I want you to sit down. Then I want you to hang with me as I explain this impossible argument. What if….now get on that fainting couch….we solved the worker shortage in low-wage jobs by….wait for it…paying them more money! Unpossible! Or is it?
The owners of Klavon’s Ice Cream Parlor had hit a wall.
For months, the 98-year-old confectionary in Pittsburgh couldn’t find applicants for the open positions it needed to fill ahead of warmer weather and, hopefully, sunnier times for the business after a rough year.
The job posting for scoopers —$7.25 an hour plus tips — did not produce a single application between January and March.
So owner Jacob Hanchar decided to more than doublethe starting wage to $15 an hour, plus tips, “just to see what would happen.”
The shop was suddenly flooded with applications. More than 1,000 piled in over the course of a week.
Well, I’ll be damned.
It’s almost as if there’s thing called “supply and demand” that isn’t just an excuse for employers to repress workers, but rather might actually have a way to attract workers when there is a short supply of them. Huh.
The issue has raised concerns about the strength of the country’s recovery as coronavirus cases abate, with the economy still down more than 7.5 million jobs compared with before the pandemic.
Republicans have blamed enhanced unemployment benefits for the shortage; Democrats and most labor economists say the issue is the result of a complicated mix of factors, including many schools having yet to fully reopen, lingering concerns about workplace safety and other ways the workforce has shifted during the pandemic.
The experience of 12 business operators interviewed by The Washington Post who raised their minimum wage in the last year points to another element of the equation: the central role that pay — specifically a $15-an-hour minimum starting wage — plays in attracting workers right now.
I love this–the shock that, huh, if you pay workers more money, perhaps even enough that they can live a dignified life, they will accept your job. Wow. Who knew.
This also made me chuckle, or perhaps chortle:
For Patrick Whalen, co-owner of the 5th Street Group, comprising five restaurants in Charleston and Charlotte, the breaking point came in late March. The restaurants were getting busier as more people started venturing out to eat. But applicants for the dozens of positions the company was trying to hire for were scarce. Understaffed and busy, the company was starting to get shredded with negative reviews online.
After one of his managers told him that a line cook needed to borrow money to get groceries, Whalen was moved to reconsider wages at the company.
“It was just one of those moments where you just kind of stop and you say, ‘Is there a real problem in our industry?’” he said. “We always kind of knew it was there, but we didn’t really know what to do with it.”
The company raised the starting wagefor all of its staff to $15 an hour, up from $12 to $13. And it created a “tipthe kitchen” program, addinga second line to table checks for gratuity for the back-of-the-house staff, which the restaurant matchesup to $500 per night. That move has increased wages for non-tipped employees such as line cooks and dishwashers to an average of $23.80 an hour, Whalen said.
Applicants began pouring in nearly overnight, Whalen said. A manager at one of his restaurants, Tempest, told him that 10 people walked in to drop off résumés over the course of one week after the policy change, compared with just 15 people over the four previous months.
Within three weeks, the restaurant group went from about 50 to 60 percent staffed to nearly fully staffed.
“There is no one in Charleston or Charlotte that can compete with what my guys are making,” Whalen said.
Aaron Dearing, a sous chef at Whalen’s 5Church Charlotte, said the tipping initiative had raised his pay by about $1,000 a month — the biggest raise he has received in 20 years in the industry.
“It puts everybody in a better position in their home life, so they come to work a lot happier,” he said.
“Look, the market just required that I pay my workers a sub-living wage where they would have to struggle to pay rent and eat. I guess I will acquiesce and pay them more now that I have no choice. And they say they are happier?”
I believe Chamber of Commerce bylaws will require this guy to lower his wages to the minimum wage as soon as possible.
It’s amazing to me how incredibly short-sighted employers are. Every time they discover that something like paying workers a living wage makes for a happy and more productive workforce, no one ever learns a larger lesson. I’m sure no one will learn anything from this either.