Friday, May 21, 2021

Unemployment Subsidies Maybe Not Such A Bad Idea After All

WEST COAST        

Opinion by:
E. Eugene Webb PhD 

As the percentage of vaccinations increases and the country begins to open, it would appear that things are slowly returning to normal.

One of the most interesting side effects of the pandemic has been the effect on employment in the hospitality industry.

News media reports are full of almost teary-eyed restaurateurs and small shop owners who constantly lament that they cannot hire the employees they need to serve their returning customer base.

Almost all, blame the unemployment subsidies from the federal government as, “Paying people for sitting at home doing nothing.”

On the other hand, there are also growing reports that many of those formerly in the hospitality industry have been recruited by retail an industrial organizations offering higher wages, benefits and more job stability.

It seems to me, that the Democrats and the Biden administration may have finally hit on the solution to the redistribution of wealth.

Rather than a bunch of new taxes, let's just keep paying these employment benefits until the hospitality industry recognizes the fact that they are going to have to change their business model, pay a living wage and provide their employees with a significant benefit structure if they're going to compete with the rest of the economy in the employment market.

Here's a suggestion for the owners of bars, restaurants, craft breweries, small and medium-size shops. It may be time to think about redoing your business model.

In the restaurant business, if you own a restaurant employed 40 or 50 people, many of them servers, that you probably pay somewhere between $2 and $3 an hour, and they make the rest of their money on tips while you take a substantial wage out of your business it may be time to consider sharing the wealth.

Maybe it is time to trade that Lexus or Land Rover sitting out back for something a little more cost-effective and consider paying your servers at least minimum wage along with a benefit package.

I can hear the wails and cry even as I speak. I would have to raise my prices.

Yes, you would.

How do I know my customers would continue to patronize my establishment?

Actually, you don't.

But here's a thought. Restructure your business, hire some quality people, raise your prices put a note on your menu and a sign in your establishment that tipping is not expected but appreciated and see what happens.

You might just be surprised.

If you're a server or someone who works on tips in the hospitality or food service industry, I've changed my view of all this, and I think you should just sit there and wait until the unemployment subsidy runs out at the very least and help motivate those who make substantial incomes by owning these businesses to share the wealth.

It seems all of this may just be an unintended consequence of our attempts to deal with the coronavirus pandemic, but in the long run this unintended consequence may just turn out to be a good thing.

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