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Opinion

What the Devil won't tell you

Labor's glorious unemployment revolt has run its course; it's time to eat the pizza

America's workers established the greatest economic success story in history, for my money

Rocco DiGrazia and I have never met in person, but we share something.

We both worked at Caruso’s in the early 1990s. Yes, Arizona’s oldest Italian restaurant employed a budding humble political scribe (vaguely humble) and the future proprietor of what has been described as the best pizza joint in town.

I bring this up because the restaurant industry has been gut-punched over the last 15 months, as has Arizona’s workforce.

But there’s an upside to it on this day we celebrate labor: Wages are rising as workers have leveraged the system to command top dollar for their services. Let's just not take it so far that we force the regular small business owner under.

Not that Gov. Doug Ducey and the Arizona Legislature (our state's worst Greg Abbott cover band) haven’t tried to cut the knees out from under those workers. The state pulled back the extra $300 weekly bump in unemployment checks for Arizona’s jobless.

In a narrow context I provided a few months ago, I get it. However, given broader context, I find it appalling that they would find it so ghastly that the system was finally rigged on behalf of normal people.

Seriously, workers were finally getting what may have been a bit of a luxurious lift from the government. Well now, it’s not like the country is made of money, right?

We’re only made of money when it’s time to provide capital-gains tax breaks for fund managers who don’t provide capital investment, $2 trillion in graft to prop up an Afghan government that couldn’t last 12 days after U.S. forces pulled out, extra engines for F-35s the Air Force didn’t want, the oil-freaking-depletion allowance and 40 years of income stagnation for ordinary folks as the coffers of the top 1 percent grew spectacularly overloaded.

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Ducey’s argument was that because workers got an extra $300, they were unwilling to take whatever jobs the economy had to offer.

Well, good.

The state is being sued now by a Unemployed Workers United, which includes Tucson’s longtime agitprop lawyer Paul Gattone. The suit alleges Arizona must act in the furtherance of national unemployment insurance plans and not to hinder those efforts.

I don’t know. It seems like a legal deep ball. This Hail Mary (can we use that phrase when talking about commies?) might have a big potential upside for the plaintiffs, but not the best chance of working out.

At the same time, it’s good regular people who are catching a break usually reserved for the well-to-do and well-connected.

The labor movement, which we celebrate Monday, proved crucial in establishing the American middle class, which is (for my money) the greatest economic success story in human history.

For a couple of generations, any old worker could raise a family, put kids through college, take trips to the Grand Canyon and Disneyland and have a decent retirement on the income earned off a typical American job.

Then came the 1980s, with corporate raiders and a shift toward industry obsessing over daily stock prices, and the wealth of generations got concentrated in the hands of the few.

Businesses pursuing tax breaks managed to corral changes in the law that yanked all the might from labor unions, while they insisted on non-compete clauses in employee contracts and consolidated into megacorps that limited competition for both products and employees.

Today, people like the idea of labor unions but have shown very little patience for them in practice. Back in 1934, the West Coast Longshore Strike lead to crackdowns by the authorities that turned deadly. General strikes then followed as other unions unrelated to longshoremen also joined the strike. That was how the public showed support for unions back in the day.

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But for years, unions have been rendered largely toothless in the fight for higher wages.

Who knew the cure for that was to have a pandemic and then give the people just a little bit of extra help to get through it.

The contrary argument is self-evident. People shouldn’t idly feed at the public trough when there are jobs waiting for them to feed at the private trough in exchange for hours of labor.

The state also shouldn’t be taking public school dollars and giving them to private schools. But hey, people like me keep losing that argument in Phoenix.

When Ducey decided he’d seen enough of worker shortages, wages were growing faster than at any point since January 2009. That’s what the business news said anyway, but it’s not really true. Median wages increased markedly in 2009. It’s amazing how that happens when businesses cut 800,000 people from their payrolls over a 30-day stretch. The folks remaining are the higher earners (because they have deemed themselves too essential to lay off).

This is historic. Good on the people getting ahead.

A business story

Then I get to DeGrazia from over at Rocco's Little Chicago on Broadway, and the other half of the story as I stick with the industry that served me well toward the end of my college years.

DeGrazia has done everything we can ask of a good neighbor and business leader.

First, he runs a damned fine pizzeria and pizza is a national effing treasure on the order of a chicken chimichanga and creamy Jif. He’s been in business for 20-plus years.

A good chunk of his employees have been working with him for more than 5 years, and that’s a pretty solid track record for the restaurant industry.

When the pandemic hit and restaurants had to shut down, he kept his team on the payroll, even though money wasn’t coming into his cash register at all. He’s kept them employed even as business tanked and commodity prices have risen.

Keeping his employees on the payroll, he said, “is part altruism and part necessity.”

“I cultivated them,” he said. “ They are part of my operation and if possible I want to keep them a part of my business.”

He’s finding some trouble filling out his staffing but he needs the economy back and running again. He needs people working to get his supply chain back in working order. And he needs people clocking in at other businesses so they can collect their paychecks and head down Broadway for a pie.

Suicide squeeze

It’s not easy running a pizza joint. The product is very price sensitive and his labor costs are growing, squeezing him from both sides.

Running a restaurant with a good rep is one of those things where bad days or weeks are dangerous. Setting a standard is one thing. Having the staff around to meet it is another.

“It’s monumentally expensive to train people,” DiGrazia said. “It’s monumentally futile to train them and have them leave.”

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There are jobs to be had in the restaurant industry at $17 and $18 an hour, he said.

Call that a new new high. According to the Bureau of Labor Statistics, the average cook earned $13.84 an hour in May 2020. Those earning more than $16.13 were making more than all but 25 percent of their co-workers in the kitchen.

Until the labor market sorts itself out and unemployment drops, it’s going to be a tumultuous time for a lot of the hospitality industry. Tumult has been the story of this industry for the past 14 months.

According to the University of Arizona, there were, in February 2020, 291,000 jobs in Arizona’s lodging and food service. Two months later there were 168,000. It’s been clawing its way back but remains 20,000 jobs short of where the employment numbers were pre-pandemic.

Ducey’s move to cut unemployment checks did coincide with a 20,000-job gain across all non-farm sectors, but was smaller than the 41,000-job increase that preceded the end of increased benefits.

I should point out that the extra money Arizonans received exceeded the maximum $240 weekly jobless benefit the unemployed typically collect in this state.

Without more evidence, no one can say with authority that Ducey's ending the extra federal dollars for the jobless led to an increase in jobs. Honestly, it might have.

It's one of the untold stories of the pandemic that Keynsian economics has been proven to be real, and not a lie told by liberals. Keynsian economics is the idea that government can help the economy through a rocky stretch by replacing the money vanishing from the private sector. The United States finally did it with the kind of gusto only allowed during an election year when Republicans fear their ox is about to get gored. While the economy sputtered, cut out and lost a lot of altitude, it never really crashed.

In fact, the recovery has been such a steep climb that the biggest problem the economy now faces is a labor shortage.

Anyone kicking back and waiting for the best possible job should seriously count themselves phenomenally lucky to be experiencing their generational recession with employers begging the unemployed back into the job market.

It wasn't always thus.

A few words to today's unemployed: 10 years ago, people with white-collar backgrounds were begging guys like DiGrazia for work years after the crash. The unemployed couldn't get arrested in the job market.

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Y'all are getting signing bonuses.

Jobs are almost always described as "lagging indicators" in a recovery. They come after a rebounding stock market, the restoration of economic growth, fat corporate balance sheets and the Chicago Cubs winning a World Series.

Count yourselves blessed.

Punching in

The marketplace needed people to get the vaccine and it’s been a slow go. Now, it needs people to make the jump back into the labor force, whether it's cranking out pizzas or whatever else they're good at.

The income gap hasn’t been solved and too many see it as a feature and not a bug. Government should do more from strengthening unions, to expanded continuing education and providing child care. Non-compete agreements have to go and howzabout breaking up super-massive corporations consolidating into less competition for job seekers?

Workers have seized this opportunity, it seems, to leverage their power, which was both sudden and unforeseeable.

That’s great. 

Now may be the point where workers are on the verge of experiencing diminishing returns.

If small-business proprietors like DiGrazia go under (and he says he's doing OK), they are going to take jobs with them and suddenly the economy has a whole ‘nother problem.

Disclosure: Rocco’s Little Chicago has been a sponsor of TucsonSentinel.com.


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New York AFL-CIO

Labor unions were once the arbiter of higher wages and benefits. Now workers are using their own gumption to tame the system.

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