Tuesday, October 28, 2014

The wages are too damn low

Tourism is booming in New Orleans!  Get excited, everybody.
For all its bulk, however, the red-hot tourism industry has failed to create a solid middle class in a city riven by some of the worst income inequality in the country, data shows.
It's an uncomfortable truth for industry lobby groups used to touting tourism's massive impact on the local economy.
This is a remarkable article, often the sort of thing that gets drowned out by the overwhelmingly bombastic boosterism on NOLA.com.  It looks like McClendon has difficulty getting the "industry leaders" to talk to him. Instead they sent talking points and a business school guy they keep on retainer.
The city's main tourism boosters - the New Orleans Tourism Marketing Corporation, New Orleans Convention and Visitors Bureau and New Orleans Lodging Association - all declined requests for interviews for this story.

Stephen Perry, president and chief executive of the CVB, issued a written statement in which he touted the industry's history of job creation. "The tourism industry offers competitive wages, job security and career advancement potential unlike any other industry in New Orleans," he said.

The trade groups also referred comment to John Williams, dean of the University of New Orleans College of Business Administration and director of the Hospitality Research Center, which frequently produces economic-impact studies commissioned by the industry.
Throughout the rest of the story, Williams offers the regular BS.. which is immediately revealed to be exactly that.
Job figures from the Data Center show that employment in the oil and gas industry dropped by 46 percent from 1980 to 2011. Shipping fell by 45 percent. Tourism, meanwhile, exploded, growing by 33 percent to its peak before Hurricane Katrina hit in 2005. By 2011, it had rebounded significantly even as other industries continued to falter.

The bulk of those jobs are low paying, though, according to the Data Center. Of the so-called export industries, tourism -- at $32,000 -- had by far the lowest average annual wage.

Williams, the industry researcher at UNO, disputed those figures, saying that many tourism positions are supplemented with tips, so income data that seems to show the industry as dominated by low-paying jobs can be misleading.

The Data Center report says it has taken tipped wages into account.
Also, the tipping system is itself terribly unfair to service workers.  
US companies are allowed to pay tipped employees pittance because customers are expected to tip well enough to surpass at least the federal minimum wage of $7.25, and, if they don't, companies have to chip in the rest.

But that's not how things always work in the real world. "The servers who make 'good money' are in the minority," says Maria Myotte, a spokesperson for Restaurant Opportunities Center United, which aims to improve conditions for workers in the industry. She notes that tipped workers are hit especially hard by "wage theft," whereby restaurants don't make up the difference when the tips aren't rolling in. Between 2010 and 2012, the Wage and Hour Division of the Department of Labor conducted nearly 9,000 investigations in the restaurant industry, and discovered that 83.8 percent had some kind of wage and hour violation.
The industry knows this but they like for you to imagine differently.  (Just because the system is unfair doesn't mean you should stop tipping your sever, of course.)

Later Williams says something truly horrifying. 
Williams, however, said it's unfair to paint the industry with such a broad brush.

Take prep cooks and front desk agents, two typical entry-level jobs in the tourism industry, he said. In the local market, they earn an average of $21,340 and $22,000 a year, respectively, both well above minimum wage, Williams said. And, with the market booming, it doesn't take them long to move up, he said.
Well above the minimum wage! You guys don't know how great you have it. And, of course, every one of these jobs is held by a real Horatio Alger type kid just waiting to move up, right?  Stephen Perry even jumps back in to say so. 
Perry, the Convention and Visitors Bureau president, likewise said that the industry provides unparalleled career ladders. "We have hotel general managers who began as dish washers, CEOs of restaurants who started as food runners and so many more success stories. This kind of opportunity is an offering unique to the hospitality industry."
It's not a great wage, but, you see, you are also paid in "unique opportunities." Really why would anyone complain?  The fun thing about this article is it goes on to tell you why.  
Walker said that hasn't been his experience. After more than a half-dozen years in the business, he was recently turned down for a promotion to butler, he said. He knows people in housekeeping who have been in the same job for more than a decade.
This should be obvious but you can't go around boasting about being responsible for "creating jobs" for tens of thousands of people in town, if the great majority of those jobs are dead end positions that can't even support the cost of living here.
The combination of low wages and a hot real-estate market has only exacerbated the pressure, said Laura Tuggle, executive director of Southeast Louisiana Legal Services, which represents low-income workers on housing issues such as landlord-tenant disputes.

The low wages aren't new, she said, but expensive housing costs are. "Now we have New Orleans wages and New York rents." Service industry workers, including those in the tourism world, now see much of their check eaten up by their living costs, she said.
The rent is too damn high and the wages are too damn low and the answer to that has to be better than, let them eat "opportunities."

Anyway, there's a lot more there. I hope this article gets a lot of play. These kinds of questions are rarely asked whenever we talk about the so-called "lifeblood" industry of the city. We always talk about how much money is spent on tourism in New Orleans.  It's weird that we never talk about whether that money actually benefits anyone.

We tried to get into it a little during Rising Tide 7 although that conversation skewed more toward quality of life, and "cultural appropriation" issues brought on by tourism.  The video is still worth a look.

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