In some Bay Area counties, college grads have higher unemployment
mercurynews.com
mercurynews.com
“We’re seeing out-migration of many people from Santa Clara and San Mateo counties, presumably because of the high housing costs,” Benner said. “That out-migration is disproportionately from lower income residents.”
He added that housing costs driving out lower-wage workers “would have become much more pronounced in the last year or two.” Lemus, who said he makes a little more than $30 an hour now, is saving to buy a home — in Arizona, where the cost of living is far lower.
https://techcrunch.com/2014/04/14/sf-housing/ and https://www.bloomberg.com/view/articles/2018-03-14/californi... are relevant and will remain evergreen until we see state-level policy change.
If you could review https://news.ycombinator.com/newsguidelines.html and follow the rules when posting here, we'd be grateful.
I participated in at least one seriously flawed psych study being done so someone could get a degree. I was not impressed.
I find the social stuff really fascinating. I seem to have an innate knack for it and I've taken college classes pertinent to that interest.
But I tend to seek out other types of information when trying to further my interest in understanding how people work. For example, negotiating, parenting and marketing are all areas that require you to understand how people work and are results oriented. You either get results or you don't.
A good test for how solid your hypothesis is: how well does it predict results? This is a general rubric. We know that Einstein's Theory of Relativity is superior to Newtonian gravity because it more accurately predicts planetary positions in the future.
Ability to predict outcomes accurately is fairly strongly tied to performance. So, to my mind, social things that are performance oriented set a higher bar than those that are generally descriptive in nature instead.
Psychology's ability to genuinely reform people with serious mental health issues is notoriously poor. This suggests it probably isn't on especially firm footing.
In addition to the above areas of interest, I also find some harder sciences, such as neurological studies, much more generally useful for understanding social phenomenon than most psych or sociology things I've seen. I've also found books written by primatologists very good.
A person I knew with a psych degree told me once that psych majors are mostly people who don't really understand people and are hoping to get a clue. Sadly, this hit a nerve for me. Some psych majors I've personally known fit that description all too well.
Maybe someday these areas of study will be better than they are currently. But their current state leaves much to be desired.
Uneducated workers are seemingly getting priced out of these counties, making the entire cohort seem like they're better employed (due to the success of the survivors).
If raising wages means that some businesses will lose money then that's a different problem. But it's not a shortage.
Many businesses become uneconomic if labor costs are too high. It's not just that employers don't want to pay more, but that it is customers who don't want to bear the cost of these higher wages. If all baristas were paid $20 an hour in SF, the higher cost of a latte would have a lot of folks switching to Folger's.
So the real issue is what the article brings up, in that housing costs everywhere are so high that it is making lots of businesses uneconomic, and they will continue to be uneconomic unless housing prices fall.
I wonder if $20/hr barista pay really would cause the price to become unreasonable. At $20/hr it's also possible you could interest some slightly better baristas, slightly faster baristas, and who would have longer retention... Also the prices wouldn't necessarily go up uniformly on everything. Lattes might go up $1 but coffee might only go up $0.25 because it doesn't take as much time for the barista to give it to the customer.
This discussion on reddit (https://www.reddit.com/r/barista/comments/2qv2kb/question_ho...) is 1st hand information and says that 2 baristas can make 450 drinks per day in a 7 hour day. That's 225 per barista / 7 hours, 32 drinks per hour.
So if the wage increased to $20/hr (from let's say $10/hr), it would increase the price of drinks by $0.31, which I don't think is enough to cause people to massively switch to instant coffee.
Edit: Labor cost in fast food is typically about 20% and most places would consider that on the high side. Not sure how well that translates to coffee shops, but assuming a 100% increase in cost of labor, prices would go up about 20% to cover that. So a $5 latte becomes $6.
“8-4 shift with 2 other baristas on a 6 group synesso hydra, is 986 coffees. That place averaged around 750 a day.”
986 / 3 people / 8 hours = 41 per hour.
750 / 3 people / 8 hours = 31 per hour.
The average Starbucks sells ~400 cups of coffee a day, but that includes a lot of very low volume locations with less than 3 people.
1) At some point people will stop buying coffee due to its price. Where is that point and how do we find it if it is not the one determined by the cafes and customers as is currently the case? If we can double wages and prices are still 'reasonable', why can't we double them again and again? When do we know we've hit 'reasonable'? Who controls what that word means?
2) You've divided a large number (double wages) by a large number (drinks/hr) and come up with a small number. The maths is fine, but the maths is obscuring the fact that the changes are large. I dunno what you are being charged for a coffee, but $0.31 is ~3% of $10 and that is quite large. Anyone who is on a disciplined budget would buy less coffee if coffee is coming out of their discretionary spending.
The argument here might be that coffee is a tiny percent of someone's expenses, but the issue is that the 'only $0.31' thinking doesn't scale. If a bunch of things rise in price by 3% in real terms, consumers with no savings (ie, most consumers) DO have to cut back on something with mathematical certainty.
The barista making $10 more per hour can go out and buy dozens of coffees of their own, or meals out at restaurants, or movies... It would keep the lower level of the economy moving.
The point is, gp said "it isn't unreasonable" with the implication that nobody would notice (eg, "enough to cause people to massively switch to instant coffee"). That isn't a safe position - it is likely consumers of coffee will have to cut back on something. They would notice.
On your specific point that you think allocating more resources to baristas will help the economy - why not allocate the baristas to doing something more useful, where the market rate for their time is higher than $10? Allocating more to baristas is a lot of things, but it is not an evidence based strategy for increasing the general prosperity. What is it that these baristas lack? Maybe they should be trained to produce that thing, instead of getting handouts or fighting with their employers?
Just in San Jose alone there are over 60 Starbucks stores, plus all the other chains and independent shops. Closing a few won't have much impact.
Tell that to the employees who rely on those jobs to pay rent. I'm sure they will have a hard time understanding how being forced out of a job is good because some guy online said it could increase someone else's salary.
> Just in San Jose alone there are over 60 Starbucks stores, plus all the other chains and independent shops. Closing a few won't have much impact.
I'm pretty sure the people depending on those shops to make a living would be affected by your blend of altruism.
I do think we should increase unemployment insurance payments so that impacted workers have more time to find new jobs.
Your strawman doesn't have any relation with the issue being discussed.
You original argument was that increasing production costs in a sector to a point that would bankrupt some employers and force their employees out of a job wouldn't be a bad thing if that meant other employees within the sector could get raises. We're not talking about protectionism. We're discussing the implications of your proposal and how it would affect workers within the sector by forcing them out of a job.
Forcing those workers out of a job has a significant impact on their livelihood, and as it was already the best option they had then those who would have lost their job would not be better off in any way or form.
Closing a few won't have much impact.
Perhaps their business is not viable? If people aren't willing to buy their product without having employees pushed into below-sustenance wages, i'd question the business and product, not manufacture some story about labor shortages.
When I did a project with Apple in the 90s I often stayed late during my stay and got to chat with some of the cleaners that came in. A lot of them had bus rides of 2-3 hours each way every day to get to their job.
[1] I'm pretty sure I'm remembering part of this incorrectly, because us FTEs were supposed to badge in too to avoid non-Googlers from riding.
Or when some external force artificially constraints the supply by limiting trade (or immigration for workers).
Well, sure, shortage requires that the quantity demanded exceeds quantity supplied at all possible prices, which implies (barring some external constraint preventing trades) that the maximum quantity producible should be produced and sold, with no idle capacity.
Genuine shortages are unusual.
> That's a non-standard interpretation of the word.
It's the standard use is market economics. It's true that that in non-technical use, a common (and perhaps the most common) use of “shortage” is “higher market clearing price than I would prefer”.
It's just important to be clear what sense of “shortage” one is referring to. Because very often the latter sense is in play, but given the significance of the former.
The article claims that employment offices do not have enough job seekers to fill the roles. If true, this would suggest a shortage, and an Econ 101 notion of supply-and-demand that disregards time isn't evidence to the contrary.
> If employers want more workers then they can just pay more, or offer better working conditions.
This is irrelevant. For example, if low-wage or middle-wage workers have left the area, and the remaining workers have full employment, this would cause a shortage at the present time. Raising wages may attract new workers to move to the area over time, but until that happens, there will be a shortage.
I'd say the later. There is no such thing as a shortage without the context of a price. Otherwise, anyone can manufacture shortages.
There is a shortage of homes for $75,000 in the bay area. There is a shortage of people willing to deliver fresh coffee to my doorstep for $1. Pretty easy..
If you don't believe me then post a help wanted ad with a >$50 hourly wage for unskilled work and watch the applications roll in.
This proves nothing. For example, if a >$50 hourly wage is well above market rate, it may lead currently-employed people to apply. If they leave their current job to take your offer, then you've just shifted the job vacancy from one employer to another. This is clearly not evidence that a labor shortage does or does not exist.
A better indicator is employment-population ratio[1] which has recovered since the drop in 2008.
It's 63% nationwide. But in San Jose, San Francisco, and San Mateo counties, which is what we're talking about, it's closer to 69%. That's quite high.