I found Carly Olson’s piece in the LA Times a study in conflicts. While I agree with her that not enough good jobs are being created by the U. S. economy:
A labor shortage implies there aren’t enough available workers to fill open jobs, but this is not the case nationally, or in California. National unemployment in June was 5.9%, up from 5.8% in May, in part because the number of people looking for jobs grew, according to data from the Labor Department on Friday. California’s unemployment is tracking higher, at 7.9% in May.
Millions of Americans are seeking work, and the Labor Department is reporting the highest number of advertised job openings in 20 years of data. Friday’s jobs report indicated the hiring crunch might be starting to ease: U.S. employers added 850,000 jobs in June, the biggest gain in 10 months.
Economists say it’s only a matter of time before open roles are filled, and the least desirable jobs with the lowest pay and benefits will be the last to go. They don’t see the job market as a sign of shifting economic forces unleashed by the pandemic, or of a workforce made comfortable or lazy by stimulus payments.
“Nothing about this is going to be permanent,†said Heidi Shierholz, a senior economist at the left-leaning Economic Policy Institute.
Yet some trends are emerging clearly. The struggle to fill jobs is hitting smaller businesses disproportionately. Workers may be in a prime position to secure better conditions and pay, but without changes at the federal level, economists said the gains will be short-lived — and white-collar workers may gain the most, entrenching inequality.
Nearly all the jobs she mentions are in the hospitality sector. How does she expect jobs with practically no qualifications and zero cost of entry to be “good jobs”?
I think there’s a kernel of truth in the “skills mismatch” hypothesis and I think it’s even more true that the the jobs on offer aren’t necessarily where the workers are. There’s enormous variance across the country in unemployment—well into double digits in some places in California while in the low single digits in Utah, Idaho, and elsewhere.
But the fast food jobs she cites have a special problem. The entire sector grew up in response to an enormous spike in the number of entry-level workers entering the market in the 1960s and it’s been dependent on entry-level workers ever since. 60 years ago those entry-level workers were Baby Boomers who had just entered their teens. Now they are largely immigrants.
In my state, I noticed that McDonalds and several other fast food chains have not reopened their dining rooms despite the governor lifting all restrictions as of 6/30. At another casual dining restaurant, waiters don’t give out menus or do payments anymore. You are directed to websites/apps with a QR code taped to the table.
At this point, I suspect many fast food restaurants are going to become drive-thru only. Combined with encouraging people to order/pay through apps, fewer “front-end” workers will be needed.
With these changes, I suspect fast food restaurants can pay higher wages to the remaining workers; a textbook example productivity improvement.
Its a tradeoff — a higher, more sustainable wage for those working in the industry, but fewer workers will be required.
“The entire sector grew up in response to an enormous spike in the number of entry-level workers entering the market in the 1960s and it’s been dependent on entry-level workers ever since.”
I’ve seen you make that comment before, but have never seen any other citation. Rather, it happened the other way around. Disposable income increases, women entering the workforce, time constraints, the car culture etc all aligned to create demand for fast food. Fast food then just utilized teen labor.
Similarly, the Starbucks of the world didn’t grow because there were so many unemployable recent college grads with philosophy majors. Rather, they were able to employ these available people in response to the gourmet coffee and foo-foo drink craze.
Basically, you’re off by a decade. Women entering the workforce in large numbers largely took place after 1970 and was a consequence of declining household incomes. By 1960 McDonalds had already sold 100 million burgers. I’m still trying to dig out the number of stores by year but it’s pretty obvious that the 1960s was its growth year.
You are trying to dig yourself out on a timing technicality, Dave.
Did labor availability drive growth, or demand?
I know of no industries that were formed and driven by labor availability. It all starts with demand. Labor availability can only retard growth because of unavailability. Uh, like now.
Both “demand creates supply” and “supply creates demand” (Say’s Law) are true in some cases.
I think it’s patently obvious that fast food grew up in a very narrow niche, dependent on low cost and plentiful labor which was the case when the Baby Boomers started coming into the labor market without any experience and continuing, largely through immigrant labor. If you raised the prices so you no longer got “Change Back From Your Dollar” as was McDonald’s old slogan, there would have been no niche. That niche should close now. It’s just too expensive now to educate the immigrants’ children, pay for their healthcare, and provide pensions for them.