Left Behind in the Back of the House…

The minimum wage hike that was approved by voters in Nov 2014 was the final nail in the coffin of our sister restaurant The Abbot’s Cellar and we said as much at the time (even if it was misspoken and/or misunderstood). To be fair, at that point the coffin had a fair amount of nails in it already (I can tackle those subjects another day), but we foresaw that the passage of Proposition J (Minimum Wage Ordinance) would squeeze the industry over the next few years and force a lot of closings. We decided to get out early and get back to the bedrock of The Monk’s Kettle.   The greatest tragedy of it all however was that due to the Ordinance’s language and implementation, the problem of wage inequality would be exacerbated rather than solved.

When you ask a server or bartender how much they made on a certain shift, they will usually give you a number: how much they made in tips for the day. However, that server/bartender is leaving out their hourly wage. When you ask a cook or dishwasher, they will calculate their hours and multiply it by their hourly wage. The entirety of a cook’s compensation is that which was left out of a server/bartender’s assessment. And this exposes the huge disparity of income between front and back of the house employees that is real and is damaging. Servers and bartenders generally make about three times that of their counterparts in the kitchen and current policies ensure that this will continue.

Cooks’ wages have always been higher than minimum wage and they need to be in order to survive in this area. For context, the monthly salary of a minimum wage earner (at the current $13/hr) is about $2250, while the median monthly rent of a 1-bedroom apt is around $3500. The market rate for cooks has hovered a few bucks over the minimum wage and hasn’t changed all that much over the years. It may have gone up more (especially as living costs in the area have risen) but owners’ ability to increase it have been hampered by other rising costs, including the minimum wage hike that is blind to the not-insignificant income some restaurant employees receive from gratuities.

I want to make clear here that we do not begrudge anyone’s income. And to be even clearer: we are not against a higher minimum wage. In fact, we would like to see a living wage for all our employees. We feel the Minimum Wage Ordinance did not properly tackle the problem of the low wages of the kitchen workers, the lowest wage earners, where it should have been aimed. A hike in the minimum wage increases the wage of those who are already making minimum wage: in reality, those making “minimum wage” are those also making tips, those employees who already have the highest income. Any wage gain for the kitchen (already making a higher-than-minimum-wage) has been done voluntarily and at the mercy of individual restaurants’ financial ability to do so. This is where we need a solution that addresses the problem at hand.

We propose minimum wage reform that addresses this income disparity in a healthy manner. We’d like to shift some of the wages paid by employers from the front to the back of the house. We understand that California is one of a handful of states that does not allow for a “tip exception” (allowance of a lower minimum wage if an employee receives enough tips to make up the difference). That said we still believe it would be a workable solution. We believe the ideal situation would have been to increase the minimum wage for the non-tipped employees, while building into it a lower (or fixed) minimum wage for the tipped employees.  Without this offset, the assumption is that restauranteurs are wealthy enough to afford these rising costs. While this may be true in most cases, it certainly is not the case for the small businesses that San Franciscans say they love. The economics of the industry would change dramatically if restaurant owners could slightly lower the FOH (front of house) hourly wage if and only if an equal wage hike were paid to the BOH (back of house. This kind of wage policy would shift income from the top earners to the lower earners in a way that doesn’t threaten the industry itself.

It’s true that policy as it is written will raise cooks’ wages when the wage increases are implemented (an additional $1/hour hike is coming in July). It’s also true that the industry hasn’t fallen apart just yet. We can wait until the calamities hit and deal with the aftermath. But we in the industry are seeing major problems hit already (a shortage of cooks, a struggle to provide a living wage to all employees and a shrinking profit margin) that are only going to eventually reach a crisis point. Let’s implement smarter policy to ensure everyone’s success.

 

http://www.washingtontimes.com/news/2016/oct/10/minimum-wage-hikes-putting-restaurants-out-of-busi/