The Bleak Economics of Low-Skill Food Service Work

Moneybox
A blog about business and economics.
March 12 2012 2:15 PM

The Bleak Economics of Low-Skill Food Service Work

A great narrative Nona Willis article in Good surveys the life of the urban food service industry worker and explores various efforts at labor organizing and the like.

Unfortunately, I'd have to say that the outlook here is not that great. In broad terms the kind of industry you're looking to target for labor organizing is one where limited competition is creating windfall profits for someone. That could be airlines in the 50s, 60s, and 70s, mobile telephone providers today, the large industrial enterprises that once dominated the midwest, or certain classes of contemporary hotels. Where the windfall profits lie, organized workers can force owners to share some of the profits with the broad mass of workers. Food service strikes me as too competitive for this to work systematically. If owning a Quiznos franchise becomes systematically more profitable than owning a Subway franchise due to some labor arrangement, then what will happen is Quiznos franchises will proliferate across the land as Subway withers and dies. Meanwhile, one of the main reasons why the food service sector has become our "employer of last resort" in the United States is precisely because the jobs are bad and the wages are low. Firms have not yet invested a lot of time and energy in figuring out ways to get by with fewer fast food workers, but in France I saw that McDonalds outlets had installed touchscreen kiosks where you could place your order without needing to visit a cashier. American manufacturers got remarkably good over the decades at producing more stuff with fewer workers, precisely because one man's good job is another man's employee I'd like to find a way to lay off.

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The more promising thing about food service is that some of the same characteristics that make it a poor venue for large-scale labor organizing—relatively low startup costs and relatively few barriers to entry—make it feasible to experiment with new models. You can start a brewpub coop or take your talents on the road with a food truck or leverage a reality TV appearance to escape wage slavery and become a local entrepreneur. But all this kind of thing requires some modicum of skills—real cooking ability or understanding of business principles or both. It's important for the country to start taking food service seriously as an industry and major element of the labor market, because the ongoing rise of e-commerce is going to mean that more and more of our commercial space will be dedicated one way or another to these things.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.