Skip to main content

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

Impeccable service can only be delivered by a well-trained, friendly staffAccordingly, 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 BirminghamClevelandSt. 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

Comments

Popular posts from this blog

Luxury vs. Millennials and Their Technology: The Ritz-Carlton (By Julia Shorr)

Embodying the finest luxury experience, The Ritz-Carlton Hotel Company, LLC has been established since 1983. In 1998, Marriott International purchased the brand offering it more opportunity for growth while being independently owned and operated. They are known for their enhanced service level as the motto states, “Ladies and Gentlemen serving Ladies and Gentlemen”. The luxury brand now carries 97 hotels and resorts internationally and is attempting to keep the aspects of luxury while keeping up with the trends of the technologically improving generations. The Varying Demographics of the Target Market The Ritz-Carlton’s typical target market includes: business executives, corporate, leisure travelers, typically middle-aged persons and elders, and families from the upper and upper-middle class section of society .   This infers a large range of types of travelers in which all are similar in that they are not opposed to spending extra for the luxurious ambiance. However, with

How to choose the best credit cards for travel (By David Mai)

  Traveling in a Post-Pandemic World If there was one thing the pandemic taught us, it was that everybody became hesitant and unwilling to travel. Shaver (2020) of The Washington Post shared an interesting tidbit in which Americans were actually staying home less during the pandemic, according to research that tracks users' smartphone data.  The quarantine fatigue affected nearly everyone who lived an active lifestyle or loved to be out and about in the world. It was simply not a safe time, and too many regulations were in place that deterred consumers from traveling for leisure. Consequently, the COVID-19 pandemic significantly impacted the travel and hospitality industry. Yet, there is no doubt that people will yearn to travel again when the pandemic is fully lifted. Around this same time, credit card companies have developed unique ways to retain business with consumers who look to maximize rewards and benefits for their journey. A Little Preparation Goes a Long Way      

Yammer: A Social Networking Site Exclusively for the Workplace

Effective internal communications among employees are related to some desirable organizational outcomes, such as robust morale, a clear vision, low turnover, and high employee engagement. The question is what platform can serve the purpose. This ABC News video introduces “ Yammer ,” an exclusive internal communication tool for companies. A user must use a valid company e-mail address to sign up for an account. Once an account is validated, the user will be led to the company page that is pretty much like a Facebook page. The difference is that only the users whose e-mail addresses share the same domain can see the wall and communicate with each other. I have no question about whether Yammer could be a useful internal communication tool for companies, but I just wonder: how many social networking sites do people need for communication? Why people have to “create” so many platforms or channels for “effective communications”? To many people, Facebook is only for “friends,” whe