The conversation about earning a living wage in the food industry continues. As the cost of living in cities across the country increases, restaurant owners and chefs are faced with the hard question of how they could possibly pay their cooks more, when already dealing with such low profit margins. As you may be aware, the difference in pay between tipped front of house employees and back of house employees is great. This is a system that has been place in the US for as long as anyone can remember but it’s becoming more and more obvious that it’s not working. Federal law prohibits tip pooling with back of house employees who are not directly involved with customer service, so there’s no immediate solution to better distribute that income. Restaurants in New York, San Francisco and other cities are attempting to eliminate tipping all together and implementing higher hourly wages for all employees, sometimes supplemented by a percentage “service charge” added to the check for all diners or increased menu prices overall. Some restaurants are seeing success with this, while others are not.
Matthew Jennings, chef and owner of Townsman in Boston instigated a conversation on Instagram last night amongst his 41.9k followers with this post:
In 10 hours the post had attracted over 100 comments and sparked conversation between chefs, restaurant owners, cooks and diners from the US, Australia, Canada and Europe. There was mention of Danny Meyers’ podcast appearance on Freakonomics about his no-tipping policy and Corey Mintz’ article on “A cycle of exploitation: How restaurants get cooks to work 12-hour days for minimum wage (or less)” in the Globe and Mail.
We’ve pulled some of the comments for you to read. Comment here or visit @matthewjennings on Instagram to contribute to the conversation.
@hewhoisfed: This is the dilemma of the future for cooks, we often don’t get breaks, and work hard to please every guest in their experience. maybe incentive programs? The cook who produces least waste, or utilizes the most, the cook who does this or that of excellent standard should have reward. Maybe in conjunction with the two percent tip out. Or what of a comprehensive Healthcare program. .providing a specific physical therapy for the standing on feet, having our heads jutted forward all day concentrating on prep tables, sauté pan, ets..or for the intense time grasping knives, tongs, pan handles. If we can’t make much money we should at least have our bodies limber for the work we do, hours we put in. But I truly don’t know the answer. But ideas are the future, I know that.
@matthewjennings: Ideas ARE the future! And the future is NOW! @hewhoisfed ??
@stefanjanowski: They keep us #all up at night. How do i provide a nuturing job that one will love and keep loving once they leave? How will they take what i taught them and show the next gen how to keep it going? How to keep pushin
@matthewjennings: Big [email protected] Sometimes we just have to believe, right?…
@stefanjanowski: @matthewjenningsbelieve and push, only we can preserve our future.
@rockwellandsons: @matthewjennings we just do it, it is our highest cost, for sure. Your labor cost is higher and you just have to reflect it in the food. Minimum wage here is 17.29/hr, casual laborers are much more. Skilled labor is more, too, ie most chefs. On top of that we pay a further 9.5% of superannuation. On the flip side, staff retention is higher and cooks coming in have the financial flexibility to look at multiple job opportunities rather than taking the first one they are offered which leads to them making better decisions and again, your staff retention is higher. Salaried employees also get 4 weeks annual leave.
@matthewjennings: I love it,@rockwellandsons. I actually think OZ is a good model for USA. But it round take time to get there and a LOT of small businesses would get crushed in the process. ??
@muchogustos: It’s tough trying to find a liveable wage between daily rate and hourly, while keeping costs in line.,. Do we work harder to drop our food costs, to increase our labour, while still maintaining a sustainable prime cost?
@dziedzic17: Tip the cooks out on food sales with a percentage and the service staff get tipped on total sales with a different percentage. Then it’s a least getting divide up amongst everybody. Start giving incentives to the cooks. It’s the chef/ owner believing in what part of the restaurant is more important. And that’s different for each kitchen/ restaurant.
@matthewjennings: Federal law prohibits tip sharing FOH/BOH so would have to be categorized and explained to diner. Not impossible! @dziedzic17
@chefpeteto: Pay salary, increase menu price, but no tipping. Really only option IMO. Profit sharing could work too; if your restaurant is profitable.
@matthewjennings: 14 cooks on profit sharing?…. Menu price increases vs. grat line. What does diner prefer. That’s $$$$$ question. @chefpeteto
@chefpeteto: @matthewjennings @hodorthebartender service charge in UK is 12.5%. It’s discretionary but no one doesn’t pay it.
@hodorthebartender: It’s more of a tip from the servers like how they tip busboys or barbacks end of the night 2% of sales to the kitchen 2% for busboys food runners etc.
@chefpeteto: @matthewjennings explain to the diner that it’s for your staff to get living wage, benefits, etc…creating a loyal staff/less new employee training/turnover all decrease cost to you. We can have up to 46 cooks on staff where I work and we all make very nice pay after service charge.
@matthewjennings Not sure America is ready for an additional grat line on the check but I hear you @chefpeteto
@n_jonez: Cooks need to start at 18 an hour. A sous should make at least 60 a year
@matthewjennings: Blanket statements, @n_jonez. How do we get there? Do you own your own restaurant? Are you familiar with the intricacies affected by your statement? What are solutions?
@n_jonez: @matthewjennings. The industry is hard and those numbers are beyond trying at best. I know just by how hard the back of the house works. Based on principle alone that’s what the numbers should be. Look at this city nothing but luxury high rise after luxury high rise. You can’t afford to live in the city for 12 dollars an hour. You can’t even afford it with roommates in the worst neighborhood in Chelsea. How restaurants and chefs get there I don’t know. Investors get overly greedy and the pop on the weekend to the slow Wednesday night is what hurts the wallet. But then again has anyone ever made money doing something passionate. All I know I’ve seen some very talented people making only ten dollars an hour. A cook shouldn’t have to be a starving artist.
@whatweeat.nyc: Such an important question and amazing feed of replies. I have no idea what the answer is but I do feel that ultimately the price of a restaurant meal should be higher to reflect the true cost of putting a beautifully executed dish in front of a diner. Obviously there would need to be consensus across industry-leading, trend-setting restaurants about this and a massive (repeated) PR push to help the public understand the drivers. “Here’s why your McDonald’s burger cost $2 and they can still pay their cooks a living wage” (horrible quality of food among other reasons). There seems to be only so much you can do thinking outside the box to rearrange how total profit, including tip, can be divided. It’s not enough. Maybe this means restaurants in the future can’t turn tables as many times a night because people won’t be eating out multiple times a week, but perhaps this means restaurants/workers could make more at the same time that their work becomes more manageable (and enjoyable).
@myfreshnewengland: Would be happy to pay more as a customer if I knew it was supporting a living wage. Also, Red Hen Baking Co (bakery & cafe) in VT was recently honored at the White House for setting up an innovative living wage program. Apparently, there’s even a Harvard case study on it. Suspect it’s a different model from yours but there might be something to glean from his work and might be worth connecting with him. http://freshnewengland.com/feature/red-hen-baking/
@matthewjennings: What about a flat 2-3% line item gratuity? Or you’d prefer higher prices? @myfreshnewengland
@matthewjennings: OR an all around 6% ‘service fee’? Could still tip FOH on top if your service is [email protected]
@myfreshnewengland: flat fee over higher prices. I’d also like to know the workers are getting a living wage. Personally prefer to pay for local ingredients and good business practice but can’t speak for others. This is interesting http://civileats.com/2015/07/16/goodbye-tipping-hello-living-wage-the-changing-face-of-progressive-restaurants/
@driennn: We seem to be at a point where the cost of living is becoming too high for everyone. Studio apartments in NYC don’t go for less then 1800 and cooks aren’t making that sort of money. Raising prices may actually affect business because it seems across the board people are struggling. We need to find a solution that works for both the workers and the diners and doesn’t hurt the profits of the businesses. You should be able to provide stable income for employees without paying out all of the money you put into your establishment. We don’t get any cooks nowadays that want less then $16/hr and it’s just not possible. We offer commuter benefits, health insurance and paid sick leave but it’s still not appealing enough. We are turning cooks because we do 250+ covers in one restaurant and they don’t feel they’re being compensated enough. It’s a tough thing. There needs to be a change in restaurant culture in general. BOH is way under compensated for the work they do, it’s always been that way. Wouldn’t change my first few years as a line cool making $10/hr though, ya gotta admit that was the time of your life. The services, the butchering, the breakdown beers. It’s why we do what we do.
@matthewjennings: ? @driennn
@driennn: Never mind putting BOH on salary. NYC is gonna require minimum pay for a salary employee be $910/week and all salary employees must have the rights of management, meaning they can hire/fire, etc. @chefpeteo
@justinthenry: The price of food is too low. Until we address the issue of cheap, empty calories we won’t be able to charge prices commensurate with the skills and knowledge necessary to operate a successful restaurant. Also adding to this problem is the amount of free labor that the best restaurants utilize in return for allowing a stage at their restaurant. When the 50 best hits this week, how many of those restaurants have a dozen or more free laborers? It’s unethical.
@iamjonlovett: In Australia, I pay my chefs $22-24/hour. In Toronto, Canada, I was starting qualified chefs @ $15/hour. 1) The public needs to realize there is a global shortage of chefs. 2) A decent meal prepared by qualified chefs is presently sadly under-valued, especially in North America. This needs to change. Restaurant owners need to cough it up(I do!) for decent staff and take a chance. Charge more for quality, full-service food and beverage.
@iamjnlovett: The public shouldn’t dictate server and/or chef wages with tips, it’s a ridiculous system. Service charge is not the answer. As a restaurant owner, it’s time to take the gamble. Charge more and pay more. If you believe in your product and it’s decent, it’ll work. Take the gamble, you owe it to your staff, no?
@matthewjennings: Yes, yes and yes,@iamjonlovett but that is undoing close to 100 years of pre-conditioning of the American public! Not an easy task! Agree with your statement but easier said than done, in today’s global marketplace!
@iamjonlovett: @matthewjennings I hear ya, you’re caught in a franchise-heavy restaurant environment (the US). It’s up to you, the revolutionary, to help differentiate between qualified-chef dining and franchised, food-factory dining. Casual or fine dining, the message is the same. Identify the two-tiered system. Staff driven and franchise driven. I own a small, casual Mexican restaurant(and we aren’t cheap to dine in) in a tourist-heavy market. My wife and I do our best to make it clear to guests who arc up about prices, that we run a team of qulified chefs in the kitchen, and trained professionals on the floor. So they ought to expect a creative, interesting, upbeat experience. That’s how it starts. Informing the diner, “This ain’t Applebee’s”. You’ve got this. You’re making good food and providing excellent service, charge what you NEED to charge, not simply what the market will accept. INFORMING THE DINER is the only way to start the change. Information is the answer. Lead the revolution! You’ve got this!
@nyculla: The rent is too damn high. Cities are too expensive. Without affordable housing being addressed by policy makers, I’m not sure how restaurants can make a profitable balance.
@wdouillet: Everyone can show you the math. The fulfillment quotient matters just as much: education, professional growth, promote strictly from within, show a part of profit share for top performers, open transparency around p&l so employees can learn how to run their own business, make it fun (really think through your employee experience on weekly basis and make it more fun). If you work towards these items it adds significantly to just the $$. Just my $0.02
@matthewjennings: Here, here @wdouillet!!
@e.marlow: Check out Paul Saginaw’s thoughts of Zingermans…
@wdouillet: And if you go to service included atera was second in NYC after Per Se to go that route, I’m an open book for you boo.
@pdecamp: @wdouillet second the fulfillment quotient, and these are even steps that can be taken while you are trying to figure out the pay question
@wdouillet: Yes chef @pdecamp –@e.marlow love them — here is an entry article to their school that shows results of the system: http://mobile.nytimes.com/2014/07/06/business/at-zingermans-pastrami-and-partnership-to-go.html
@mattakinskywalker: you’re my fucking hero dude.