Austin Beerworks is a brewery in Austin, Texas, that was founded in 2011. It manufactures, packages, and sells beer to local retail stores, bars, and restaurants; it also serves beer in its own taproom, along with a menu of burgers, tacos, and nachos prepared by the brewery’s own food truck. The past year has been a roller coaster: in March, 2020, at the beginning of the pandemic, the company shut down the taproom and food truck and furloughed seven employees. “It was the hardest thing we’ve ever had to do as business owners,” one of Austin Beerworks’ co-founders, Michael Graham, told me recently. “We felt helpless. Events were totally out of our control, and there was no way to plan for the future. It was extremely difficult.”
They were able to hire some of those people back a few weeks later to work on the wholesale side of the business, which remained strong as people stuck at home started buying more at grocery and convenience stores. Still, it was difficult to navigate the shifting regulations and lockdown orders, and the taproom was reopened and closed again several times. The company was able to survive, in part, owing to the help of a Paycheck Protection Program loan, and because of savings it had accumulated for a down payment on a piece of land where the brewery had planned to expand before the pandemic. On March 2nd, Texas’s governor, Greg Abbott, lifted all mask mandates and restrictions on indoor dining in the state, and vaccines started to become more widely available. “Those together seemed to give people the general confidence and optimism to start going out again,” Graham said. “In that first week, we sold more kegs than we sold in the previous year.”
On March 6th, Congress passed the American Rescue Plan, a $1.9 trillion economic-aid package that included enhanced unemployment benefits, which many Americans were already receiving from previous rescue bills. The plan provides three hundred dollars a week, down from the prior six hundred dollars, in addition to unemployment-insurance payments available in each state, and lasts until the end of September. For some people, the weekly total comes out to the same amount of money they would make working forty hours a week for fifteen dollars an hour.
Over the following few months, business picked up across the country. By April, some areas were experiencing worker shortages, particularly in the leisure and hospitality industries. “Help Wanted” signs at restaurants started going viral on social media. “Due to the stimulus money and tax time, people just do not want to work,” one posted in an Outback Steakhouse window in Memphis, which was photographed and posted to Twitter, read. Another image that was shared widely, on May 9th, showed a homemade sign printed on the window of a Chipotle’s branch: “Want to know why we are closed?” it read. “We are overworked, understaffed, underpaid, and underappreciated. Almost the entire management and crew have walked out until further notice.”
Were the worker shortages a sign that federal benefits were too generous, leading workers to choose to stay out of the workforce and collect unemployment insurance rather than finding a job? Or were the two things disconnected? A debate erupted along predictably partisan lines, with many Republicans and business groups arguing that the unemployment supplement was harming the job market. Republican governors of at least twenty-two states announced that they were opting out of the enhanced benefits for their residents in order to “encourage people to work . . . instead of paying people not to work,” as the governor of Arizona, Doug Ducey, put it. The governor of Wyoming, Mark Gordon, said that paying people not to work was “just plain un-American.”
Enrique Lopezlira, the director of the Low-Wage Work Program, at U.C. Berkeley, told me that the real answer is complicated, particularly during a pandemic. Some workers are taking care of children or elderly relatives, while others may have health concerns about returning to work, particularly if the job involves interacting with the public and doesn’t offer paid sick leave. “Typically, where you have a labor market that has excess demand for workers, what’s needed is for employers to raise wages,” Lopezlira said. In economics, he explained, the “reservation wage” is the wage at which a worker will choose to accept a particular job rather than not work. “The reservation wage has changed for some of these workers.”
Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute, noted that, typically, labor shortages translate into higher wages. The hospitality and leisure industry saw some of the most precipitous declines in wages during the pandemic; wages are only now approaching where they would have been if the pandemic hadn’t happened. “Many of these jobs in restaurants and hospitality are unambiguously worse than they used to be,” Shierholz said. “You have to deal with anti-maskers and there are health risks. If the market is functioning well, and a job gets harder and riskier, wages should go up.” According to Shierholz, supplemental unemployment insurance was “not driving things,” but had probably contributed to some of the wage growth that we’ve seen in the past few months. She believes this is a good thing. “They are helping the labor market to run better by making it possible for workers to not have to take a really shitty job at suppressed wages because they have no other option.”
The managers of Austin Beerworks inadvertently waded into this debate in early May, when the company posted an online job listing about an open bartender position. The job included benefits such as health care, paid vacation and sick days, and 401k matching, which Graham says they offer to all of their employees. They received sixty applications, and every applicant with whom they scheduled an interview showed up. Noticing all the debate about unemployment on social media, Graham shared a Facebook post about their experience: “We’re seeing lots of posts about how nobody wants to work right now. Just wanted to share our experience,” he wrote, before relaying the response they’d received. “People want good work.”
A vigorous argument broke out in the comments section, which Graham says he was not expecting. “I don’t think unemployment being the competition to business is going to end well,” a user called James Morrison posted. “The end result is people who are capable of working, not working. That isn’t sustainable.” Other posters accused Graham of bragging while many local businesses were struggling to make ends meet and couldn’t offer salary increases. “I just wanted to put another data point out there,” Graham told me. “I wish I could kind of rephrase some of the things—it did come across as patting ourselves on the back.”
Many of the responses were positive, though. People from across the country pledged to visit Austin Beerworks if they ever came to Austin. One commenter, Kyle Herrage, offered a little historical context by quoting F.D.R., in 1933: “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
