Unemployment
We spent our vacation in Park City. The biggest issue there is not enough staff. They literally can’t hire enough people. That is a small microcosm of what is happening at a bigger scale.
There are multiple pieces to this puzzle Large company greed and not paying attention to the next generation of shareholders. Immigration policies have made it impossible and fearful to hire people who come back and forth each season for seasonal jobs. We need more people for the jobs available and without people to hire that stops growth. At one point we will start replacing jobs with automation and in turn, growth still slows down because there will be many people without jobs and income which is not good either. The third issue is housing. I will toss in lawsuits at one point but here is what is going on.
Over the last few years, Vail Properties has acquired multiple ski resorts. It is never easy rolling a bunch of independent operations into one. You have to get everyone working on the same backend software to start and cultures are quite different at every location. Vail Properties seems to be a bit tone-deaf so instead of working with each spot to continue a community spirit they have just plowed through without holding up to certain promises made. What happens when companies don’t live up to their promises is costly lawsuits. A waste of time and capital when if they had done the right thing they would not be having to fend off a legal suit. Wouldn’t it be smarter to spend that money towards doing the right thing or hire wages? I would love to see the data when the dust settles but quite sure nobody would ever analyze that.
Second, they are barely paying minimum wage. How can anyone in an upscale area that is far from other locations actually survive on those wages? This is basic economics.
Third, housing. People can not afford to live on low wages and certainly can’t afford housing. There have been several businesses in other areas of the country that have been hurt by this as well. You can not expect people to travel two hours a day back and forth for less than minimum wage particularly when there is plenty of capital to make those changes. Do the right thing.
This short term behavior might make their current shareholders happy in the short term but the next generation of shareholders, Generation Z, and Millenials believe in doing the right thing such as fair pay and less profit for companies and that means less income for the people at the top.
The backlash to the immigration policies put forth by this administration will force companies to rethink their programming workforce overseas but when it comes to people at ski resorts, restaurants, and stores in physical locations we are going to see it get worse.
CEO’s from Vail and any large retail company needs to start thinking differently. Toss in restaurants, how do help them survive when paying minimum wages is important but perhaps rethinking the tax structure so they can make a profit? We need to see leadership that understands expectations from the next generation including an economy that is based on the ability for everyone to work at fair wages, with a roof over their heads and with people who are able to come here and get employment that creates growth for our economy. Zero employment is not a bonus.
This might have taken place at a ski resort, which might seem like high-class problems, but there are jobs there that people could have if Vail was thinking differently. Small microcosms generally are a picture of what is happening at a much larger scale.
Comments (Archived):
.What you are reporting is the impact of the greatest US economy since 1900.There are three US visa programs that can be used by ski resorts to attract seasonal employees:1. The H2B programA ski resort has to “sponsor” a foreign employee for a specific job at their mountain. This requires the applicant to apply for a job and receive an acceptance letter (effectively an offer of sponsorship in visa lingo).Every resort is required to show that no US citizen is available to fill the job. This has always been the rule. Now it is actually being enforced.As a result, resorts do not typically use H2B visa employees for entry level jobs. They do use them for ski or snowboard instructors as these are skill based jobs.This program is usually tapped out by April — which creates a huge problem as it relates to the requirement to have offered the jobs to Americans.2. The J-1 programThis applies only to Australia, New Zealand, Canada, Peru, Argentikna, Brazil, Chile, Costa Rica, and Ecuador for the winter and Brits and Irish over the summer (not winter). A lot of these are S Hemisphere countries so they are coming to the USA during our winter and their summer.J-1s are done through “sponsoring agencies” which entails a fee. You have to be 18-29 and — wait for it — a student or just finished up schooling 12 months earlier.3. The Australian/New Zealand programOzzies and Kiwis have their own program which differs in that they don’t have to have a job lined up BEFORE they qualifyThere are a few ways to game the system (B-1 tourist visa, go to a resort, get a job, convert to H2B), but these 3 are the main ones.The issues of housing, travel, and pay have been such for time immemorial. Most ski workers are there for the FREE PASS more than the work.There are groups like the Professionoal Ski Instructors of America who have this all mapped out.As to housing, every ski resort is in a city that does not embrace multi-family or dormitory housing. The land is too expensive. The utilities are too difficult to extend. Nobody wants a dorm next to their $4MM ski chalet. Blame that on the locals.A great economy brings with it some unique challenges.Skiing is an affluent folks undertaking. There are damn few Millennials skiing unless their parents have a place. Even if they have access to free lodging (like my kids) they still are facing travel, equipment, lift pass, and food expenses.JLMwww.themusingsofthebigredca…
Wouldn’t it be smarter to spend that money towards doing the right thing or hire wages? I would love to see the data when the dust settles but quite sure nobody would ever analyze that. Second, they are barely paying minimum wage. How can anyone in an upscale area that is far from other locations actually survive on those wages? This is basic economics.There are actually a few issues here. One is the lack of labor. The 2nd is paying labor more.There is a specific reason that companies often choose to not pay well for positions. Or to increase salaries as explained below. Not a judgement on right or wrong just something to think about business wise.They actually don’t want to retain employees depending on the labor market and the ability to hire replacements. That’s right. For example a company like McDonalds in certain positions would rather have ‘churn’ in employees (in the right labor market that is to repeat) rather than have people stay. Why? Well it’s more cost effective to train and hire a new employee than it is to keep increasing the pay of an existing employee who can’t (because of the type of job) be more productive. So they want people to only work a short time and not stay. (Short time varies by position and company obviously) There is no advantage to an employee staying. Now of course most businesses don’t for practical reasons work like this. For example our building condo association has the management fee go up every year (3% to 5%). As condo owners we pay that increased fee. One expense of the management company is to be able to pay higher wages each year to employees. One employee is the receptionist. Now I can tell you for sure that if the receptionist has been working for 10 years they are not able to do a better job than someone working for 1 year. Make sense? And why should I (as a condo owner I own 10% of the complex) have to pay more for something that I am not getting more value from? (I am saying it that way on purpose to make a point not to be cold hearted). You know where else this happens? Hospitals. I can tell you for a fact that hospitals will not pay more for certain experience if they can get someone literally out of residency to do the same job. Common sense says people would want the more experienced Physician and that this is wrong. However the hospitals do this because they are under pressure to reduced costs. And this is one way that they can do this. Scary right? It happens (not something most people know is going on btw..).So the equilibrium is if the resort is able to get the type of person who will work for low wages that is what they will do. If they are not then they are forced to pay higher wages.If you are a shareholder of a company let’s say you are a retiree you are not going to keep an underperforming stock if you are given the explanation as ‘we are paying more <bthan we=”” have=”” to=”” for=”” labor=”” we=”” are=”” doing=”” the=”” right=”” thing<=”” b=””>’. Now if the stock does well then all is fine. If you don’t own a great deal of the stock all might be fine. But honestly at the core it’s a business decision that is made in terms of wages to pay. You know it’s called ‘the bottom line’.That said of course there are positions that you might need to pay higher wages for various reasons. But someone accepting a lift ticket at a ski resort (to use one example) I mean what would be the business basis to overpay for that position if the person you can hire is willing to accept the lower wage?Last thought is my saying ‘you can only be as honest as the competition’. If you are in a particular business and your competitors are operating one way then typically you need to operate in a similar way or you will (for lack of some compelling advantage and let’s face it you probably don’t have that) will go out of business. Yes there are exceptions but typically most users (business or consumer) do buy on price at least at scale.
Have you heard of Compagnie des Alpes? Owned ultimately by the French state. Imagine that in the US. Quite impossible.
Forgive my ignorance but is Park City same as Deer Valley? The “spare change” friends of mine spend at Deer Valley during holidays , seems like DV caters to every imaginable need…I wouldn’t know about #s of workers. (?)
Deer Valley is up the street from Park City the town. Park City ski resort merged with the Canyons Ski resort two years ago. Deer Valley is a separate entity and more than likely will remain so. It is in a trust that will not allow snowboarding on the mountain.
That’s so interesting not something that I thought about for so many years. Just read this based on your comment:https://en.wikipedia.org/wi…
“…that will not allow snowboarding”? Helmets? Carbon skis? Mobile phones? Cashless payment? Fun? Fear Valley.I wonder if splitboarding would penetrate their defences.
Truly a difficult problem. The more that we let markets and not regulations take care of it, the better off we will be. Too high a minimum wage, too expensive to hire. Too high workman’s comp rules, too expensive to hire. People like exclusivity, but when you change zoning to make real estate more exclusive the cost of housing skyrockets.I think resort areas have their own issues. We can’t get enough summer labor where I go in Minnesota and I suppose the same might hold true for a mountain ski resort. But, in places like San Francisco, change zoning laws and lots of housing would be built.The more we try to fix stuff with patches, edicts, blanket policy, the more screwed up it gets.Must have been absolutely beautiful with all that snow. I don’t ski and love the mountains in the summer.
We can’t get enough summer labor where I go in MinnesotaThis is no doubt true in any seasonal labor area and it makes sense. The only people that can work in those jobs would typically be:a) College students (and they tend to leave in mid August now so at least where I go it’s a ghost town after 2nd week in August).b) Students from overseas. Some larger local companies where I am would recruit from, say, Ireland and bring students in from a specific area (word spreads and makes hiring easier).I don’t think there is a practical way to solve this for seasonal work. What else could you do? I guess in theory you could recruit from other areas of the US and provide itinerant housing but that would take creativity on the part of the venues that need labor (so it could be done but people are typically not that creative in solutions).The more that we let markets and not regulationsIn the 80’s (and it is worse today) we had a labor department audit (they were located two blocks from our offices) and they found that we were not giving people the required amount of time for breaks. Now the interesting thing was you are not (at the time) required to give breaks. But if you did give breaks they had to be (iirc) 20 minutes. We were giving (iirc) 15 minutes. So a rabble rouser employee filed a complaint with the labor department which found it convenient to audit as it was only a short walk over. We were sued for something like $35k (in 1980’s dollars) and the lawsuit actually had Elizabeth Dole’s name on it. I managed to get it cut in half (I negotiated it down myself – no attorney involved after research at the Penn Law Library (total back in the day way you had to operate, eh?) and also got them to allow us to pay it out over 5 years (stuck that in after I got the agreement on the amount).$35k in 80’s dollars by my calc is $85k in today’s dollars. That all came out of my pocket directly. Money ended up being paid to the government which then disbursed it to the employees (iirc).And once again that was an 80’s regulation and from memory we got away with all sorts of things that you could never do today. Way more regulations out there not even close it was simple back then (also most things were under the radar obviously no internet, social media, bloggers and so on).
https://www.theguardian.com…Does Vail Resorts permit unionisation? Such a topical subject. Treat people like shit and what happens?
https://www.youtube.com/wat… https://www.nytimes.com/202…