Skip to main content

The unemployment rate is going down and the minimum wage is on the rise --- A blessing or a curse?

Image
By
Impeccable service can only be delivered by a well-trained, friendly staff. Accordingly, the service industry is labor-intensive and employs a large number of skilled and unskilled workers.
The recent employment report released by the U.S. Bureau of Labor Statistics also suggests that food services and drinking places (or restaurants), professional and business services, and healthcare are the three key sectors that contribute to the employment growth in July.
Yet, what may seem to be an exciting update for the labor market turns out to be concerning.Some critics pointed out that the job market was unhealthy because "too many" people were working in restaurants (the number increased by 53,000 in July 2017). The leisure and hospitality industry, which includes restaurants, added 62,000 jobs in July and a total of 313,000 over the year.

What are the concerns?

  • Restaurant jobs are growing at a faster pace than healthcare, manufacturing or construction jobs.
  • For decades, restaurants have remained labor-intensive, with few improvements over time.
  • Most restaurant workers are earning low incomes, usually at the minimum wage or about 50 percent of the national average.
  • Both ends of the restaurant industry, meaning either the quick-service or high-end restaurants, are still growing and performing well, but casual-dining family restaurants are facing challenges.

Is raising the minimum wage a remedy?

One may argue that these concerns are the result of the wages of restaurant or hotel workers being too low. Once the minimum wage increases, there would be no more concerns.
In fact, raising the minimum wage may also result in another outcome — it can possibly have a ripple effect in which everyone, including those who are making above the minimum wage, will get a raise. The gap between minimum wage and the national average would probably remain unchanged (if not become bigger).
However, prices are going to increase as employers pass the higher labor costs to consumers. In some rare and extreme cases, restaurants have explicitly added a "minimum wage" fee to the bills.
In the end, the increase of minimum wage is unlikely to help those living on a minimum wage to save more or improve their quality of life. What we discussed here can explain why places like Birmingham, Cleveland, St. Louis and Illinois freeze or even lower the minimum wage.

Then, is increasing the minimum wage still a good thing?

Yes, it could be. Increasing the minimum wage can push businesses to find ways to lower the operation costs through innovations. We have recently observed many innovative changes in the hospitality industry. To name a few examples:
  • A restaurant with no hosts, no waiters, and no tables
  • Robots that can cook in a kitchen or make coffees
  • Servers being replaced by self-ordering kiosks
  • Robots that can deliver food inside a building or out on the street
  • Robots that can provide butler service in a hotel
  • Automatic drink dispensers
  • Personal assistants who are also robots
  • Cars that can drive themselves
  • Robots that can pick up and pack online orders

What does the future hold?

By 2025, the hospitality industry is expected to go through some transformational changes due to the advancement of new technologies. Moreover, as the cities we are living in are getting "smarter," businesses are getting up to speed, too.
Now, here leaves the question that we all need to think about: What can we do to avoid being replaced by machines at work?
Note: This article was also published at MultiBriefs.com - the leading source for targeted, industry-specific news briefs. The picture was downloaded from Florida Restaurant Law - A Blog. 
Labels:

Comments

Post a Comment

Popular posts from this blog

Is It OK for Hotel Staff to Wear Piercings and Tattoos?

By
Time has changed. I see more and more college students wearing piercings and tattoos nowadays, but is it OK for hotel staff to wear piercings and tattoos? The answer is “no, no, no.” According a report at USAToday.com, customers across the board do not want to see any hotel workers with pierced eyebrow, pierced tongue, tattooed arm, or nose ring. Some may argue that tattooed and pierced workers may seem more acceptable in edgy boutique hotels as compared to the big franchised hotels, but the survey results did not find any differences among a variety of lodging products. Many respondents believe people who wear visible tattoos and piercings are taking a high risk of their professional lives. If you stay in a hotel, do you mind being served by tattooed and/or pierced staff? What if you are the one who makes the hiring decision? References: USAToday.com: http://tinyurl.com/linchikwok08042010 Picture was downloaded from http://tinyurl.com/linchikwok08042010P
28 comments
Read more

Where Coffee Meets Culture: My Experience with Orientation, Socialization, and Culture at Dutch Bros (by Karina Martinez)

By
When people think of Dutch Bros, they usually picture colorful drinks, loud music, free stickers, and baristas so friendly they’ll jump in the car with you.  As someone who has had the opportunity to work for Dutch Bros, I can say that the energy customers feel isn’t an act; it is the result of intentional and effective HR practices that are focused on orientation, socialization, and culture. From your very first day, you experience how these practices shape the entire Dutch experience.  Orientation, Socialization, Culture   In HR management, orientation is the introduction of the role and company to new hires. This is intended to help them feel welcomed and informed. Socialization goes beyond the initial training process; it’s how new hires grasp the organization’s values, behaviors, and traditions over time. Together, these fun...
5 comments
Read more

Average/Below-Average Looking People Can Earn as Much as the Attractive Ones

By
Research has shown that attractive people can not only charm interviewers (and thus get hired easier), they are also more likely to earn more as compared to those with average or below-average looks. Accordingly to a Wall Street Journal report , attractive people can earn 3% - 4% more than a person with below-average look. If such difference adds up over a person’s lifetime, an attractive person can earn up to $230,000 more than an ugly worker; even an average-looking person can make $140,000 more. Another relevant Wall Street Journal report also suggests that workers who exercise regularly can earn 9% more than those who do not. If that is the fact (I believe it is), is it legal? Can employers do that? Linchi Kwok and Otto @SyracuseU Career Fair To my knowledge, no law or regulation under EEOC (Equal Employment Opportunity Commission) considers a person’s look as a protective class. It is true that people in general have an idea of what kind of person they feel attract...
33 comments
Read more