it's a "hot topic." And it also helps the mainstream media argue, yet again, that they are just as tough on Biden as they were on trump.
It’s just business whining about seeing the sharp end of the free market. This is only a problem for businesses, as in the article, that won’t raise wages and improve working conditions.
Exactly.
Pretty much this. My guess is that inasmuch as there is anything going on, it is the higher paid warehouse jobs and this has been going on for years, but now is crammed into the prevailing narrative.
GR is bullshit. All these freemarketeers wondering why the shelves are empty when price controls are in place. Raise wages you nonces! Improve working conditions! The market will clear:
Any market forces that helps labor must be denounced as socialism!
"If a local McDonald's can afford to raise its wages, why can't a local pizza joint? They both have similar cost structures and they're both competing for the same customers. And local franchises are on their own, just like the mom-and-pop places. It's not as if the national corporation bails them out if they're losing money."
Well, except that national chains have access to some level of infrastructure support from the franchising corporation even if they're independent franchisees. And if they're not franchisees, but affiliated locations... due to economies of scale, they absolutely CAN afford to do things that local mom-and-pops can't.
But to the point of the "great resignation" and this post, the "GR" doesn't really apply to waged work. It's about white collar work, and people realizing that their working arrangements are bullshit to some degree beyond what they're willing to tolerate for the money that they're being paid.
The best way to get more money in the white collar world was already to change jobs and then watch your old company hire your replacement for a better deal than you were getting. The pandemic just highlighted how crappy so many white collar working arrangements were.
See also: the "return to work" propaganda bullshit.
Mom and Pop probably pay more for food and supplies than the National chains. Volume …
Not necessarily. Most mom/pops are debt based illusions of credit expansion. Liquidation in a free market sense would destroy most of them. Let's remember what 2008 could have really done.
But they have always paid more for food than the national chains, even when the price for labor was lower. They can probably raise both wages and prices a bit and not lose much, if any, business, especially if they have a liquor license.
Great Resignation or Great (early?) Retirement....
https://www.forbes.com/sites/avivahwittenbergcox/2021/11/16/the-great-resignationactually-a-mass-retirement/?sh=384aed6e18ba
OM??? I actually agree with this guy. There is nothing to see here. It's hype and distorted government stats from 2020. My guess in 2022 retirements decline notably.
Let's don't get lazy people.
Lets also remember 2022 will see a sharp slowdown in hiring. Once the unemployment rate hits 4%, a national recovery it is. Patience fools.
"Hinesville, Georgia", yeah. It's always some backwater, Trump Country burg that the big eastcoast reporters have to go to. Because that's where the only REAL Americans live. Not in cities. Not in suburbs (whatever those are). And interview people who hang around for hours in "diners."
Is this article representative of the entire country? Sure doesn't seem like it.
+1
Trump?? Let it go.
It's pretty simple -- small mom-n-pop restaurants and stores are usually run as simple pass-through/SP businesses and raising wages means reducing the owner's own income. They've gotten used to a certain profit margin and income and are simply reluctant to reduce it to attract qualified workers. I get that -- no-one wants to give themselves a pay cut, but if you can grow the business by staffing it properly right now, you're bound to be in better shape in a year or two.
I'll add regarding the ability of small businesses, esp coffee shops and the like to just raise prices: it's not merely a matter of what the competition is doing or not doing. At a certain point, if a cup of coffee and some eggs and hashbrowns gets too expensive, people just won't go out to breakfast any more. A lot of the small eateries in my neighborhood, for example, are sustained by older people on a fixed income who spend what little disposable income they have enjoying a small meal out a couple times a week to get out of the house, and if prices to up, they'll just stop going out. So I do have some sympathy with small restaurant owners, particularly in poorer, rural areas, who can't just offer all their employees $20/hr. and pass the added costs on to their customers.
Must have been hard in the late 90's as well
The unfortunate fact is that a lot of these small businesses can't afford to exist if they can't pay poverty wages to the help.
Long term trend, the big boxes hollowed out small town downtowns and now the big boxes are in trouble from the internet, mostly Amazon.
Prior to the post-70's de-industrialization in many cities around the US, minimum-wage jobs at small restaurants or fast food joints were for high-schoolers, college students, and young, single people looking for a little extra spending money or cash to pay for school. They were a labor pool you didn't have to pay a ton to get because they didn't need a full-time income. Grown-ups with families to support had jobs at the local mill or factory, or retail outlets like Sears that paid decent wages with good pensions and benefits. Then those jobs disappeared, college costs skyrocketed, and suddenly you have a whole class of workers dependent on crappy, low-paying jobs to support families and pay for school. Wealth creation in America accrued almost entirely to the investor class and everyone else was left behind with a bunch debt and $9/hr jobs as far as the eye can see. That's the fault of the Republican Party and globalization, not some local diner owner.
Mom and Pop contribution to the GDP?
Mom and Pop numbers employed?
Our here in the Gamma Quadrant local businesses are great. They know they can't be assholes as the word gets around at the speed of the internet.
When I get some special treatment from one I post a rave on the local net.
To the degree this is a real thing I'd guess it's driven by some niche white collar businesses that have the ear of editors and news producers, and little else.