The Real Reason Why Seattle-Area Restaurants Are Experiencing Labor Shortages

Comments

1

if one cannot Farm the
then Citizenry what's
the Bloody Point?

Werk ‘em Hard is what I said
be Relentless till they’re dead
and when their souls have
left this Earth grind thier
bones clear back to dirt.

now
who needs
a little Top$oil?

2

We learned to cook again in the past 18 months. Who needs restaurants,

3

@1
The corn looks really great this year! What's your secret?

4

@3 -- lotsa
Orphans

5

You trying to write stuff that people with a public school education can’t understand? It’s very fancy, but I don’t get it.

6

The connection between labor shortage and the pandemic is well explained by capitalism: restaurant labor that is under valued and under paid will be filled by machines, not people. The author does not explain the Marxist logic in a compelling way. How does a machine driving a car make the ride less valuable? The magic thinking that both explanations rely on, however, is that jobs are the only means of acquiring the means to survive. As the machine age improves our existence, jobs must evolve and be disconnected from a guaranteed minimum income.

7

@2 Charles does because he spends an exorbitant amount of money eating out. I assume he tips good for as much as he writes about how working in the restaurant industry, while simultaneously loving to have people serve him, sucks.

8

Is there any more bankrupt economic theory than the labor theory of value? It would be hard to get something more wrong if you tried. Keep trying to patch those obvious holes, Charles. Maybe the next time Marxism is tried, they'll get it right.

9

Good summary of Marx's Law of the Tendency of the Rate of Profit to Fall. Note that not all Marxist economists agree that there is such a law. Also, since it is the increase in the (exchange) value of constant capital that is operative in this tendency, the reduction in the value (and thus cost) of constant capital due to the increase in productivity (loosely: the automation of the production of constant capital itself) acts to offset this tendency, a fact that Marx himself pointed out. There is also virulent disagreement among Marxists about the implications of the law: Does it mean that capitalism is historically doomed and will eventually be replaced (either by "socialism or barbarism")? I tend to think it does, but I am not an expert. :)

10

@7:

There's absolutely nothing wrong with having someone serve you a decent meal; what we're arguing about mainly is whether the people who cook, serve, and clean up afterward deserve to be treated as human beings and paid an amount that allows them to live with some modicum of dignity, or whether they should continue to be treated as serfs and forced to survive on menial wages for someone else's benefit.

Clearly many former workers in the industry have decided they no longer wish to be treated like the latter and have leveraged the pandemic as an opportunity to get that "better job" those on the Right have been harping on them to do for so long.

And now the Right is complaining because they can't get the sort of slaveringly obsequious service to which they believe they're entitled...

11

"The equipment of manufacturing can only, according Marx, transmit the value they already have into products. Robots, oddly enough, can't be exploited. As a result, profits derived from surplus value start to fall."

Wow, that barely even qualifies as wrong. Assuming the original author was indeed Marx, and not Charles' chronic habits of heavy day-drinking and reading above his skill level, this merely demonstrates the hazard of citing someone who died almost 140 years ago as an authority on what modern machinery can accomplish. Even if machines could add 'only' the values of high production rates with near-perfect precision and reliability, that alone would make robots an excellent way of adding value to certain products.

(Also, is there a source of labor more eminently exploitable than a robot? The very origin of the word, which is exactly the type of topic upon which Charles loves to expound, strongly suggests a very negative answer.)

12

@6: profits funneling up to people who own businesses - capitalists - comes from paying laborers less than the value they produce, leveraging the fact of ownership to do so. The capitalist is losing money in payment to the worker, but making out like a bandit when it comes to the overall equation because they keep a disproportionate share of the proceeds of the business. When a business automates production, they pay for the robot (or whatever) and cannot reap surplus value from it like they can a laborer.

For that single business, this is usually great, at least temporarily, since the automation usually increases the business' ratio between productivity and costs, with that decrease in costs turning into profit for the owners. The trouble is that, eventually, everybody starts to automate the same thing, so to "stay competitive", prices must decrease to reflect the decreased costs. Though it doesn't always work like this, businesses to tend to adopt practices that others are using to cut costs. At this point, is sounds like a zero-sum game for capitalists on the long term, since they had to cut prices to account for industry-wide cost cuts, and a win for everyone else since they spend less money on the product. However, because of the removal of surplus value extraction (static cost for robot vs. exploited cost for labor), the rate of profit industry-wide will have fallen. In addition, because profits funnel to the top, the people who are now unemployed by automation face additional risks that are not always offset by the value of increased productivity.

The tendency of the rate of profit to fall is a very old and highly accurate Marxist prediction following from this material analysis of automation, which was initially posted as the introduction of industrial tools that make workers more effective.

For your example of driving a taxi, it can be summed up as, "the owners always have to pay the full cost for a driving robot but they can underpay human drivers". Even if the robots are cheaper overall, the long-term source of profit has been removed from the equation. The first company to do it and save on costs will do well for a while, but if everyone adopts it, there is simply a smaller pie to pass around at the top, so the only way to try and maintain profits is to make changes elsewhere. Sometimes those changes are pretty horrific.

Where Charles is missing an important fact of American production is in ignoring the impact of imperialism, which is where labor exploitation becomes a more international affair, and generally by force (military, financial, etc). Industry has largely moved outside of what's called the "imperial core", which includes the US, and why the US relies on a service and finance economy. Others do the labor-intensive (and therefore more exploitable) manufacturing for us for wages far below what an American makes and when that order is opposed, the US and others tend to use their levers of power to coup their leaders, issue sanctions, downgrade or entirely prevent their ability to obtain loans, support opposition leaders that murder those pushing back against this system (read The Jakarta Method, for example), and militarily bomb/invade. The "bad guys" the US chooses are usually just those people who oppose this particular economic order, there is no other ideological consistency. The US supports Saudi Arabia, a misogynistic monarchy that exports Salafism, but destroys Libya. The US economy does not "support itself", it is not a somewhat closed system for exploitation. It exports capital (that it still owns), generally by force, and reaps the benefits for large transnationals, something that does slightly trickle down to others in the US in the form of cheap products. And we can see how easily it begins to fall apart when the service sector that does largely unnecessary things (we do not actually need this many restaurants, e.g.) is disrupted. The greater impact from those service jobs is to create a consumer base for those products and it's why that job insurance program was successful: keep consumption up. We didn't keep production up, we kept the ability to purchase things floated.

13

@5 Indeed, which means Charles is mostly his own audience in this article. You have to already be familiar with some Marxist ideas to parse what he's talking about.

Probably the most helpful thing to understand in this article is the impact of "constant capital solutions", which is automation. Back in Marx's day, he was thinking of machines that can be run by a single person, replacing ten. An automatic food ordering kiosk is not that different in that it still takes people to create the thing, but its value proposition is that it performs the task of several people while requiring fewer resources overall.

He's talking about this because the primary source of profit for the owners of businesses is underpaying for labor. There are no great innovations in running Italian restaurants around the US. An owner of an Italian restaurant makes a disproportionate amount of money because they own the restaurant's location and/or the decor, the kitchen, the tools, etc. and can leverage this to get others to work for them at less than the value produced by their inputs. Even if they also work in the restaurant and provide value, the owner (1) gets to keep the full value of their own labor and (2) skim off the top of others' by underpaying them. This is what he refers to as "variable capital" and the system of underpaying for labor value is called "exploitation" by Marxists.

"Fixed capital" would be a kiosk that replaces the need for half of the front-of-house staff. Fixed capital cannot be exploited, you can't underpay it for labor. It's a commodity sold to you, it cannot be coerced by needing to eat or have housing and it's not selling its labor like workers do. That "fixed capital" can be great for a single business, since it will often cut costs. A kiosk that costs $20,000 may replace two workers that cost $70,000 per year, for example. That absolutely does mean more profits for that business in the short term: they can keep prices about the same and pocket the difference. But if kiosks were to become popular everywhere, then "competition" starts to kick in and competitors drop prices. Suddenly your Italian restaurant is "overpriced" because other restaurants that use kiosks passed the savings on to the customers. You (the owner) then have to drop your prices as well.

Because that "fixed capital" cannot be exploited and prices for your product have fallen to match cost decreases, you have actually lost a good chunk of your main source of profit (underpaying for labor) and your rate of profit will fall. Therefore, on the industry level, automation tends to decrease the overall rate of profit, even as it helps individual businesses temporarily.

Charles poses this as the great conundrum that must be resolved, since the capitalist system has not fully collapsed despite automation. First, it has repeatedly collapsed and has had to be resuscitated and floated using increasingly complex (and more and more artificial) means that usually amount to forcing lower effective wages onto workers. He provides an "answer", which is that automated industries are propped up by non-automated ones, saying that manufacturing is highly automated but service industries are not, so service industries are propping up manufacturing. This is kind of the right direction of thinking, but he's failed to recognize that the greatest labor exploitation on the planet is international, with capitalist-aligned-and-owned enterprises transnationally exploiting the labor of people in other countries. The cobalt in your phone earned capitalists a hefty profit because it's mined by children and slaves in West Africa. Your own work also earns capitalists a profit, just with nowhere near the same rate.

Happy to go over other things that were not well-explained by Charles.

14

@8 Labor exploitation, alienation, and the rate of profit to fall are not simply LTV. I recommend that you read into these topics from the actual source materials and to do so in chronological order. Feel free to start with Adam Smith or Ricardo, as mentioned by Charles, who were far more enamored with LTV than Marx (Marx actually criticized much of LTV if you actually, you know, read him).

Anyways, the basic premise of where profit primarily originates is what we're talking about, is true, and is not contested by capitalists - at all.

15

@12: "profits funneling up to people who own businesses - capitalists - comes from paying laborers less than the value they produce, leveraging the fact of ownership to do so."

Again, this barely even qualifies as wrong. Profit is the difference between cost to produce, and money charged, to customers for the product. Underpaying workers is one way to realize profit, but it's hardly the only way. (Having a demonstrably better product than all competitors is another. This often involves paying workers handsomely.)

"When a business automates production, they pay for the robot (or whatever) and cannot reap surplus value from it like they can a laborer."

Using a bizarrely non-standard definition of "surplus value" doesn't win the argument; it merely displays the duplicity at the heart of this 'argument.' Again, this can barely even be said to be wrong.

16

@15

Again, this barely even qualifies as wrong. Profit is the difference between cost to produce, and money charged, to customers for the product.

Great, you can do baby's first bookkeeping. This is not actually an analysis for how that difference emerges in the first place. Not all business ideas are or can be profitable - from what processes is this difference created?

As I explained, automation creates this difference temporarily and it's what pro-capitalist people like to focus on. Sometimes they call it "innovation" because they like to be vague and not ground their thinking in actual things that exist or are exchanged. Realistically, it's usually just finding a means by which to produce for less cost (or to produce more for the same cost), i.e. adjusting that ratio to increase the difference between costs and gross proceeds. In other words, it is normally not a qualitative change to production. In addition, a given "innovation" or automation can only provide this increased profit temporarily for the reasons I already described: eventually everyone else adopts it as well and forces prices down.

Great, that's the zero-sum game version, but it still failed to answer the basic question: where does the profit come from in the first place? Is it always "innovation" and "automation", a constantly-moving target? Again, no. There are not constant and amazing innovations in owning, say, an Italian restaurant that keep it floating by dramatically decreasing costs/increasing productivity. Instead, profits come from paying staff a "market rate" that, in aggregate, is lower than the gross proceeds of your restaurant: you pocket the rest as profit. This is the fundamental basis for profit, generally, and the "deal" created by wage labor, i.e. capitalism. This is not actually controversial, it's the basics of classical and neoclassical capitalist economics, but the framing is rarely honest.

Underpaying workers is one way to realize profit, but it's hardly the only way. (Having a demonstrably better product than all competitors is another.

It is the fundamental basis by which owners accumulate and workers do not. Remove fixed costs from gross proceeds and you are left with the amount that is potentially exploitable from workers. Owners are not constantly removing enough fixed costs, certainly industry-wide, to ensure the levels of profits acquired, and again, Italian restaurants ain't exactly cutting their fixed costs at the rate of profit, are they? Instead, they fundamentally achieve their profits by paying their wage laborers less than the marginal exchange value for which they sold their product.

This often involves paying workers handsomely.)

By necessity, less than the exchange value produced by their labor (otherwise there would be no profit), and systemically, the system generally forces this to be at or below starvation levels over time. One of the many contradictions of capitalism is that wages are forced down so low that reproduction halts (customers are paid too little to buy your products). This is why there are so many systems to prop up consumption in the West. It's also related to controls on inflation, but that's even more complicated.

But again, even a "well-paid" worker is going to be paid less than what they produced, the excess going to the person who simply owns the property. There's a reason that just owning crap is desirable in this system, you get to make money from doing nothing (even if you still work).

Using a bizarrely non-standard definition of "surplus value" doesn't win the argument; it merely displays the duplicity at the heart of this 'argument.' Again, this can barely even be said to be wrong.

I'm using the standard definition and have explained it three or four times in this thread. You can go look it up if you'd like or I can explain it to you.

As a general recommendation, you should consider learning more before sharing your opinions. You have a habit of being loudly wrong and it seems to be threatening a particularly fragile ego.

17

There's something beautifully, quintessentially Charles about a post which begins by trumpeting the pretentiously promising headline, "The Real Reason Why Seattle-Area Restaurants Are Experiencing Labor Shortages," and then his 'explanation' involves the (fundamentally, we are solemnly told!) un-exploitable nature of robots.

@16: Everyone who works at a for-profit business should be paid less than the value they produce. The only economy where there no value remains after production is a subsistence economy, and I doubt anyone wants one of those.

You've made it completely obvious you want profit to be only at the expense of workers -- your very first line @12 makes this clear -- but, perhaps startled by the loudness of my bullshit detector sounding, in the third paragraph @13 you walked it back a bit. So, now you're going to assert, assume, and define your way back to that predetermined conclusion, because actual facts are not your ideology's friends. Have fun with that; I have little doubt you'll be full of self-congratulation once you do.

Meanwhile, much to your vexation, words actually do mean things, and "innovation" has a much broader meaning than just "installing automation." Another obvious mistake was,

"In other words, it is normally not a qualitative change to production."

That's the sound of manufacturing, operations, and industrial engineers worldwide all laughing at your expense. 'Tis pity you'll probably never understand why.

Other basic errors include your belief that workers cannot ever afford houses or even savings accounts ("...owners accumulate and workers do not.") and that the populations of the industrialized world are starving -- unless you have defined "weighing in, bare naked, at anything less than 18 stone" as the new starvation in America. Look, I agree that capitalism would have eaten itself long ago were it not for the massive governmental interventions brought by, among many other entities, the labor movement, but that was before health and safety laws, unemployment insurance, Social Security, minimum wages, and a host of other economic innovations imposed upon capitalists by workers via governments. Getting both your economic theory and your economic data from the time before Karl Marx died is really hurting you here.

While, as implied in my first paragraph of this comment, restaurants tend not to employ robots, that does not mean automation or innovation does not exist in them. Indeed, for the last year-plus, a global pandemic has meant that restaurants could either innovate or close. You really could not have picked a worse time in the last hundred years to claim that restaurants do not innovate. Congratulations, I guess?

(Also, what's your fixation on "Italian" restaurants? Was such an establishment your last place of employment, which ended because you ignored the owner's repeated insistence you push that broom with the same energy you'd shown in persistently expounding your angry rhetoric at your indifferent co-workers?)