Category: Food and Drink

From the comments, on restaurant labor and UI

I own a restaurant and bar in a rural community in western Washington. Our state minimum wage is currently $13.69 per hour which is what we pay our tipped front of the house employees. After tips these employees are making $25 to $35 per hour. Not bad for a job that requires no formal training.

We start our back of the house cooks at $17 hour and up. For full time employees we also offer health insurance.

We are still having major problems finding employees. I have ads for employees that get zero responses. I am not alone in this. Everyone in our area from Costco, to Walmart, to all of the construction companies which pay very well can’t find help. In all my years I have never experienced a labor market like this.

My anecdotal experience from talking with local individuals is that they are enjoying the paid time off and have no plans to come back until the bennies run out.

For those of you who think you can just pay more and raise prices by a nickel, you are out of touch. As a point of reference, in 2020 the minimum wage increased from $12 hour to $13.50. The increase in costs to my business based on 2019 hours was over $65,000 which is most of my profit. Then covid hit.

Finally, keep in mind that most restaurant workers are not going to learn to code. I’ve have had recovering drug addicts, felons, and people with other social and mental disorders work for us. The restaurant business is an opportunity for many people at the margins of society to be productive and to get their lives together. We give them structure, training, and a paycheck. But the big question is how can you pay someone $15 hour who is only giving you $7 of value? In the long run you can’t.

The current policies of paying people not to work in the long run is going to hurt a lot of small businesses and more importantly, a lot of people in the margins of society.

And Slocum chimes in:

Everyone commenting here and every restaurant owner out there facing labor shortages is perfectly aware that if they raise wages high enough, they’ll get all the applicants they could ever want.

But some of the commenters here (and restaurant owners themselves) also know that restaurant profit margins are not large and that they have limited pricing power because restaurant meals are highly elastic, and that as restaurants raise prices, their customers will come less frequently and buy less when they do come. They also know that wages are sticky — that when the pandemic UI ends, they won’t be able to simply reduce wages back to previous levels without having a big impact on employee morale.

And as a business owner, just how big a bidding war would you want to get into just to be able to bribe the least ambitious prospects into getting off their couches?

Here is the link to the comments.

Does performance pay increase alcohol and drug use?

I would like to see this replicated, but the result is interesting nonetheless:

Using US panel data on young workers, we demonstrate that those who receive performance pay are more likely to consume alcohol and illicit drugs. Recognizing that this likely reflects worker sorting, we first control for risk, ability, and personality proxies. We further mitigate sorting concerns by introducing worker fixed effects, worker-employer match fixed effects, and worker-employer-occupation match fixed effects. Finally, we present fixed effect IV estimates. All of these estimates continue to indicate a greater likelihood of substance use when a worker receives performance pay. The results support conjectures that stress and effort increase with performance pay and that alcohol and drug use is a coping mechanism for workers.

By Benjamin Arta, Colin P. Green, and John S. Heywood, via the excellent Kevin Lewis.

The culinary space culture that is French

A French astronaut who leaves Earth these days does not leave French food behind.

Here are some of the foods that Thomas Pesquet, a French astronaut who launched on a SpaceX rocket to the International Space Station on Friday, will enjoy during his six-month stay in orbit: lobster, beef bourguignon, cod with black rice, potato cakes with wild mushrooms and almond tarts with caramelized pears.

“There’s a lot of expectations when you send a Frenchman into space,” Mr. Pesquet said during a European Space Agency news conference last month.

Alas, alcohol is prohibited, much of the food is freeze-dried, and croissants do not work in orbit.  They do have kale and ice cream.  Here is the full story (NYT).

The petition that is French

A survey of more than 2,600 industry professionals by the Union of Oenologists showed that among those who had caught COVID-19, more than a third said the disease had affected their ability to do their work. Some student wine tasters had dropped out of courses after falling ill with the virus, the union said.

Union boss Didier Fages said the body had written to President Emmanuel Macron and Prime Minister Jean Castex to ask that wine tasters be moved to the front of the queue for anti-COVID shots to safeguard livelihoods.

Here is the full story.

Not everywhere needs another $1 trillion in stimulus

A McDonald’s in Florida is paying people $50 just to show up for a job interview. But it’s still not attracting many applicants.

Blake Casper, the franchisee who owns the restaurant, told Insider that a general manager and supervisor came up with the idea for the interview reward after he told them to “do whatever you need to do” to hire workers.

“At this point, if we can’t keep our drive-thrus moving, then I’ll pay $50 for an interview,” said Casper, who owns 60 McDonald’s restaurants in the Tampa, Florida area.

Here is the full story, via the excellent Samir Varma, excess unemployment insurance of course is an issue, and here is Scott Sumner on the summer of 2021.  So many data points about the rapid recovery and the prescience of Summers and Blanchard, right?

“Free-floating credibility” is underrated

The presence of a minuscule risk for some of the adenovirus platform Covid vaccines means that the FDA has put a hold on J&J and still won’t approve AstraZeneca.

In response to critics, the FDA says that their credibility is on the line.  If they allow vaccine use to proceed, and a modest number of people die as a result (with a big increase in net lives saved), the FDA and its defenders claim that people will lose faith in the FDA.  Yet that is exactly the wrong thing to say, it is self-serving, and it exacerbates the problem at hand.

When the FDA announces that they have to ban a vaccine because its credibility is on the line, that very announcement puts their credibility on the line.  It is a simple two-line proof.  Either they are lying about whether their credibility is on the line, in which case they have wrecked their credibility with the lie.  Or they are telling the truth, in which case by definition their credibility is indeed on the line.

One lesson is that you should not try to extend your credibility too far, because you will end up unduly constrained.

For purposes of contrast, consider alcoholic beverages.  At the federal level they are regulated by the Alcohol and Tobacco Tax and Trade Bureau (who are they again?), and also various state and local authorities.

As a result of this unusual, Prohibition-rooted distribution of authority, alcohol does not come with nutritional labeling.

Now, in that setting, if a bunch of kids die from binge drinking, the credibility of the Bureau is not much damaged.  The Bureau does not have to ban alcohol on the grounds that if it does not, the credibility of the Bureau will be ruined.  The Bureau simply never put its credibility on the line in this manner.

Now you might favor a tighter regulation of alcohol for some reason, but you could achieve such regulation without tying up the credibility of the ATTT Bureau in knots.  Similarly, the Department of Transportation regulates road safety (again with state and local authorities as well), but it has not put its credibility on the line when 40,000 or so Americans die each year on the roads.  Again, maybe they should enforce tougher safety standards, but they shouldn’t tie their credibility to getting road deaths down to one hundred, and indeed they do not.  They end up with more degrees of regulatory freedom.

Let’s say I were to announce that my credibility as a public intellectual were to depend at how I would fare at darts on British pub night.  That would be a big mistake, for multiple reasons.  It is like with the FDA.  If I am lying about that credibility tie, I hurt my credibility as a public intellectual.  If somehow I am telling the truth, well let’s just hope everyone else stays home that evening because my credibility is going to take a beating.

What I call “free-floating credibility” is underrated.

And that is precisely what defenders of the FDA destroy when they…defend the FDA.  They make the FDA worse.

NB: You are “out of your lane” commenting on this analysis unless you have studied game theory with Thomas Schelling.

How to extract information from on-line reviews, or why Star Wars is still a thing

Online reviews promise to provide people with immediate access to the wisdom of the crowds. Yet, half of all reviews on Amazon and Yelp provide the most positive rating possible, despite human behaviour being substantially more varied in nature. We term the challenge of discerning success within this sea of positive ratings the ‘positivity problem’. Positivity, however, is only one facet of individuals’ opinions. We propose that one solution to the positivity problem lies with the emotionality of people’s opinions. Using computational linguistics, we predict the box office revenue of nearly 2,400 movies, sales of 1.6 million books, new brand followers across two years of Super Bowl commercials, and real-world reservations at over 1,000 restaurants. Whereas star ratings are an unreliable predictor of success, emotionality from the very same reviews offers a consistent diagnostic signal. More emotional language was associated with more subsequent success.

Here is more from Matthew D. Rocklage, Derek D. Rucker, and Loran F. Nordgren, via the excellent Kevin Lewis.

My Conversation with Lex Fridman

2 hours 9 minutes long, Lex is one of the very best interviewers/discussants in the sector.  Here is the video, here is the audio.  Plenty of new topics and avenues, including the political economy of Russia (note this was recorded before the massing of Russian forces on the Ukraine border).  Lex’s tweet described it as follows:

Here’s my conversation with @tylercowen  about economic growth, resisting conformity, the value of being weird, competition and capitalism, UFO sightings, contemporary art, best food in the world, and of course, love, death, and meaning.

https://www.youtube.com/watch?v=7Grseeycor4

Recommended.

Which are the most striking elements of Monkey Pong?

Watch this if you haven’t already:

What comes to your mind is an interesting kind of Rorschach test.  A few options (not necessarily endorsed by me) are:

1. Where did they get that background from?

2. Can I have some of what that monkey is drinking?

3. Wealth concentrations are going to make IRB regulations less relevant over time.

4. How many people want to play Pong against a wired monkey?  Will we employ or enslave monkeys to enable this?  What is in fact the relevant difference?

5. What else can that monkey (cognitively) do better than I can?

6. Which regulatory agency will have jurisdiction over the (presumably disabled) humans who want this as a medical treatment?  What about the non-disabled humans?  The Navy pilots?

7. Where does this all end?

8. Will this raise or lower the price of monkeys?

What else?

Cereal brand to reimburse consumers who paid inflated prices during COVID shortage

For those with pandemic pangs for the sweet crunch of Grape Nuts, take heart. The Great Grape-Nuts Shortage of 2021 is officially over.

After months of being out of stock, the cereal is shipping at full capacity to stores nationwide, parent company Post Consumer Brands told USA TODAY exclusively.

And if you paid wildly inflated prices on the black market to get your hands on a box, you may be eligible for reimbursement.

“It became abundantly clear during the shortage that Grape-Nuts fans are ‘Nuts for Grape-Nuts,’” Kristin DeRock, Grape-Nuts brand manager at Post Consumer Brands, said in a statement. “So much so that some of our loyal super fans were willing to pay extreme prices just to ensure they wouldn’t be without their favorite crunchy cereal.”

Here is the full story, via John B. Chilton.  One way to read this is Grape Nuts subsidizing habit formation.  Alternatively, you might read it as Grape Nuts subsidizing very loyal customers, and hoping to get publicity in the process.  Or is Grape Nuts subsidizing future middlemen in any future black market transactions by assuring them of ongoing demand?  How are you supposed to prove you bought a black market box?  And was it illegal to resell and buy Grape Nuts in the first place?  I don’t entirely understand all of the microeconomic mechanisms at work here.

Nominal Taiwanese salmon arbitrage

Have your fun while you can:

A Taiwanese official has pleaded with people to stop changing their name to “salmon” after dozens made the unusual move to take advantage of a restaurant promotion.

In a phenomenon that has been labelled “salmon chaos” by local media, about 150 mostly young people visited government offices in recent days to officially change their name.

The cause of this sudden enthusiasm was a chain of sushi restaurants.

Under the two-day promotion, which ended on Thursday, any customer whose ID card contained gui yu” – the Chinese characters for salmon – would be entitled to an all-you-can-eat sushi meal along with five friends…

The United Daily News reported that one resident decided to add a record 36 new characters to his name, most of them seafood themed, including the characters for “abalone”, “crab” and “lobster”.

Here is the full story, via Jeremy Rubinoff.

“You have to order all at once”

I’ve now been to two different Miami restaurants that have told me the same thing.  They will take your food order only once, and you cannot decide later that you would like additional items, though you can ask for more water (and presumably other drinks?).

Perhaps this is part of a desire to economize on labor costs, so you do not need more staff to run around the room and ask diners if “they are OK”?  Is it so bad to be forced to know what you want in the first place?  And might it induce risk-averse customers to over-order a bit, thereby boosting restaurant profits?  Should your enjoyment of the meal really depend so much on the third derivative of the utility function?

Do any of you know of other instances of this policy, or data on its effectiveness?

Is the policy actually time consistent, namely what if you insisted you wished to spend another $100 on the food there?  Would they tell you no and bring you the check?

Both places, Boia De and Lung Yai Thai Tapas, were excellent, get the Kow Soi at the latter and then walk up the street to the anti-communist memorials on 14th St. for one of Miami’s most interesting and unusual cultural highlights.

Canadian expense arbitrage markets in everything

Good Fortune Burger of Toronto has named its menu items after office supplies so that customers can include them on expense reports:

Fortune Burger: Basic Steel Stapler
Diamond Chicken Burger: Mini Dry Erase Whiteboard
Double Your Fortune Burger: Ergonomic Aluminum Laptop Stand
Emerald Veggie Burger: Wired Earphones With Mic
Parmesan Fries: CPU Wireless Mouse
Ginger Beer: Yellow Lined Sticky Notes
San Pellegrino: Ball Point Black Ink Gel Pens
Build Your Fortune Burger: Silicone Keyboard Cover

“There’s no malice intended in it,” Director of Operations Jon Purdy told blogTO. “It’s all just fun and games.”

Here is the menu, via John Thorne.

Which small changes in pandemic habits will stick?

That is the topic of my latest Bloomberg column, here is one excerpt:

I for one will miss the Saturday evening Zoom meeting. Since the pandemic started, I have found it easy to schedule calls at 5:30 or 6:30, even when more than one person is involved. Everyone just says yes. Why not? You’re not going out to the movies or dinner. Even if you think Zoom calls are oppressive — especially if you think Zoom calls are oppressive — it is better to have somewhere to put your marginal Zoom call other than 2 o’clock on a Thursday afternoon.

For a lot of people, the blurring of work and private time has been a burden. But I’ve been living that way most of my life. For the last year, the rest of the world has been forced to adopt my work habits, and I am going to miss it when they return to traditional socializing. I’ll still be offering you that Saturday night slot. We’ll see how many takers I get.

And:

I also will miss early lunch, a practice also noticed by New York Times columnist David Brooks. Like a lot of people, I miss eating in a variety of settings — not just restaurants or coffee shops, but cafeterias or my desk — so I look for that variety temporally. The early cooking of a hamburger does indeed provide that break in routine, and with lunch at 11, why do I need breakfast anyway?

Recommended.