Category: reason

What is and Should Be the Role of Administrative Agencies in Developing Constitutional Rules and Norms?

I have a new article posted for download. The article addresses the boooming literature on “administrative constitutionalism,” i.e., the role of administrative agencies in influencing, creating, and establishing constitutional rules and norms, and
governing based on those rules and norms.

Here is an execerpt:

Progressives such as Metzger, Ross, and Bagenstos seem drawn to broad versions of administrative constitutionalism to evade what some would argue is the inherent conservatism of the American constitutional system. Yet history does not support the assumption that administrative constitutionalism inherently promotes progressive values. This article has already discussed several examples where administrative flexibility in applying “constitutional principles,” particularly with regard to race and ethnicity, has led to illiberal policy.

Recall this article’s definition of shadow administrative constitutionalism-—”a process of agency-norm entrepreneurship and entrenchment that occurs without public consultation, deliberation, and accountability.” Other examples of illiberalism being the outcome of this sort of administrative constitutionalism are easy to come by. Consider, for example, local government administrators who vigorously enforced their states’ anti-miscegenation laws, including making their own innovations
regarding who was covered by such laws and how their race could be ascertained. Or consider the bureaucrats who put various procedural and other obstacles in the way of Jewish refugees seeking to flee Nazi-occupied areas in the late 1930s, ensuring that even meager immigration quotes would not be filled. Or consider southern voting registrars who took pains to limit or prevent African-American voter registration in the South, or zoning officials and road planners who tried to ensure that segregated housing patterns would be entrenched. Or consider the federal immigration officials who expelled tens of thousands of Mexicans from the United States in the early 1930s, including some who had America citizenship. Or consider federal Indian policy undertaken by executive branch bureaucrats in the nineteenth century, which involved “detention of Native peoples without any avenue for redress, forced separation of Native families, criminalization of religious beliefs, and a violent ‘civilizing’ process of Native adults and children.” For most of American history race-related administrative constitutionalism was mostly neglectful of, and
sometimes outright hostile to, the rights and interests of minorities.

The lesson of history is not that administrative constitutionalism leads to “good” or “bad” results from any given ideological perspective, but
that administrative agencies will, like other political/governmental actors, act according to circumstances and incentives.

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Twitter Is Shifting to Remote Work. Will Other Firms Follow?

Is remote work the future? Many think so, but the companies that build the tools to allow remote work did not have their own robust capabilities for off-site employment until a pandemic forced their hand. Isn’t that interesting?

It’s true that Silicon Valley firms were among the first to take the big leap. While the leaders of major East Coast metropolises were telling city dwellers to live, laugh, and take the subways to jam-packed events, tech companies like Google, Microsoft, and Salesforce were telling employees to start working from home and cancel conferences and non-essential travel in early March.

The tech industry’s short-term experiment in remote work may extend to the indefinite future. Facebook and Google, for instance, recently announced that their originally months-long remote work plans will go on until the end of the year. Jack Dorsey’s Twitter, ever the dark horse, doubled down and announced last week that the company will permanently transition to a remote-first workplace.

This is big deal, though it got little attention in the mainstream news. Twitter is a huge company, and should its foray into an almost completely remote-first tech company prove successful, others will surely follow.

This has some people very excited. The dream of remote work never really panned out the way many in Silicon Valley might have hoped. The technologies that they developed would in theory allow employees to work from anywhere in the world. This would sever the need for people to uproot from preferred locations just to commute to an office every day, thereby expanding the possible pool of talent that any company could attract. Maybe COVID-19 will be just the kick in the rear that tech firms need to put their employees where their cloud is—everywhere.

Many implications follow. For starters, this would free tech workers from the expensive shackles of San Francisco real estate. No longer would young computer science grads be forced to pay several thousand dollars a month to have the privilege to live in a shoebox and ride company buses into luxurious campuses just to sit in front of a computer.

They could move to cheaper areas or even stay in their hometowns, keeping the bonds of family-of-origin and friendships intact, and remain a part of the fabric of these communities. The combination of stronger communities and lower cost of living could make it much easier for younger folks to affordably form their own families. Or maybe they would decide to strike it out as digital nomads, converting a van or a boat to live in exotic locales, or just flying about every few months. Whether attracted to roots or rootlessness, remote work gives employees more freedom and perhaps more dignity.

It might give a certain kind of employee just as much productivity, too, with a better quality of life. Salesforce recently surveyed a sample of the roughly 30 percent of the workforce that is currently working from home. Most people reported that they were about as productive as usual, and some even felt they were more productive. (As a longtime remote worker, I remember fondly those early days of hyper-productivity when I was released from the burden of constant meetings for the first time.)

Of course, this survey measures self-reporting. Without the risk of a colleague catching a glimpse of our multiple screens far down a Wikipedia rabbit hole, spending time understanding the contours of the Spanish claims to Alaska under the papal bull of 1493 may appear more directly justifiable in one’s role as, say, a technology analyst. As more companies invest in remote productivity surveillance technologies, employers will get a better idea of whether their employees’ perceptions match their own expectations.

Bigger cities could theoretically become more affordable. If knowledge workers are no longer forced to live in one of five big cities to make the big bucks, the political quagmire that prevents new housing supply could naturally become moot. With lower demand comes lower prices, assuming a fixed supply. Service and retail workers who saw much of their paychecks go to insane rental prices might get a little more breathing room (although this assumes their own employment is not jeopardized by a flight from the cities). Residential and commercial property owners who bought at the top of the market, on the other hand, would be clear losers.

Companies stand to benefit too. They might get away with paying new employees less since they would no longer need to subsidize the San Francisco area’s insane housing restrictions. Businesses could furthermore save money by not having to pay the full army of office managers, janitors, chefs, and other support staff that currently keep these palatial office parks running smoothly. Of course, this is bad news for the hardworking support staff that could find themselves out of work.

Remote also provides a way around immigration barriers. No longer would tech firms need to spend time and money lobbying Congress to protect or expand programs like H1-B that fast-track lower cost foreign programmers to move to the United States. They could simply hire them as remote workers—at least until this practice too became another political issue.

So why has it taken so long for Silicon Valley to use the tools they developed for others? It’s not because they’re stupid.

The financial analyst Byrne Hobart has a great run-down of the many reasons why firms have balked at a remote-first future despite the many apparent benefits. In addition to the distractability problem, there are obvious culture benefits to working in a physical office. People just like to feel like they are part of a team. It’s easier to build team morale with the kinds of spontaneous office hijinks and conversations that just can’t be scheduled through Zoom.

My husband and I are both remote workers: I started in the office for many years and moved off-site later, while my husband was hired by a remote-first company from the start. We both have different experiences with the comradery issue: I knew my team well at the time when I first moved, but it’s more difficult (though not impossible) to form relationships with new hires whom I have yet to meet—so I travel to the home office every so often mostly for socializing purposes. My husband’s company builds team spirit with quarterly retreats that pack in months’ worth of socializing into a week-long extravaganza. This works well in our experiences, and we are happy and productive in our remote-work world, but it might be more difficult to scale such scheduled socializing for a Google or a Facebook.

More cynically, the notoriously opulent campuses of big tech fixtures serve as a kind of golden spider’s web to keep employees clocking in for longer than they otherwise would because everything they need is already right there in Mountain View.

For these reasons, the future of remote work may only be quasi-remote—at least for major employers. Yes, knowledge economy workers who can do their job just as well at home may be free to live “anywhere.” But they might find that this “anywhere” is still pretty close to top tier American cities because they will be regularly called upon to visit satellite offices for some real life facetime.

The pandemic has already forced many firms to join the remote work revolution whether they liked it or not. This will undoubtedly create inertia and many businesses will find it makes more sense to keep some staff remote rather than expand their office footprints. Yet culture bonds are sticky and (for now) fairly physically-dependent.

The Silicon Valley dream of a fully decentralized workspace won’t come in the near future, as admirable as Twitter’s foray may be. No wonder virtual reality is the Next Big Thing in tech.

from Latest – Reason.com https://ift.tt/2TAMJAP
via IFTTT

Twitter Is Shifting to Remote Work. Will Other Firms Follow?

Is remote work the future? Many think so, but the companies that build the tools to allow remote work did not have their own robust capabilities for off-site employment until a pandemic forced their hand. Isn’t that interesting?

It’s true that Silicon Valley firms were among the first to take the big leap. While the leaders of major East Coast metropolises were telling city dwellers to live, laugh, and take the subways to jam-packed events, tech companies like Google, Microsoft, and Salesforce were telling employees to start working from home and cancel conferences and non-essential travel in early March.

The tech industry’s short-term experiment in remote work may extend to the indefinite future. Facebook and Google, for instance, recently announced that their originally months-long remote work plans will go on until the end of the year. Jack Dorsey’s Twitter, ever the dark horse, doubled down and announced last week that the company will permanently transition to a remote-first workplace.

This is big deal, though it got little attention in the mainstream news. Twitter is a huge company, and should its foray into an almost completely remote-first tech company prove successful, others will surely follow.

This has some people very excited. The dream of remote work never really panned out the way many in Silicon Valley might have hoped. The technologies that they developed would in theory allow employees to work from anywhere in the world. This would sever the need for people to uproot from preferred locations just to commute to an office every day, thereby expanding the possible pool of talent that any company could attract. Maybe COVID-19 will be just the kick in the rear that tech firms need to put their employees where their cloud is—everywhere.

Many implications follow. For starters, this would free tech workers from the expensive shackles of San Francisco real estate. No longer would young computer science grads be forced to pay several thousand dollars a month to have the privilege to live in a shoebox and ride company buses into luxurious campuses just to sit in front of a computer.

They could move to cheaper areas or even stay in their hometowns, keeping the bonds of family-of-origin and friendships intact, and remain a part of the fabric of these communities. The combination of stronger communities and lower cost of living could make it much easier for younger folks to affordably form their own families. Or maybe they would decide to strike it out as digital nomads, converting a van or a boat to live in exotic locales, or just flying about every few months. Whether attracted to roots or rootlessness, remote work gives employees more freedom and perhaps more dignity.

It might give a certain kind of employee just as much productivity, too, with a better quality of life. Salesforce recently surveyed a sample of the roughly 30 percent of the workforce that is currently working from home. Most people reported that they were about as productive as usual, and some even felt they were more productive. (As a longtime remote worker, I remember fondly those early days of hyper-productivity when I was released from the burden of constant meetings for the first time.)

Of course, this survey measures self-reporting. Without the risk of a colleague catching a glimpse of our multiple screens far down a Wikipedia rabbit hole, spending time understanding the contours of the Spanish claims to Alaska under the papal bull of 1493 may appear more directly justifiable in one’s role as, say, a technology analyst. As more companies invest in remote productivity surveillance technologies, employers will get a better idea of whether their employees’ perceptions match their own expectations.

Bigger cities could theoretically become more affordable. If knowledge workers are no longer forced to live in one of five big cities to make the big bucks, the political quagmire that prevents new housing supply could naturally become moot. With lower demand comes lower prices, assuming a fixed supply. Service and retail workers who saw much of their paychecks go to insane rental prices might get a little more breathing room (although this assumes their own employment is not jeopardized by a flight from the cities). Residential and commercial property owners who bought at the top of the market, on the other hand, would be clear losers.

Companies stand to benefit too. They might get away with paying new employees less since they would no longer need to subsidize the San Francisco area’s insane housing restrictions. Businesses could furthermore save money by not having to pay the full army of office managers, janitors, chefs, and other support staff that currently keep these palatial office parks running smoothly. Of course, this is bad news for the hardworking support staff that could find themselves out of work.

Remote also provides a way around immigration barriers. No longer would tech firms need to spend time and money lobbying Congress to protect or expand programs like H1-B that fast-track lower cost foreign programmers to move to the United States. They could simply hire them as remote workers—at least until this practice too became another political issue.

So why has it taken so long for Silicon Valley to use the tools they developed for others? It’s not because they’re stupid.

The financial analyst Byrne Hobart has a great run-down of the many reasons why firms have balked at a remote-first future despite the many apparent benefits. In addition to the distractability problem, there are obvious culture benefits to working in a physical office. People just like to feel like they are part of a team. It’s easier to build team morale with the kinds of spontaneous office hijinks and conversations that just can’t be scheduled through Zoom.

My husband and I are both remote workers: I started in the office for many years and moved off-site later, while my husband was hired by a remote-first company from the start. We both have different experiences with the comradery issue: I knew my team well at the time when I first moved, but it’s more difficult (though not impossible) to form relationships with new hires whom I have yet to meet—so I travel to the home office every so often mostly for socializing purposes. My husband’s company builds team spirit with quarterly retreats that pack in months’ worth of socializing into a week-long extravaganza. This works well in our experiences, and we are happy and productive in our remote-work world, but it might be more difficult to scale such scheduled socializing for a Google or a Facebook.

More cynically, the notoriously opulent campuses of big tech fixtures serve as a kind of golden spider’s web to keep employees clocking in for longer than they otherwise would because everything they need is already right there in Mountain View.

For these reasons, the future of remote work may only be quasi-remote—at least for major employers. Yes, knowledge economy workers who can do their job just as well at home may be free to live “anywhere.” But they might find that this “anywhere” is still pretty close to top tier American cities because they will be regularly called upon to visit satellite offices for some real life facetime.

The pandemic has already forced many firms to join the remote work revolution whether they liked it or not. This will undoubtedly create inertia and many businesses will find it makes more sense to keep some staff remote rather than expand their office footprints. Yet culture bonds are sticky and (for now) fairly physically-dependent.

The Silicon Valley dream of a fully decentralized workspace won’t come in the near future, as admirable as Twitter’s foray may be. No wonder virtual reality is the Next Big Thing in tech.

from Latest – Reason.com https://ift.tt/2TAMJAP
via IFTTT

Things Our Schoolteachers Told Us

For many of us, school consisted of a series of “You better nots”: You better not be late for class, you better not talk in class, and you better not do countless other things of the same ilk. English classes were more of the same: You better not end a sentence with a preposition and, even more ominously, you better keep your sentences short! Twenty words, perhaps. Thirty words at the most!

Somewhere between childhood and adulthood, our schoolteachers have jettisoned these admonitions; and today’s grammarians assure us that we can safely end sentences with prepositions and write long sentences. But where did these admonitions originate? Like many well-worn adages, they sprung from an intuitive appreciation for how we process written language.

For a half-century, psycholinguists have probed how we process words. Many of these probes involve how we read words starting and ending sentences. As we approach the end of a sentence, for example, our eyes move more slowly when a nearby period comes into focus. Psycholinguists call this the “wrap-up effect;” our eyes tell our brains that we need to slow down to make sure that we have processed what we just read before moving on.

Traditional grammarians lacked the benefit of these psycholinguistic contributions, but shared a common understanding for the importance of the closing words in a sentence. And the grammarians of our past recognized the folly of squandering this valuable space on meaningless prepositions.

What, then, was the springboard for the common refrain against lengthy sentences? Today’s psycholinguists tell us that most of us can store in short-term memory only a few chunks of information. Consider what happens when someone gives you several telephone numbers. You might remember a few, but cap out quickly.

Our schoolteachers presumably didn’t know about the budding field of psycholinguistics, but they knew about their own difficulties in remembering lengthy passages. From these difficulties, our schoolteachers surmised that short sentences would ease the reader’s burden.

We now know, though, that lengthy sentences can be just as easy to recall as shorter sentences. Consider Martin Luther King, Jr.’s stirring Letters from a Birmingham Jail. These letters include a single sentence spanning over 300 words, cataloguing a series of injustices. Though the sentence is long, the injustices unfold in twelve discrete chunks. As each chunk comes, the reader’s eyes quicken as they approach the climax: “When you are forever fighting a degenerating sense of ‘nobodiness’—then you will understand why we find it difficult to wait.” King’s message is impossible to miss or forget, despite the length, because the message comes in discrete, manageable chunks.

Freed of arbitrary word limits, masterful orators learned that they could brandish a particular point by weaving short sentences among longer ones. Consider Winston Churchill’s effort to unity Britons against the German threat:

You ask, what is our policy? I say it is to wage war by land, sea, and air. War with all our might and with all the strength God has given us, and to wage war against a monstrous tyranny never surpassed in the dark and lamentable catalogue of human crime. That is our policy.

You ask, what is our aim? I can answer in one word. It is victory.

Churchill’s three- and four-word sentences echo because they follow longer sentences. Like King, Churchill realized that readers could easily understand a relatively long sentence. With that length came an opportunity to burnish his message through short, powerful climaxes.

So when you consider your school days, don’t shun what your teachers told you. Just consider the wisdom that underlay those admonitions. It’s still not a good idea to be late for class. And if you wax poetic for a while, remember that long sentences can still overtax the reader’s memory unless the information comes in manageable chunks.

With these chunks of information, you might not match Churchill’s ability to inspire the masses. But if you aim to create a rhythm and slow the readers’ eyes when they zoom in on the focal point of your argument, perhaps you can try mixing long and short sentences. It might just spell victory.

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Ghost Kitchens Can Help Feed New Yorkers While the City Is a Ghost Town

During the restaurant boom of the 2010s, blue states and cities loaded unfunded mandates onto eateries. (In New York City, the government website lists approximately 32 different state and city permits, registrations, and mandates.) Then COVID-19 shut down an estimated 40 percent of restaurants nationwide. The industry suddenly faced sales losses of $80 billion, and two-thirds of its employees across the country were thrown out of work. The regulatory load only increases the likelihood that a restaurant will stay closed and cooks or waiters will lose their jobs permanently.

Some employees might not get their jobs back even if the restaurant reopens. Rising costs could push more places to remake themselves as ghost kitchens—places that cook solely for delivery with no in-house seating.

Restaurants are high-risk and low-margin. About 20 percent fail in their first year, 60 percent by year five. Profit margins range from 1 to 10 percent. The typical restaurant can’t survive more than a few weeks without profit. Even before COVID-19, full-service restaurants were losing market share to lower-service formats, which increasingly replaced servers with touchscreen and app-based ordering. As of last year, the market research consultant NPD reports, carry-out, drive-through, and delivery sales accounted for 48 percent of restaurant revenues.

New York City, with its long working hours and commutes, has long been a robust take-out and delivery market. In such high-cost cities, ghost kitchens were already on the rise. This business model eliminates the need for expensive street frontage and lets the cooks offer multiple cuisines from a single kitchen. While a typical restaurant spends 30 percent of revenue on labor, a ghost kitchen spends only 10 percent.

COVID-19 is likely to accelerate the trend—especially coming on the heels of higher regulatory compliance costs. Thirty-three jurisdictions (states, counties, and cities) will require at least a $15 minimum wage by the end of 2020 (with some lower minimums for tipped employees). Seven states have mini-Worker Adjustment and Retraining Notification Act (WARN) Acts (requiring at least 60 days’ notice to employees before a place of business is shut down) more stringent than the federal requirement. Predictive scheduling laws require employers in seven jurisdictions to give up to two weeks’ notice of schedule changes. Eight states (plus the District of Columbia) have paid family leave. Thirty-three jurisdictions have paid sick leave. And new laws in 10 jurisdictions require additional COVID-19 leave.

Seven jurisdictions are subject to at least five of those mandates. San Francisco and New York City are subject to all six. (San Francisco is slightly better off: California Gov. Gavin Newsom has partially and temporarily waived the state’s mini-WARN Act.) In New York City, paid safe and sick leave extends to care for any individual whose close association with the employee is the equivalent of family; paid family leave extends to leave for unregistered domestic partners. With these open-ended, fact-intensive definitions, it will be too expensive for employers to contest even doubtful claims for leave. The Wall Street Journal reports that some lawyers were advising New York City restaurants to fire all their employees before they became liable under the new leave requirements.

Even apart from mandates, reopening restaurants will face pressure on their slender profit margins. The National Restaurant Association’s COVID-19 reopening guidelines will require revamped operations, including radically reduced seating capacity (50 or even 25 percent), sanitizing schedules (which will limit the number of turns per table), employee health monitoring, and investments in contactless technology. Many restaurateurs anticipate plexiglass sneeze guards for coffee bars and employee protective gear.

Between those necessary changes and the inevitable pandemic-era decline in dining out, COVID-19 was already guaranteed to cripple the industry. Restaurants and the people who work there shouldn’t have to deal with high regulatory compliance costs too. If officials don’t ease the burden, a lot of these businesses will die—or will persist only as ghosts.

from Latest – Reason.com https://ift.tt/2ZfxlgJ
via IFTTT

Things Our Schoolteachers Told Us

For many of us, school consisted of a series of “You better nots”: You better not be late for class, you better not talk in class, and you better not do countless other things of the same ilk. English classes were more of the same: You better not end a sentence with a preposition and, even more ominously, you better keep your sentences short! Twenty words, perhaps. Thirty words at the most!

Somewhere between childhood and adulthood, our schoolteachers have jettisoned these admonitions; and today’s grammarians assure us that we can safely end sentences with prepositions and write long sentences. But where did these admonitions originate? Like many well-worn adages, they sprung from an intuitive appreciation for how we process written language.

For a half-century, psycholinguists have probed how we process words. Many of these probes involve how we read words starting and ending sentences. As we approach the end of a sentence, for example, our eyes move more slowly when a nearby period comes into focus. Psycholinguists call this the “wrap-up effect;” our eyes tell our brains that we need to slow down to make sure that we have processed what we just read before moving on.

Traditional grammarians lacked the benefit of these psycholinguistic contributions, but shared a common understanding for the importance of the closing words in a sentence. And the grammarians of our past recognized the folly of squandering this valuable space on meaningless prepositions.

What, then, was the springboard for the common refrain against lengthy sentences? Today’s psycholinguists tell us that most of us can store in short-term memory only a few chunks of information. Consider what happens when someone gives you several telephone numbers. You might remember a few, but cap out quickly.

Our schoolteachers presumably didn’t know about the budding field of psycholinguistics, but they knew about their own difficulties in remembering lengthy passages. From these difficulties, our schoolteachers surmised that short sentences would ease the reader’s burden.

We now know, though, that lengthy sentences can be just as easy to recall as shorter sentences. Consider Martin Luther King, Jr.’s stirring Letters from a Birmingham Jail. These letters include a single sentence spanning over 300 words, cataloguing a series of injustices. Though the sentence is long, the injustices unfold in twelve discrete chunks. As each chunk comes, the reader’s eyes quicken as they approach the climax: “When you are forever fighting a degenerating sense of ‘nobodiness’—then you will understand why we find it difficult to wait.” King’s message is impossible to miss or forget, despite the length, because the message comes in discrete, manageable chunks.

Freed of arbitrary word limits, masterful orators learned that they could brandish a particular point by weaving short sentences among longer ones. Consider Winston Churchill’s effort to unity Britons against the German threat:

You ask, what is our policy? I say it is to wage war by land, sea, and air. War with all our might and with all the strength God has given us, and to wage war against a monstrous tyranny never surpassed in the dark and lamentable catalogue of human crime. That is our policy.

You ask, what is our aim? I can answer in one word. It is victory.

Churchill’s three- and four-word sentences echo because they follow longer sentences. Like King, Churchill realized that readers could easily understand a relatively long sentence. With that length came an opportunity to burnish his message through short, powerful climaxes.

So when you consider your school days, don’t shun what your teachers told you. Just consider the wisdom that underlay those admonitions. It’s still not a good idea to be late for class. And if you wax poetic for a while, remember that long sentences can still overtax the reader’s memory unless the information comes in manageable chunks.

With these chunks of information, you might not match Churchill’s ability to inspire the masses. But if you aim to create a rhythm and slow the readers’ eyes when they zoom in on the focal point of your argument, perhaps you can try mixing long and short sentences. It might just spell victory.

from Latest – Reason.com https://ift.tt/2TgKq5y
via IFTTT

Ghost Kitchens Can Help Feed New Yorkers While the City Is a Ghost Town

During the restaurant boom of the 2010s, blue states and cities loaded unfunded mandates onto eateries. (In New York City, the government website lists approximately 32 different state and city permits, registrations, and mandates.) Then COVID-19 shut down an estimated 40 percent of restaurants nationwide. The industry suddenly faced sales losses of $80 billion, and two-thirds of its employees across the country were thrown out of work. The regulatory load only increases the likelihood that a restaurant will stay closed and cooks or waiters will lose their jobs permanently.

Some employees might not get their jobs back even if the restaurant reopens. Rising costs could push more places to remake themselves as ghost kitchens—places that cook solely for delivery with no in-house seating.

Restaurants are high-risk and low-margin. About 20 percent fail in their first year, 60 percent by year five. Profit margins range from 1 to 10 percent. The typical restaurant can’t survive more than a few weeks without profit. Even before COVID-19, full-service restaurants were losing market share to lower-service formats, which increasingly replaced servers with touchscreen and app-based ordering. As of last year, the market research consultant NPD reports, carry-out, drive-through, and delivery sales accounted for 48 percent of restaurant revenues.

New York City, with its long working hours and commutes, has long been a robust take-out and delivery market. In such high-cost cities, ghost kitchens were already on the rise. This business model eliminates the need for expensive street frontage and lets the cooks offer multiple cuisines from a single kitchen. While a typical restaurant spends 30 percent of revenue on labor, a ghost kitchen spends only 10 percent.

COVID-19 is likely to accelerate the trend—especially coming on the heels of higher regulatory compliance costs. Thirty-three jurisdictions (states, counties, and cities) will require at least a $15 minimum wage by the end of 2020 (with some lower minimums for tipped employees). Seven states have mini-Worker Adjustment and Retraining Notification Act (WARN) Acts (requiring at least 60 days’ notice to employees before a place of business is shut down) more stringent than the federal requirement. Predictive scheduling laws require employers in seven jurisdictions to give up to two weeks’ notice of schedule changes. Eight states (plus the District of Columbia) have paid family leave. Thirty-three jurisdictions have paid sick leave. And new laws in 10 jurisdictions require additional COVID-19 leave.

Seven jurisdictions are subject to at least five of those mandates. San Francisco and New York City are subject to all six. (San Francisco is slightly better off: California Gov. Gavin Newsom has partially and temporarily waived the state’s mini-WARN Act.) In New York City, paid safe and sick leave extends to care for any individual whose close association with the employee is the equivalent of family; paid family leave extends to leave for unregistered domestic partners. With these open-ended, fact-intensive definitions, it will be too expensive for employers to contest even doubtful claims for leave. The Wall Street Journal reports that some lawyers were advising New York City restaurants to fire all their employees before they became liable under the new leave requirements.

Even apart from mandates, reopening restaurants will face pressure on their slender profit margins. The National Restaurant Association’s COVID-19 reopening guidelines will require revamped operations, including radically reduced seating capacity (50 or even 25 percent), sanitizing schedules (which will limit the number of turns per table), employee health monitoring, and investments in contactless technology. Many restaurateurs anticipate plexiglass sneeze guards for coffee bars and employee protective gear.

Between those necessary changes and the inevitable pandemic-era decline in dining out, COVID-19 was already guaranteed to cripple the industry. Restaurants and the people who work there shouldn’t have to deal with high regulatory compliance costs too. If officials don’t ease the burden, a lot of these businesses will die—or will persist only as ghosts.

from Latest – Reason.com https://ift.tt/2ZfxlgJ
via IFTTT