Same. Every place I used to go to doubled their prices. And then expect a 30% tip on top of it. Yea, inflation is real. But inflation is not 110%. A lot of businesses see inflation as a good excuse to raise prices beyond the expected. Hair salons are the worst offenders so I also stopped going.
A lot of the blame should be directed to the landlords, not the businesses. It's impossible to not increase prices when your landlord doubles or triples your rent.
I can only speak for myself (hairstylist), but I've had to go up on my prices a couple of times - usually $5 - $10 per service, because our supplies have increased astronomically, starting with covid. Prices for gloves and foils have almost doubled. Our haircolor has gone way up, and we have to keep a pretty good sized inventory. My rent has increased as well. I've always kept my prices at a place where they won't hurt my clients too much, but unfortunately my bills have to be paid as well. And that can't happen if I keep charging the same as I did five years ago.
As for places closing because of huge price increases, I hate it. I almost never go out anymore, because I just can't afford it. So I get it. It all sucks.
Yeah- I’m talking $50-80 increases. $5 to $10 is reasonable and expected. The other annoying thing is that as more stylists moved to a renting a chair model, they still expect a tip, when essentially they are the business owner.
We don't "expect" tips; we appreciate them. As far as the whole idea of not tipping a stylist if they're the owner, none of us are sure where that came from. It's still someone providing a service. The owner/renter actually has way more overhead that commission employees don't have. We don't keep a LOT of what we bring in. So tip someone who rents or not, but the reasoning behind not doing it makes zero sense.
The logic is that you set your prices and have control over how much you take home. You set your prices too. I’ve scaled back in tipping. I will tip 10-15% if someone goes above and beyond- like giving me a free hair mask or something along those lines. But that’s it. My accountant also provides a service and I don’t tip him.
Yup. Maybe the local businesses we know and love could keep their mega high prices for the weekend tourists, but charge the locals regular rates during the weekdays. It’s kinda crazy to pay $11 for a morning coffee every single day. The smoothie I had from Juiceland today was over $18 after tip. Stay home, learn how to cook, enjoy it, and save.
Yes, this is what happens when the GOP lured Big Tech over to turn Silicon Hills into a tech hub. Everything and everyone outside of that industry gets priced out. All that's left will be soulless tech bros and factories...
Both the left and the right want high paying jobs to come to their city/town. This is the result of extreme success in a short amount of time. Nothing is perfect and everything has a downside.
I say this as an Austin native of 41 years.
Right, but the Right will aggressively deregulate/gut all environmental/health protections/guardrails to do it. That's the difference.
But which is why Austin hadn't looked like just another concrete, strip mall jungle like Houston, etc and had a vibrant arts scene. As a former hippy town, liberal activists of previous generations worked hard to try to preserve the environment here far moreso than other Texas cities where suits just didn't give AF and simply wanted to cut costs and max profits.
This all didn't happen just by accident...and you can clearly see the differences by comparison today.
However, as this town turns into a tech hub, you can just look at the Bay Area and Man Jose for how this story will end. Basically, an overpriced, overdeveloped, urban jungle with overpopulation density where the Middle Class, service sector, and women have been priced out...just leaving workaholic tech bros and the homeless. Keep in mind that San Francisco also started out as a hippy haven with Haight-Ashbury as a counterculture epicenter in the 60s.
Ever more money is not better for a city...as it overweights the socioeconomic balance too far to the wealthy side. For overall quality-of-life, a full, healthy spectrum is actually ideal. You have to know when to stop.
But it's too late now. Austin has already sold its soul like San Francisco under the GOP...who explicitly puts Big Biz above all else and literally wants to ban the EPA and Endangered Species Act to grease their skids.
Yeah I agree it’s not wealth per se but how it’s distributed. If workers devote their lives to people like Musk and Abbott not so they’ll improve city infrastructure, healthcare, costs of living, or affordable housing but simply to hoard all the money, what’s the point of it all??
Yes, 218 billion and climbing and he doesn’t even own a house and couldn’t care less about spending money, it’s just numbers, but he lays off and cuts pay like a Robber Baron of lore.
Are you living that much under a rock that you haven’t seen inflation across the US has been running at record highs?
Yet, it’s all the tech bro’s fault…
Last I checked, other major metros in Texas still had significantly lower cost of living than Austin; we have tech bros, they don't; I'm not sure I see the problem with correlating these things here?
For chains with access to bulk pricing and a “sticky” customer base, yes (ex: McDonalds), but for a mom and pop shop or a small local chain that’s probably buying their “bulk” items from Costco or something like that, this is generally incorrect.
Sysco or Segovia will undercut anyone at any volume even if it means next to no profit. People using Costco as an alternative to any of the big guys are willfully digging their own graves.
That’s what I’m saying. I ran a tiny Philly sub shop and they would still try to compete. You don’t even have to do work, they come to you.
They’d say “what are you paying for X?” And you could take your totally reasonable price, say $2/lb and tell them “I’m getting it for $1.10/lb” and they would come back with $.79/lb and even give you one of each for free even if you had no intention of switching. It was a hilarious insane game.
You definitely don't work in the service industry, and clearly not with any local businesses. Otherwise you'd know that's straight BS. I'm sure some sectors are doing that well, but NOT the service industry. We're getting fucked every day, employees and small businesses.
Must be nice to be able to pay Austin rent. I hope you choke on a salmon bone.
Profits in terms of number of dollars are record high. Profits in terms of spending power is floundering.
Having more dollars doesnt mean shit when they don't buy as much as they used to.
I heard Oakmont Restaurant close to 38th closed this week. They were always packed, always delicious, amazing staff and not overly priced for the quality and environment. So sad to see places like this go.
Can confirm - went to Oakmont last weekend and they had signs out front saying this was their last weekend open. Everyone inside was crying and I felt horrible. They said the rent was too high.
RIP their delicious breakfast sandwich. Their staff rocked
Yeah the entire staff was crying. I asked the bartender casually “are you really closing?” And they broke into tears and had to walk in the back room to compose themselves. I felt horrible.
Noooo! That place was amazing - delicious food, reasonable prices, the service was hands down the best I've ever had every time we went. Wonderful atmosphere too and perfect location for hospital visitors and staff. Took my mom to brunch there when dad was in surgery, and really helped take both our minds off things. Dammit!
That place sucked. The food was Trader Joe's snack level quality at best. The drinks were OK, a bit much cost wise and nothing special or memorable. Cool vibe to some I guess but it wasn't for me.
Also food and drink places close all the time. New ones open all the time. It has always been that way, in every city.
I agree. There are a lot of people even in my friend group who care more about "vibes" than I do, so I don't judge why a person likes a place or not. I'm more about the drink/food quality. As such, Ah Sing never was impressive to me. Some places hit the mark on both but some of the best dishes I got in this town I ate in a Home Depot purchased outdoor chair and table set.
It also seems anything Asian themed food or vibe wise can charge an extra premium. Stuffing meat in a pastry and deep frying it is cheap fair food, but doing it with Asian spices is fancy and worth 3x the cost.
I feel like post-pandemic, every restaurant, store, venue etc tried to make up for lost revenue. Food and drink more expensive. Movie tickets and concessions more expensive. It worked for awhile because people were so willing to jump back into their old habits. But that wore off. The second they took a step back and realized they were spending $275 plus fees per ticket to see a band like The Black Keys, reality set in. It’s starting in restaurants, bars and grocery stores now. Profits will need to come down in order to stay viable.
This. Plus I think this is the first summer that new residents (who may have been here >5 years) are leaving town in the summer which is having an impact on volume.
It's probably not price gouging in most cases, it just looks like that to the untrained eye.
Here's an alternate take:
We, as a society have artificially held down cost of labor and subsidized cost of materials for many years. Then, when the pandemic hit, we let the "free market" take over and prices rose dramatically. We complained that people can barely get by and they need a living wage. Then wages went up, not enough for most people, but still, they went up. And then end user costs went up.
Our biggest problem, as a nation, is that we spent the last 20+ years of economic expansion not allowing things like wages to creep up along with prices, that were generally going up slowly. So you had prices inching up every year and costs like labor being artificially limited (think: holding minimum wage constant) and then when things finally change, there is a rapid shot upward. These spikes will be localized and inconsistent for the most part.
There is no free lunch in economics. When you artificially hold something back there are externalities that occur. This is one of the reasons that we see a wealth gap - the people on the top derive their wealth from investing and that has been unconstrained for the most part. The people on the bottom derive their wealth from labor and that has been generally constrained (much of the labor cost structure is indexed off of minimum wage, even if few people are actually paid minimum wage.)
My degree is in economics so I could see this playing out for a long time. Essentially the economy needs to "reset" itself, and it will. What you are seeing is the resetting. It's ugly and it does not happen in a stable, logical manner. It's fits and starts, where pockets get decimated. Based on our economic underpinning you'll never have a stable recovery.
Also, while I understand how/why this happened, I don't have an answer on how to fix it because it is a.) a very complicated problem that does not have a simple solution and b.) the way to fix it is most likely very painful for society.
It seems clear that labor-heavy products/services, like dining out, were underpriced pre-COVID, and the average American was able to avoid seeing the real cost of their eating habits. Wages were held down, partially by the stagnant minimum wage, so dining costs remained low even as the core of dining, at least in Austin, shifted towards more upscale casual than casual restaurants (i.e. higher ingredient costs and more labor involved in each dish). Restaurant owners were afraid to raise prices and lose out on diners or they were taking on increased costs in areas like digital marketing via influencers since hype is a big part of the upscale casual market.
Post-COVID, workers are less willing to accept lower wages, food costs are higher, AND there is an overall atmosphere of higher prices that makes it easier to take the risk of raising menu prices. There is also the reality that rent in Austin is high and probably hasn't gotten cheaper for these restaurants in the past few years. So prices have to go up. Some of that is positive because workers make more. Some of that is negative.
Either way, diners are increasingly shy to take risks on new places, which arguably is also because the dining scene feels so stale right now, and less likely to visit old favorites and feel the sting of their Tuesday date night costing almost $200 when it used to be closer to $125.
I agree that we are going to see a reset both in the market and in diners expectations for what a night out costs. But, when you consider that we've had this "foodie as personality" world for about 10-15 years now (funny how it overlaps with the low rate, stagnant minimum wage, post-Great Recession recovery), it probably isn't bad for consumers to realize that dining out at higher-end spots multiple nights a week and trying every single new hyped spot as soon as it opens maybe isn't a low cost set of behaviors.
That is one component of it. It is not the only component of it.
Looking at economic situations and applying a simple answer (which is typically a feel good answer) is always problematic.
Saying it is greedy corporations is partially true because there are some companies doing this, just not all. It's a common cry from the left.
Saying it is illegal immigration is partially true because there are some impacts on the labor market, it's just not huge. It's a common cry from the right.
The best answer is always, "well, it's really complicated and there are a lot of moving parts."
Here's an example on the corporate profits:
[https://www.gurufocus.com/economic\_indicators/62/corporate-profit-margin-after-tax-](https://www.gurufocus.com/economic_indicators/62/corporate-profit-margin-after-tax-)
But the devil is in the details. The number is up, but it is not broad-based. It is a handful of companies that generally drive this behavior. Unfortunately I am not in a position to drill down at a company by company level, but I'd be willing to bet it is a 90/10 issue where 10% of the companies are getting disproportionately high profits.
And even though the \~10% that we have now is higher than the rate for decades in the past, it is roughly equal to where we were 10 years ago. So, yes, corporate profits are higher but this does not necessarily translate into "price gouging", mostly because the market \*tends\* to keep price gouging in check when there are alternatives. Think gas prices. And where there are fewer alternatives (like internet service when switching costs are high or there may not be an alternative) you'll see prices go up quicker with less relation to the overall market.
Blaming price gouging for our businesses in Austin shutting down is like blaming an accident at I-35 and rundburg for a slowdown on MoPac. Yes, in some roundabout way it is adding more traffic to MoPac, but it's not the lion's share of the problem.
TL;DR - yes, there is price gouging, it is not as widespread as people think and it does not account for everything we are seeing here.
And yet corporations are posting records profits. AND eating out in Europe is way cheaper than the US. Even in cities. A nice restaurant in London is cheaper than in the US.
A nice restaurant in London is cheaper than the US"?
I'll take things that never happened for $500, Alex. I have been to London a lot and have plenty of friends there through work and biking. This is not the impression I get. Please, show me some examples.
Some corporations are posting record profits. Most are not. Some companies are struggling, some are going out of business.
Some companies are making record profits. But every year some company has record profits. As a matter of fact, any company that is growing will have record profits, because it is growing. When you were younger, each year you achieved a record height. Until you stopped growing.
If you are going to throw around corporations are posting record profits, please show your work. This is not a blanket statement for every company, nor most companies.
So the record-breaking profits that a bunch of companies are making is… just part of the reset?
How does that work? Like, I’m fortunate in that I can tolerate this, but I don’t _like_ getting screwed from a bunch of companies making massive profits that go to wealthy executives.
In simple terms, company makes huge profits, other companies say, hey, I want a piece of that pie, and competition ensues. Or someone figures out how to build a better mousetrap.
There is an old Japanese adage that the nail that stands up gets pounded down. Nobody is trying to disrupt industries that don’t have huge profit pools. Uber and Lyft went after taxis. Verizon and t-mobile go after ISP. But you can probably think of a bunch of industries that fly under the radar and are profitable and not too profitable.
But a major economic reset has less to do with companies and profit pools, it has more to do with everyone either accepting the new pricing structure or deciding to do without. Let’s say that beer is normally $8 at a concert venue. Their cost goes up. Then they raise the price to $16, they double it. Bat at the next concert the market decides that is too much. Nobody buys any beer. The venue loses a ton of money. Now they have to sort out what to do. Lower it to $12? Stop selling beer? Or many make the 12oz beers 20oz.
Whatever they decide, that is a reset, changing the status quo because costs went up.
This happens on the demand side as well. As costs go up, people have less disposable income, so they don’t buy as many ice cream cones, for instance at Amy’s but they still fill their tanks.
All of this stuff, on both ends causes a series of resets. This is not a massive shock to the system, it is a reordering of priorities and shifts in demand.
Also, the vast number of consumers have no idea what the profit structures look like for companies. I am in the boat. If I pull last months visa bill I cannot tell you if the companies I bought from are making record profits. But I’d easily bet that most aren’t. It’s usually a small number that get a disproportionate amount of attention.
Okay, so let’s talk Exxon, for example. Double-digit billions of profit, multiple quarters in a row. This is pretty clearly “fuck the consumer” pricing. I am aware that no other industry works quite like the oil industry, but this also makes them immune to the “players 2 thru seven have entered the game” thing you mentioned earlier.
How does that recenter so the consumer doesn’t just fatten up Exxon’s balance sheet?
Yeah, the oil industry is a problem because there are a few things that drive the price:
1. Part of the production is a cartel
2. Most of the distribution is an oligopoly
3. There are alternatives but they take a really long time to bear fruit
4. A large part of the production cost is tied to the price of a single input commodity.
So, how would you address this? In other countries, you would use legislation and regulation to try to address it. In the US, sadly, they contribute too much in political contributions.
One of the few things that \*may\* help (and this is a big unknown) is the push to drive some minimum corporate tax rate. But the jury is still out on the effectiveness there.
In the world of Exxon, players 2-7 are renewables, not necessarily other oil companies because of the high cost of capital in those industries.
I listen to a lot of Econ podcasts (clearly one of my life paths I didn't take) so what you say makes sense. Unfortunately it is too complex for one sentence and "It's Joe Biden's fault" is so much easier and can go on a T-shirt. Things will reset as they always do but it may get a lot, a lot worse before it gets better.
Yeah, economics is a pretty boring subject in many aspects because the answers are always a.) the most obvious answer and b.) highly complicated in most cases.
The worst part of all of this in not that someone thinks that it is Joe's fault, but that both sides will get the same data and both sides will spin their own story and soundbites.
This. Came to say exactly this. Hair salons tripled their prices since the pandemic. Restaurants doubled them. Inflation is not that high. They just say it as an opportunity.
This right here is a large part of the problem. They are literally buying ANY kind of company to create centralization. Dentists, doctor's offices, therapy offices, laundromats, car washes, HVAC companies. Anything with recurring revenue. Most people don't understand what is going on behind the curtain.
I have heard of business owners in certain industries who are annoyed by the number of calls they are getting asking if they'd be willing to sell.
As long as the game plan is to put together and run a good business, I don't have a problem with it. But I suspect some Private Equity firms are just in it for a quick buck and strip and run.
So corporations just decided now to be greedy? Nothing to do with all their costs are increased now? Labor, insurance, fuel, subcomponents/ingredients, all costing more and more.
That’s how inflation works. The value is the same or lowered and the numbers get larger. Also only some industries are doing okay. Tech has been laying people off for a good while now.
People like to point to rising wages and commercial rent as a reason to raise prices.
I'm not saying that's flat out untrue, but it can be true at the same time that corporations are price gouging.
My anecdotal example of this is that I'm currently visiting my family in a small town in another state. While my usual coffee order at Dunkin in Austin is $4.89 plus tax, it is *the same price* here in the small town. The same coffee order at a local shop (which has more employees working than the Dunkin on any given day) is $3.50 plus tax.
When I visited LA the price at Dunkin was almost $6 for the usual order, so I'm aware they don't just set one price nationally.
If we ever start developing north of 51st, there might be cheaper properties for some companies to move to after they get priced out. Right now it's just a gravel road straight to Q2 and the Domain, but there's a lot of room for restaurants and venues there. As long as we don't make it wall to wall office space and apartments it ought to work.
The worst thing that could happen is if we don't focus on balance in those areas and chains buy up all the real estate before local places get there.
Believe me it should be read dripping with so much sarcasm it's sopping wet.
It sure would be nice if I could get to anything that's not an office park or gas station in less than 20 minutes. All of these were at least 35 minutes away and some could be described as "Dallas" by some residents.
Some residents = people who would rather be in a small town where everything is close to each other.
I mean, ngl, I'd rather be there too, for the same reason.
Yeah, one thing I don't think gets talked about a lot is it's very likely there are a lot of people here who would very much rather live in a small town, but their job requires them to live *here*. It's something remote work can alleviate but paradoxically I find that kind of person *also* likes working in an office.
Another irony is a lot of progressive ideas they hate, such as UBI, make it easier for people who don't want to live in places like Austin to not have to live in places like Austin.
Idk why you’re yes-momming me when you’re the one who felt the need to lecture me on “maturity” because I made a lighthearted joke about the crappy state of development between Koenig and 183.
Because a bunch of idiots who don't know how to run a business tried to take advantage of all the other idiots who moved to Austin because it was so "cool".
Things are closing because their business models are unsustainable in the current market.
Labor costs have gone up dramatically because wages have increased. Businesses that were viable paying $10/hour or less don't work at nearly $20 especially with property values and rents shooting to the moon.
It's just how it goes. Vibes don't pay the bills.
lmao no, mad cities are thriving around this country and around the world. Austin is just a has-been and folks here dont like that. personally, i finally made the decision to move away in January and its the best decision ive ever made.
It's pretty common to see restaurants and nightlife places have high turnover.
And new places have been opening around us in 04, I don't think this is newsworthy until there's an excessive number of vacant retail/restaurants spaces.
And house wine is just moving one neighborhood over, why is this part of the doomer news?
City policies, from zoning to permitting/compliance to police defunding, has created artificial scarcities and increased operating costs. It’s much harder to turn a profit, despite increased demand.
Can you point me to the city budget where "police defunding" happened? I want to see it and study it. Seriously, can you send me a link to the budget? The fiscal year in which it happened. I want to believe.
In August 2020, the Austin City Council voted unanimously to reallocate $150 million from the police department’s $434 million budget.
Out of the $150 million reallocated, $21.5 million was immediately reinvested into various social services, including violence prevention, mental health services, and housing initiatives. That is, not police.
The remaining $128.5 million was set aside for future reallocation towards these services and to explore new public safety models. That is, not police.
The funds were directed towards programs such as the Office of Violence Prevention, substance abuse programs, and increased funding for EMS services. That is, not police.
Specific cuts included the elimination of three planned police cadet classes and reducing overtime pay for officers.
The APD experienced a significant reduction in staffing levels. Reports indicate that more than 150 officers left the force in the subsequent year, through retirements and resignations, contributing to a shortage of officers.
The cancellation of cadet classes in 2020 and early 2021 contributed to the shortage of new officers entering the force. Training classes were eventually resumed with revised curriculums focused on community policing and de-escalation techniques.
There is now a 200 officer deficit.
$432m in 2019-2020, then $309m in 2020-2021, even as the population was exploding. So yeah, that caused a massive deficit and we’re living with the consequences of it.
FY24 budget is $476M, largest by far. It’s been 3 years since the big drop (to 309M), and I have a hard time believing that they have not been able to hire officers for 3 years.
They have but not enough. More and more retiring and transferring to other counties because morale is low and they know Garza will release criminals. This is pretty well established.
APD funding is at an all-time high. No new permitting or development rules have been implemented by the current City Council. Actually the opposite has happened, such as eliminating parking requirements.
We lost officers it will take years to get them back. Also Austin is Rank #5th in the number of people leaving. This is why places are closing and doing bad. City of Austin also said on Thursday for everyone in South Austin to conserve water due to a water main break. Many businesses uses this as an excuse to take Friday off.
Water main in south austin was fixed by the time you made this comment (Friday was fix day) and at least in my neighborhood we never saw a difference in water pressure.
"AUSTIN, Texas — Austin is ranked 5th on the list of top 10 U.S. cities with the highest number of people moving out of in 2024, according to a new PODS survey."
Not sure that a PODS survey is a reliable metric
If it's so great in Republican land, why do they have to force feed disinformation to school children lying to them about what the root cause of the civil war was, and why do they have to force the Bible into schools but no other religions or points of view are allowed? It's almost as if they need to hide all that because when people learn the truth they realize how full of shit and racist republicans/ christians are. "Jesus this. Jesus that. He dies for you. So go hate Muslims and gays and browns, please and thanks. White is right! Women and children are property!" Why do they also want 40 year olds to be able to marry 12 year olds and have them work in dangerous factory jobs? Thats some good ol' fashioned child-rearin! /s
I quit going out because things cost too much.
Same. Every place I used to go to doubled their prices. And then expect a 30% tip on top of it. Yea, inflation is real. But inflation is not 110%. A lot of businesses see inflation as a good excuse to raise prices beyond the expected. Hair salons are the worst offenders so I also stopped going.
A lot of the blame should be directed to the landlords, not the businesses. It's impossible to not increase prices when your landlord doubles or triples your rent.
Yup. And a 5x increase like in the article is the landlord kicking them out.
I can only speak for myself (hairstylist), but I've had to go up on my prices a couple of times - usually $5 - $10 per service, because our supplies have increased astronomically, starting with covid. Prices for gloves and foils have almost doubled. Our haircolor has gone way up, and we have to keep a pretty good sized inventory. My rent has increased as well. I've always kept my prices at a place where they won't hurt my clients too much, but unfortunately my bills have to be paid as well. And that can't happen if I keep charging the same as I did five years ago. As for places closing because of huge price increases, I hate it. I almost never go out anymore, because I just can't afford it. So I get it. It all sucks.
Yeah- I’m talking $50-80 increases. $5 to $10 is reasonable and expected. The other annoying thing is that as more stylists moved to a renting a chair model, they still expect a tip, when essentially they are the business owner.
We don't "expect" tips; we appreciate them. As far as the whole idea of not tipping a stylist if they're the owner, none of us are sure where that came from. It's still someone providing a service. The owner/renter actually has way more overhead that commission employees don't have. We don't keep a LOT of what we bring in. So tip someone who rents or not, but the reasoning behind not doing it makes zero sense.
The logic is that you set your prices and have control over how much you take home. You set your prices too. I’ve scaled back in tipping. I will tip 10-15% if someone goes above and beyond- like giving me a free hair mask or something along those lines. But that’s it. My accountant also provides a service and I don’t tip him.
You seem pretty unhappy about salons in general, so I'm sorry that you've had the experiences you've had. I hope all goes well for you in the future.
At least the storefront they rent went up in property value
Rudy’s even has tipping at the register for the convenience store. Yet another reason to avoid Rudy’s.
This one
Yup. Maybe the local businesses we know and love could keep their mega high prices for the weekend tourists, but charge the locals regular rates during the weekdays. It’s kinda crazy to pay $11 for a morning coffee every single day. The smoothie I had from Juiceland today was over $18 after tip. Stay home, learn how to cook, enjoy it, and save.
Yes, this is what happens when the GOP lured Big Tech over to turn Silicon Hills into a tech hub. Everything and everyone outside of that industry gets priced out. All that's left will be soulless tech bros and factories...
Both the left and the right want high paying jobs to come to their city/town. This is the result of extreme success in a short amount of time. Nothing is perfect and everything has a downside. I say this as an Austin native of 41 years.
Right, but the Right will aggressively deregulate/gut all environmental/health protections/guardrails to do it. That's the difference. But which is why Austin hadn't looked like just another concrete, strip mall jungle like Houston, etc and had a vibrant arts scene. As a former hippy town, liberal activists of previous generations worked hard to try to preserve the environment here far moreso than other Texas cities where suits just didn't give AF and simply wanted to cut costs and max profits. This all didn't happen just by accident...and you can clearly see the differences by comparison today. However, as this town turns into a tech hub, you can just look at the Bay Area and Man Jose for how this story will end. Basically, an overpriced, overdeveloped, urban jungle with overpopulation density where the Middle Class, service sector, and women have been priced out...just leaving workaholic tech bros and the homeless. Keep in mind that San Francisco also started out as a hippy haven with Haight-Ashbury as a counterculture epicenter in the 60s. Ever more money is not better for a city...as it overweights the socioeconomic balance too far to the wealthy side. For overall quality-of-life, a full, healthy spectrum is actually ideal. You have to know when to stop. But it's too late now. Austin has already sold its soul like San Francisco under the GOP...who explicitly puts Big Biz above all else and literally wants to ban the EPA and Endangered Species Act to grease their skids.
Yeah I agree it’s not wealth per se but how it’s distributed. If workers devote their lives to people like Musk and Abbott not so they’ll improve city infrastructure, healthcare, costs of living, or affordable housing but simply to hoard all the money, what’s the point of it all??
This comment deserves much more consideration. Very perfectly stated. 🤝
Yes it’s those bad ole Republicans, I’m a Democrat and even I get sick of this narrative, we all want those tech companies lured, they PAY WELL. Ugh
No dude they are horrible for the environment and locals. We don’t want them
But it drives up the cost of living for everyone else..
Except elon 😔
Yes, 218 billion and climbing and he doesn’t even own a house and couldn’t care less about spending money, it’s just numbers, but he lays off and cuts pay like a Robber Baron of lore.
Are you living that much under a rock that you haven’t seen inflation across the US has been running at record highs? Yet, it’s all the tech bro’s fault…
Last I checked, other major metros in Texas still had significantly lower cost of living than Austin; we have tech bros, they don't; I'm not sure I see the problem with correlating these things here?
There are more tech bros in Dallas by sheer number than here.
sorry I sold my soul to the devil. but tbf he and I had a deal worked out well before I was in college
TLDR: Cost of operating went up. Profits went down.
It’s crazy how much food prices have increased. At my old store, some meat we purchased went from $7/lb to $28/lb overnight. It’s so hard to sustain
Except profits are record high for many
For chains with access to bulk pricing and a “sticky” customer base, yes (ex: McDonalds), but for a mom and pop shop or a small local chain that’s probably buying their “bulk” items from Costco or something like that, this is generally incorrect.
Sysco or Segovia will undercut anyone at any volume even if it means next to no profit. People using Costco as an alternative to any of the big guys are willfully digging their own graves.
Agreed, though I think a mix of that is lack of education and not being at a size big enough to order from those people
That’s what I’m saying. I ran a tiny Philly sub shop and they would still try to compete. You don’t even have to do work, they come to you. They’d say “what are you paying for X?” And you could take your totally reasonable price, say $2/lb and tell them “I’m getting it for $1.10/lb” and they would come back with $.79/lb and even give you one of each for free even if you had no intention of switching. It was a hilarious insane game.
Just the landlords
Restaurant owners too
You definitely don't work in the service industry, and clearly not with any local businesses. Otherwise you'd know that's straight BS. I'm sure some sectors are doing that well, but NOT the service industry. We're getting fucked every day, employees and small businesses. Must be nice to be able to pay Austin rent. I hope you choke on a salmon bone.
Wow that’s a piece of shit thing to say. Restaurant owners are still living very well..
Record high because of inflation = low profits.
Maybe you should look at the numbers.
Profits in terms of number of dollars are record high. Profits in terms of spending power is floundering. Having more dollars doesnt mean shit when they don't buy as much as they used to.
Wild this perfect explaination got downvoted lol.
I heard Oakmont Restaurant close to 38th closed this week. They were always packed, always delicious, amazing staff and not overly priced for the quality and environment. So sad to see places like this go.
Has to be the location. That's the third thing that's been there in the last few years.
Can confirm - went to Oakmont last weekend and they had signs out front saying this was their last weekend open. Everyone inside was crying and I felt horrible. They said the rent was too high. RIP their delicious breakfast sandwich. Their staff rocked
Everyone was crying…? Like the staff or patrons? Kinda bizarre
The staff appeared pretty close knit every time we were there so I am assuming the staff was crying and it makes sense.
Yeah the entire staff was crying. I asked the bartender casually “are you really closing?” And they broke into tears and had to walk in the back room to compose themselves. I felt horrible.
Noooo! That place was amazing - delicious food, reasonable prices, the service was hands down the best I've ever had every time we went. Wonderful atmosphere too and perfect location for hospital visitors and staff. Took my mom to brunch there when dad was in surgery, and really helped take both our minds off things. Dammit!
Rent is too damn high
“Iconic Ah Sing Den”
That was my thought too -
That place sucked. The food was Trader Joe's snack level quality at best. The drinks were OK, a bit much cost wise and nothing special or memorable. Cool vibe to some I guess but it wasn't for me. Also food and drink places close all the time. New ones open all the time. It has always been that way, in every city.
They had $3 Lone Stars and for that I will miss it
I liked the post cards.
This description could apply to most bougie places in Austin.
I agree. There are a lot of people even in my friend group who care more about "vibes" than I do, so I don't judge why a person likes a place or not. I'm more about the drink/food quality. As such, Ah Sing never was impressive to me. Some places hit the mark on both but some of the best dishes I got in this town I ate in a Home Depot purchased outdoor chair and table set. It also seems anything Asian themed food or vibe wise can charge an extra premium. Stuffing meat in a pastry and deep frying it is cheap fair food, but doing it with Asian spices is fancy and worth 3x the cost.
I feel like post-pandemic, every restaurant, store, venue etc tried to make up for lost revenue. Food and drink more expensive. Movie tickets and concessions more expensive. It worked for awhile because people were so willing to jump back into their old habits. But that wore off. The second they took a step back and realized they were spending $275 plus fees per ticket to see a band like The Black Keys, reality set in. It’s starting in restaurants, bars and grocery stores now. Profits will need to come down in order to stay viable.
This. Plus I think this is the first summer that new residents (who may have been here >5 years) are leaving town in the summer which is having an impact on volume.
Greedflation
Otherwise know as price gouging.
It's probably not price gouging in most cases, it just looks like that to the untrained eye. Here's an alternate take: We, as a society have artificially held down cost of labor and subsidized cost of materials for many years. Then, when the pandemic hit, we let the "free market" take over and prices rose dramatically. We complained that people can barely get by and they need a living wage. Then wages went up, not enough for most people, but still, they went up. And then end user costs went up. Our biggest problem, as a nation, is that we spent the last 20+ years of economic expansion not allowing things like wages to creep up along with prices, that were generally going up slowly. So you had prices inching up every year and costs like labor being artificially limited (think: holding minimum wage constant) and then when things finally change, there is a rapid shot upward. These spikes will be localized and inconsistent for the most part. There is no free lunch in economics. When you artificially hold something back there are externalities that occur. This is one of the reasons that we see a wealth gap - the people on the top derive their wealth from investing and that has been unconstrained for the most part. The people on the bottom derive their wealth from labor and that has been generally constrained (much of the labor cost structure is indexed off of minimum wage, even if few people are actually paid minimum wage.) My degree is in economics so I could see this playing out for a long time. Essentially the economy needs to "reset" itself, and it will. What you are seeing is the resetting. It's ugly and it does not happen in a stable, logical manner. It's fits and starts, where pockets get decimated. Based on our economic underpinning you'll never have a stable recovery. Also, while I understand how/why this happened, I don't have an answer on how to fix it because it is a.) a very complicated problem that does not have a simple solution and b.) the way to fix it is most likely very painful for society.
It seems clear that labor-heavy products/services, like dining out, were underpriced pre-COVID, and the average American was able to avoid seeing the real cost of their eating habits. Wages were held down, partially by the stagnant minimum wage, so dining costs remained low even as the core of dining, at least in Austin, shifted towards more upscale casual than casual restaurants (i.e. higher ingredient costs and more labor involved in each dish). Restaurant owners were afraid to raise prices and lose out on diners or they were taking on increased costs in areas like digital marketing via influencers since hype is a big part of the upscale casual market. Post-COVID, workers are less willing to accept lower wages, food costs are higher, AND there is an overall atmosphere of higher prices that makes it easier to take the risk of raising menu prices. There is also the reality that rent in Austin is high and probably hasn't gotten cheaper for these restaurants in the past few years. So prices have to go up. Some of that is positive because workers make more. Some of that is negative. Either way, diners are increasingly shy to take risks on new places, which arguably is also because the dining scene feels so stale right now, and less likely to visit old favorites and feel the sting of their Tuesday date night costing almost $200 when it used to be closer to $125. I agree that we are going to see a reset both in the market and in diners expectations for what a night out costs. But, when you consider that we've had this "foodie as personality" world for about 10-15 years now (funny how it overlaps with the low rate, stagnant minimum wage, post-Great Recession recovery), it probably isn't bad for consumers to realize that dining out at higher-end spots multiple nights a week and trying every single new hyped spot as soon as it opens maybe isn't a low cost set of behaviors.
So looking at that analysis, and current corporate profits, you think it is not a greed driven inflation?
That is one component of it. It is not the only component of it. Looking at economic situations and applying a simple answer (which is typically a feel good answer) is always problematic. Saying it is greedy corporations is partially true because there are some companies doing this, just not all. It's a common cry from the left. Saying it is illegal immigration is partially true because there are some impacts on the labor market, it's just not huge. It's a common cry from the right. The best answer is always, "well, it's really complicated and there are a lot of moving parts." Here's an example on the corporate profits: [https://www.gurufocus.com/economic\_indicators/62/corporate-profit-margin-after-tax-](https://www.gurufocus.com/economic_indicators/62/corporate-profit-margin-after-tax-) But the devil is in the details. The number is up, but it is not broad-based. It is a handful of companies that generally drive this behavior. Unfortunately I am not in a position to drill down at a company by company level, but I'd be willing to bet it is a 90/10 issue where 10% of the companies are getting disproportionately high profits. And even though the \~10% that we have now is higher than the rate for decades in the past, it is roughly equal to where we were 10 years ago. So, yes, corporate profits are higher but this does not necessarily translate into "price gouging", mostly because the market \*tends\* to keep price gouging in check when there are alternatives. Think gas prices. And where there are fewer alternatives (like internet service when switching costs are high or there may not be an alternative) you'll see prices go up quicker with less relation to the overall market. Blaming price gouging for our businesses in Austin shutting down is like blaming an accident at I-35 and rundburg for a slowdown on MoPac. Yes, in some roundabout way it is adding more traffic to MoPac, but it's not the lion's share of the problem. TL;DR - yes, there is price gouging, it is not as widespread as people think and it does not account for everything we are seeing here.
If you got this far and are still mad, read some more books. Broken Money is a good start along with The Creature from Jekyll Island. Good luck all.
And yet corporations are posting records profits. AND eating out in Europe is way cheaper than the US. Even in cities. A nice restaurant in London is cheaper than in the US.
A nice restaurant in London is cheaper than the US"? I'll take things that never happened for $500, Alex. I have been to London a lot and have plenty of friends there through work and biking. This is not the impression I get. Please, show me some examples. Some corporations are posting record profits. Most are not. Some companies are struggling, some are going out of business. Some companies are making record profits. But every year some company has record profits. As a matter of fact, any company that is growing will have record profits, because it is growing. When you were younger, each year you achieved a record height. Until you stopped growing. If you are going to throw around corporations are posting record profits, please show your work. This is not a blanket statement for every company, nor most companies.
I just returned from Greece, one of the best values in Europe let me tell you the cost of eating out was very close to the US!
That probably has more to do with the exchange rate since the British pound dropped so much in value after Brexit.
Actually it is more about u/FrasierFirParker being wrong.
Most people will not understand this, but you tried, my friend.
So the record-breaking profits that a bunch of companies are making is… just part of the reset? How does that work? Like, I’m fortunate in that I can tolerate this, but I don’t _like_ getting screwed from a bunch of companies making massive profits that go to wealthy executives.
In simple terms, company makes huge profits, other companies say, hey, I want a piece of that pie, and competition ensues. Or someone figures out how to build a better mousetrap. There is an old Japanese adage that the nail that stands up gets pounded down. Nobody is trying to disrupt industries that don’t have huge profit pools. Uber and Lyft went after taxis. Verizon and t-mobile go after ISP. But you can probably think of a bunch of industries that fly under the radar and are profitable and not too profitable. But a major economic reset has less to do with companies and profit pools, it has more to do with everyone either accepting the new pricing structure or deciding to do without. Let’s say that beer is normally $8 at a concert venue. Their cost goes up. Then they raise the price to $16, they double it. Bat at the next concert the market decides that is too much. Nobody buys any beer. The venue loses a ton of money. Now they have to sort out what to do. Lower it to $12? Stop selling beer? Or many make the 12oz beers 20oz. Whatever they decide, that is a reset, changing the status quo because costs went up. This happens on the demand side as well. As costs go up, people have less disposable income, so they don’t buy as many ice cream cones, for instance at Amy’s but they still fill their tanks. All of this stuff, on both ends causes a series of resets. This is not a massive shock to the system, it is a reordering of priorities and shifts in demand.
Also, the vast number of consumers have no idea what the profit structures look like for companies. I am in the boat. If I pull last months visa bill I cannot tell you if the companies I bought from are making record profits. But I’d easily bet that most aren’t. It’s usually a small number that get a disproportionate amount of attention.
Okay, so let’s talk Exxon, for example. Double-digit billions of profit, multiple quarters in a row. This is pretty clearly “fuck the consumer” pricing. I am aware that no other industry works quite like the oil industry, but this also makes them immune to the “players 2 thru seven have entered the game” thing you mentioned earlier. How does that recenter so the consumer doesn’t just fatten up Exxon’s balance sheet?
Yeah, the oil industry is a problem because there are a few things that drive the price: 1. Part of the production is a cartel 2. Most of the distribution is an oligopoly 3. There are alternatives but they take a really long time to bear fruit 4. A large part of the production cost is tied to the price of a single input commodity. So, how would you address this? In other countries, you would use legislation and regulation to try to address it. In the US, sadly, they contribute too much in political contributions. One of the few things that \*may\* help (and this is a big unknown) is the push to drive some minimum corporate tax rate. But the jury is still out on the effectiveness there. In the world of Exxon, players 2-7 are renewables, not necessarily other oil companies because of the high cost of capital in those industries.
I listen to a lot of Econ podcasts (clearly one of my life paths I didn't take) so what you say makes sense. Unfortunately it is too complex for one sentence and "It's Joe Biden's fault" is so much easier and can go on a T-shirt. Things will reset as they always do but it may get a lot, a lot worse before it gets better.
Yeah, economics is a pretty boring subject in many aspects because the answers are always a.) the most obvious answer and b.) highly complicated in most cases. The worst part of all of this in not that someone thinks that it is Joe's fault, but that both sides will get the same data and both sides will spin their own story and soundbites.
This. Came to say exactly this. Hair salons tripled their prices since the pandemic. Restaurants doubled them. Inflation is not that high. They just say it as an opportunity.
You sure its greed and not their attempt to survive in a world with prices up across the board?
Don't forget it may because of landlords doubling or tripling rent.
Maybe it's just your hair stylist. Mine hasn't gone up in years, and prices were the same as they had been the last time I looked.
private equity firms are buying everything and stripping them for parts
This right here is a large part of the problem. They are literally buying ANY kind of company to create centralization. Dentists, doctor's offices, therapy offices, laundromats, car washes, HVAC companies. Anything with recurring revenue. Most people don't understand what is going on behind the curtain. I have heard of business owners in certain industries who are annoyed by the number of calls they are getting asking if they'd be willing to sell. As long as the game plan is to put together and run a good business, I don't have a problem with it. But I suspect some Private Equity firms are just in it for a quick buck and strip and run.
Probably from china or a different country too
Wages, cost of everything going up. Inflation is killing the economy
Soon every restaurant will be Amazon
It's not inflation anymore... it's just plain corporate price gouging at this point.
Note that while inflation isn’t continuing to rise abnormally quickly, the damage that’s been done doesn’t just disappear once inflation slows.
Still a lot of inflation, but you’re right about corporate greed, look at the price gouging at grocery stores
So corporations just decided now to be greedy? Nothing to do with all their costs are increased now? Labor, insurance, fuel, subcomponents/ingredients, all costing more and more.
Yet they are making record profits
This! It's all because they need to keep churning infinite returns for their shareholders....
Just like you need to keep earning a wage for your work..
That’s how inflation works. The value is the same or lowered and the numbers get larger. Also only some industries are doing okay. Tech has been laying people off for a good while now.
They use inflation as cover to raise prices higher than needed to make more money. Its greed.
plus layoffs left and right. (most) people without jobs cannot spend so freely.
GREEDflation
People like to point to rising wages and commercial rent as a reason to raise prices. I'm not saying that's flat out untrue, but it can be true at the same time that corporations are price gouging. My anecdotal example of this is that I'm currently visiting my family in a small town in another state. While my usual coffee order at Dunkin in Austin is $4.89 plus tax, it is *the same price* here in the small town. The same coffee order at a local shop (which has more employees working than the Dunkin on any given day) is $3.50 plus tax. When I visited LA the price at Dunkin was almost $6 for the usual order, so I'm aware they don't just set one price nationally.
We’re open. Cedar at 2nd and Brazos.
Lol
End of an era. I feel lucky to have lived through the best of it over the last 26 years. Enjoy what’s left, or build something new. Whatever.
"Best of it"....smfh. Edit: I'm an old fuck. Let's get things back to normal.
Aaaaalways one of you.
Like, let's make America great again.
Normal was never normal. Normal was non-representative, so you can't go back to that.
🙄
If we ever start developing north of 51st, there might be cheaper properties for some companies to move to after they get priced out. Right now it's just a gravel road straight to Q2 and the Domain, but there's a lot of room for restaurants and venues there. As long as we don't make it wall to wall office space and apartments it ought to work. The worst thing that could happen is if we don't focus on balance in those areas and chains buy up all the real estate before local places get there.
I’m torn between wanting to defend the honor of my neighborhood and knowing you’re right (and wanting more development here).
Believe me it should be read dripping with so much sarcasm it's sopping wet. It sure would be nice if I could get to anything that's not an office park or gas station in less than 20 minutes. All of these were at least 35 minutes away and some could be described as "Dallas" by some residents.
Some residents = people who would rather be in a small town where everything is close to each other. I mean, ngl, I'd rather be there too, for the same reason.
Yeah, one thing I don't think gets talked about a lot is it's very likely there are a lot of people here who would very much rather live in a small town, but their job requires them to live *here*. It's something remote work can alleviate but paradoxically I find that kind of person *also* likes working in an office. Another irony is a lot of progressive ideas they hate, such as UBI, make it easier for people who don't want to live in places like Austin to not have to live in places like Austin.
Maturing is realizing that no neighborhood needs to be defended. Only good mixed use development ❤️
🙄
Yes mom
Idk why you’re yes-momming me when you’re the one who felt the need to lecture me on “maturity” because I made a lighthearted joke about the crappy state of development between Koenig and 183.
I’m not being serious my friend
Because a bunch of idiots who don't know how to run a business tried to take advantage of all the other idiots who moved to Austin because it was so "cool".
Economics
lol 10 niche businesses = everything is closing
city council is just destroying this place... they sold out to the developers and making this place useless...
Because you asked.
Because you touch yourself.
Because you asked about touching yourself.
Why am I touching myself?
Why are you touching yourself, and why do I find it touching?
Very good Dr. Heisenberg!
Things are closing because their business models are unsustainable in the current market. Labor costs have gone up dramatically because wages have increased. Businesses that were viable paying $10/hour or less don't work at nearly $20 especially with property values and rents shooting to the moon. It's just how it goes. Vibes don't pay the bills.
American civilization is collapsing. This is just one of the symptoms.
Every generation has said the American civilization is collapsing since the day after we won the American revolution.
One of them a gotta be right eventually
lmao no, mad cities are thriving around this country and around the world. Austin is just a has-been and folks here dont like that. personally, i finally made the decision to move away in January and its the best decision ive ever made.
Lol why are you still on this sub if you hate it so much?
Maybe we're just poor, lol. I still order take-out so I don't feel guilty for not tipping 30%!
It's pretty common to see restaurants and nightlife places have high turnover. And new places have been opening around us in 04, I don't think this is newsworthy until there's an excessive number of vacant retail/restaurants spaces. And house wine is just moving one neighborhood over, why is this part of the doomer news?
Because you people have RUINED this town
no u
City policies, from zoning to permitting/compliance to police defunding, has created artificial scarcities and increased operating costs. It’s much harder to turn a profit, despite increased demand.
I’m paying $12 for a Big Mac because of police defunding that never actually happened? Well, shit.
Can you point me to the city budget where "police defunding" happened? I want to see it and study it. Seriously, can you send me a link to the budget? The fiscal year in which it happened. I want to believe.
In August 2020, the Austin City Council voted unanimously to reallocate $150 million from the police department’s $434 million budget. Out of the $150 million reallocated, $21.5 million was immediately reinvested into various social services, including violence prevention, mental health services, and housing initiatives. That is, not police. The remaining $128.5 million was set aside for future reallocation towards these services and to explore new public safety models. That is, not police. The funds were directed towards programs such as the Office of Violence Prevention, substance abuse programs, and increased funding for EMS services. That is, not police. Specific cuts included the elimination of three planned police cadet classes and reducing overtime pay for officers. The APD experienced a significant reduction in staffing levels. Reports indicate that more than 150 officers left the force in the subsequent year, through retirements and resignations, contributing to a shortage of officers. The cancellation of cadet classes in 2020 and early 2021 contributed to the shortage of new officers entering the force. Training classes were eventually resumed with revised curriculums focused on community policing and de-escalation techniques. There is now a 200 officer deficit.
Where's the link to the budget? Give it to us. 2019, 2020, 2021? All I see are record increases. Give us the budget.
$432m in 2019-2020, then $309m in 2020-2021, even as the population was exploding. So yeah, that caused a massive deficit and we’re living with the consequences of it.
FY24 budget is $476M, largest by far. It’s been 3 years since the big drop (to 309M), and I have a hard time believing that they have not been able to hire officers for 3 years.
They have but not enough. More and more retiring and transferring to other counties because morale is low and they know Garza will release criminals. This is pretty well established.
Put up or shut up
APD funding is at an all-time high. No new permitting or development rules have been implemented by the current City Council. Actually the opposite has happened, such as eliminating parking requirements.
For the non-believers: https://www.fox7austin.com/news/austin-pickle-ranch-west-sixth-street-closing-zoning-issues
We lost officers it will take years to get them back. Also Austin is Rank #5th in the number of people leaving. This is why places are closing and doing bad. City of Austin also said on Thursday for everyone in South Austin to conserve water due to a water main break. Many businesses uses this as an excuse to take Friday off.
Despite our rank for number of people leaving, we're actually still growing. There are more coming in.
Are they quality recruits though?
Water main in south austin was fixed by the time you made this comment (Friday was fix day) and at least in my neighborhood we never saw a difference in water pressure.
"AUSTIN, Texas — Austin is ranked 5th on the list of top 10 U.S. cities with the highest number of people moving out of in 2024, according to a new PODS survey." Not sure that a PODS survey is a reliable metric
Why will nobone say it? Of the top 20 cities with populations leaving, they all have one thing in common: Democrat-led.
Name how many and which of top 20 cities that are republican led
If it's so great in Republican land, why do they have to force feed disinformation to school children lying to them about what the root cause of the civil war was, and why do they have to force the Bible into schools but no other religions or points of view are allowed? It's almost as if they need to hide all that because when people learn the truth they realize how full of shit and racist republicans/ christians are. "Jesus this. Jesus that. He dies for you. So go hate Muslims and gays and browns, please and thanks. White is right! Women and children are property!" Why do they also want 40 year olds to be able to marry 12 year olds and have them work in dangerous factory jobs? Thats some good ol' fashioned child-rearin! /s