Quote:
Originally Posted by dc_denizen
Its an interesting question, why haven't plumbers/restaurants doubled their prices in response to the rich making more money?
|
It is because of supply and demand in their labor markets. The cities on the coasts are immigrant gateways. Immigration may be a net positive for the economy as a whole but it almost certainly depresses blue collar wages in places where there are tons of immigrants. Restaurants in cities like LA and San Francisco don't raise their prices because they they can still get workers for what they are paying.
Most of the Californians I've worked with in Minneapolis are the children of immigrants. They realized they could take their skills and move to a place where there was less competition for blue collar/restaurant jobs and carve out better lives for themselves.
Right now wages for restaurant workers are falling, quickly, but once the economy turns it is hard to say what the long term impact will be. If they stay depressed, restaurant workers will leave the big cities of the coasts in larger numbers because they won't be able to live there. On the other hand that might drive up wages in the long run. A lot of it depends on immigration. In Minneapolis, kitchen wages fell relative to the cost of living from 2001 until around 2015 or so and rose after that. The main driver of the increase after 2015 was that immigration from Mexico and Ecuador (restaurants main source countries for workers in Minneapolis) had slowed sharply after the financial crisis and never recovered. By 2015 the local restaurant labor market had run out of slack so labor shortages started driving wages up to pull in workers from other regions and other parts of the local economy.
If one of the long term consequences of all this is less immigration then restaurants in large, expensive cities will become much more expensive, which will probably lead to fewer restaurants and people cooking at home more. It would be great for professional cooks and bad for diners and attractive charming recent college grads looking for jobs waiting tables.