Will Raising Pay and Abolishing Tips Fix the Restaurant Industry?

Will Raising Pay and Abolishing Tips Fix the Restaurant Industry?

Why you should care

Happier restaurant workers could decrease global misery by a katrillion percent.

OZY was first to this story, putting you ahead of the curve. View More OZY Originals

He was sweating and felt light-headed — a 103-degree fever tends to do that — but line cook Tim Veatch somehow made it through his long shift and the endless stream of orders. With his job, there was often no time to eat, of course, or take a nap. And the 6-foot-2 worker, down to a gaunt 152 pounds at that time from overwork and anxiety, tended to fill up on three or four pots of coffee to get through each day. “I was a total wreck,” he says.

That’s all in the past, thankfully. He now works 10-hour shifts, with three days off a week, paid sick leave, overtime and health benefits. But he didn’t leave the restaurant industry. He just moved to a different eatery, Camino, in Oakland, California.

The restaurant industry may finally be 86-ing low wages and long, grueling shifts. Businesses have begun replacing the hot-blooded chef screaming from an office to a mentor working on the line, offering above-minimum-wage pay and even an ownership stake. More dishwashers and line cooks participate in financial-planning meetings. And some places have even abolished tips — to guarantee a livable base wage.

At Zingerman’s, everyone — from the CFO to dishwashers — participates in a weekly “financial huddle.”

As foodie culture grows, diners’ definition of “sustainable” often doesn’t include the workers preparing and serving their food. “When there’s talk about raising wages, the first to scream bloody murder are the people going, ‘Where are the chickens from? Are the eggs free-range?’” says Paul Saginaw, co-founder of Zingerman’s, a Michigan-based collection of eateries and other food businesses. “But they’re not asking, ‘How are you treating the dishwasher?’”

Anyone who’s ever waited tables already knows that restaurant staff rank among the lowest-paid workers in the country. Tipped workers earn a minimum wage of $2.13 — which hasn’t budged since 1991. Nearly 9 out of 10 don’t receive paid sick days or health insurance, according to advocacy group Restaurant Opportunities Centers (ROC) United, and many restaurants expect cooks to prep for two to three unpaid, off-the-clock hours before their shift. The U.S. has “the absolute worst working conditions of every restaurant industry in the world,” says ROC co-founder and co-director Saru Jayaraman. Even fast-food workers earn $24 an hour in Denmark, according to Statistics Denmark. Many also blame a machismo culture that believes employees are “lucky to work at that restaurant,” especially if it’s high-end, says Camino chef and co-owner Russell Moore.

To make paying livable wages easier, even after Oakland raised its minimum wage to $12.25, Camino and a handful of other U.S. restaurants have abolished tipping. Camino compensates staff through merit-based hourly wages and increased prices to cover those. Not only does this give front-of-house servers and bartenders a base pay that doesn’t depend upon whether it’s a busy or slow shift, but it also funnels more income to the untipped back of the house — mainly immigrants and people of color with families — where pay and working conditions, most notably in high-end restaurants, can be far worse than in the front of the house, says the ROC. Tips in Europe, though optional, are given on top of an ample base pay.

Camino Restaurant

Kitchen staff hard at work at Camino in Oakland, Calif.

Source CC

At Zingerman’s, everyone — from the CFO to dishwashers — participates in a weekly “financial huddle,” which includes discussions on how an earning or expenditure in the operating report compares with the target amount. Employees “are more engaged and more likely to do a good job,” Saginaw says. Tapping into workers’ on-the-ground knowledge also helps the company make better decisions. Soon employees will be able to buy shares, and even non-partners may take turns exercising consensus powers during major meetings.

Restaurants are also increasingly grooming career chefs. Rather than hiring a prep crew and requiring cooks to work eight hours, a 10-hour shift allows Camino’s cooks time to “work on the dish from all angles,” says Moore. They rotate on the line and make pickles and vinegar rather than leave early on slow days. “You end up with really well-rounded cooks,” says co-owner and general manager Allison Hopelain. Many restaurants promote internally, too: At Zingerman’s, all partners began as regular employees.

A study by Cornell University and ROC found that each employee turnover can cost up to $14,000.

Kitchens, with an infamous and storied culture of clannishness and even lawlessness, have also begun to clean up their acts — harassment, wage stealing and the like won’t fly anymore, no more than they would at, say, your brother’s accounting firm. Busboys and Poets in Washington, D.C., for example, requires cultural competency training. And while most restaurants serve staff cheap pasta or ask them to pay for menu items, Camino employees make staff meals with the same quality ingredients they serve customers. But unlike many chefs, Diep Tran, of Good Girl Dinette in Los Angeles, says she refuses to call her staff “family.” Otherwise, it’s easy to “guilt someone into working for an extra hour.”

Spending more on treating workers well can be tough on restaurants, which already operate on thin margins. Meanwhile, American consumers increasingly expect cheaper food, despite the cost of labor and ingredients. But a study by Cornell University and ROC found that the short-term challenges translate into long-term gains — mainly due to reduced employee turnovers, which can cost up to $14,000 per. The restaurants OZY spoke to all cited a stable staff as the biggest payoff.

While it’s unclear whether these practices will catch on, Tran says she wants to see the same social consciousness that’s developed in the garment industry take hold of the food industry. Although many people still buy clothes made in sweatshops, they at least understand the implications. With food, “I don’t think the common consumer understands if someone is being exploited. At the same time, those sweatshops are usually in Bangladesh,” she says. “The kitchen is right there.”

Comment

OZYFast Forward

New trends and breakthrough thinking in politics, science, technology, business and culture. It’s futurism at its best.