Food and weed are inextricably entwined imaginations, naturally the same is true economically. After all, where goes legal weed, so goes McDonald’s sales. But it’s easy to forget marijuana is an illegal industry shifting to a legal one. We’re at the end of a prohibition and that is always going to create interesting new problems. When a state legalizes marijuana, it ripples across the entirety of the state, from the criminal justice system to, it turns out, fine dining.
Restaurants in Colorado are reporting a severe labor shortage, which they claim is thanks to legal marijuana. The Denver Post has a long piece about the struggles of the local restaurant industry, but the problem, fundamentally, is pretty simple. You can get paid more for less demanding work cutting bud, so why work in a kitchen?
Entry-level bud trimmers make $12-15 an hour, but speedy cutters can earn upward of $20, according to cannarecruiter.com. This compares with average of $12.83 per hour paid to line and prep cooks — still above minimum wage, but considering the physical demands of kitchen work, many people choose jobs that don’t require them to perform near-constant aerobic feats in a windowless, 90-degree room.
Colorado restauranteurs also note that low unemployment and rising business is a factor. But to some degree, saying the marijuana industry is to blame looks past what the entire restaurant industry has been unwilling to discuss for a while. Working the back of the house is a miserable, underpaying job, and a labor shortage was probably inevitable.
These labor problems are not new, and really date back decades. The spread of Chinese food in America is directly tied to immigration; the only job many Chinese immigrants were allowed to hold was in a restaurant. It’s estimated that 20% of back of house staff in the entire restaurant industry are undocumented immigrants. A one-day strike of both documented and undocumented immigrants in February 2017 caused problems up and down the restaurant industry from fine dining to fast food. And it’s no secret as to why: They’ll take less in wages up front, and in some cases, are easy targets for exploitation.
The counter-argument is that running a restaurant is a great way to lose money. Even successful restaurants usually run a margin of 2% to 6%, and since labor is the most expensive cost for any business, they have to limit that where they can. But by the same token, working in a kitchen is an incredibly hard job, an aerobic workout in a hot space in a high-stress environment. It’s not really hard to see why anybody who can take the job cutting bud is doing it.
Still, there is a point to be had here. It’s not really clear just how big the marijuana industry is — since weed dealers haven’t exactly filed decades worth of tax returns. But it’s safe to assume it’s bigger than anyone realized. Colorado alone has collected over $100 million a year in tax revenue and that’s slowly and steadily climbing. In Oregon, the Liquor Control Commission expected tax revenues of $10.7 million for 2016; the actual number was $60.2 million. It’s clear that there’s pent-up demand, and that people prefer to get their marijuana from a well-lit store than some dude who knows a dude who has a van.
As a legitimate industry blooms and begins looking for workers, it’s inevitably going to draw staff away from other industries, especially if the work is easier and pays better. How those industries decide to deal with new competition will be up to them, but in the end, the economics are simple. If you want workers, and you want to keep them, either you pay them what they’re willing to accept, or ultimately they’ll find somebody who will.
-By Dan Deitz, Uproxx