The Restaurant World's Tipping Point
The window shattered at Baodega, a Manhattan dim-sum spot, in October. Owner Kenny Yie says this was a customer’s retribution after, per New York State law, he asked them for proof of vaccination because they wanted to dine indoors.
"I'm just trying to enforce the law, which is I have to see the vaccine certificate and a picture ID," Yie said. "And if someone doesn't have it, I say, 'I'm sorry, I can't let you go inside, to dine in. And so he just went out and broke my window. I called the police. I don’t understand why people don’t take the vaccine and be safe for everybody."
This is a slice of life in the hospitality business these days, where staff have often taken on second roles as security guards and bouncers. It’s one in a cocktail of factors swirling around the tight labor market that’s left many bars and restaurants struggling to find workers. They have fled the industry in droves because of childcare issues, concerns about getting sick on the job, and a wave of antisocial behavior from customers that echoes what we've seen on commercial flights and elsewhere.
In response, many owners are shrinking their menu offerings to eliminate labor-intensive items. They're shortening their hours or even closing up completely on days—usually Monday and Tuesday—when business is slower. But many are also circling a straightforward solution: pay workers more. Restaurants nationwide are moving to pay the full minimum wage that’s required for pretty much any other job, plus tips. In New York City, where the current tipped minimum wage is $12.50, that means $15 an hour plus whatever patrons decide to leave. Some places have gone for $20. Some, according to Saru Jayaraman, president of One Fair Wage, a national nonprofit working to raise the tipped minimum wage, have gone higher.
“We've been tracking some restaurants paying $30 an hour,” she said. “We found a restaurant paying $50 an hour plus tips. And it's because there's no other way to get workers to come back." She cited a May survey in which 53 percent of restaurant workers who remain in the industry said they're considering leaving and 78 percent said the thing that would make them stay is a full livable wage plus tips. "That's what some of the workers were saying this morning," she added: "'We love this industry, we want to work in it, but it's just not worth it anymore.' You pay more in childcare and transportation than you get when you get to work. One woman said this morning that it ends up being a negative. And when you put the harassment and the violence on top of that, then forget it."
"It is freedom, to be honest," said Galdino "Dino" Cortes, who's worked in the restaurant industry for 26 years. "If there is a fair pay, you definitely will have money to have more options. Either to pay your bills or even to try to look for different opportunities like going back to school. In my case, it helps me a lot because you feel more confident in life. When you don't have enough money, you're always living on the edge, you're always thinking what's next. And when you at least get an extra dollar, you feel like, I can use this money to take the family out on weekends. And that money goes back to businesses, you're supporting businesses, you're buying stuff from places. So every business stays afloat."
Cortes, 46, is a waiter at the Queensboro in Jackson Heights, Queens, not far from where he lives. The co-owner of the restaurant and bar, Michael Fuquay, has chosen to pay his employees $15 an hour plus tips. Queensboro is one of around 1,000 restaurants that have signed up with One Fair Wage, Jayaraman, the president, says. They’re also tracking 3,000 more establishments that have raised wages without joining up with the organization on a formal basis. It's a testament to just how much power workers have built right now that bar and restaurant owners, always operating on razor-thin margins in one of the more challenging business models around, are forking over this kind of pay.
In fact, the situation for operators is more difficult than ever according to Melissa Fleischut, president and CEO of the New York State Restaurant Association. They're facing down supply chain issues, where if a kitchen appliance breaks down, replacement parts can be hard to come by in any reasonable timeframe. There are problems now with the supply of glass and plastic bottles. The industry was battered again by the uncertainty generated by the Delta variant wave. In response, Fleischut spoke of menu changes and tweaks to hours of operation, but on wages, she still pointed to those tight margins.
"Where would that money come from?" Fleischut said. "They're not operating at a level right now where they're making...first of all, some of them still aren't making money."
Mostly, these discussions center on paying workers more to work the same hours—full shifts, regardless of how many customers are actually coming in throughout, and how much business the restaurant is actually doing. Kenny Yie offered something of a third way as he spoke outside Baodega in October after receiving an award from Jayaraman and One Fair Wage for his shop's compensation policy.
"I understand it's a difficult time to pay higher wages," Yie said, "but another way is part-time.” He explained that he’s shifted to employing more of his workforce part-time, but paying them better for each hour worked. Usually, he’s paying $20 an hour for more workers to come in during his busiest four hours of the day. Instead of a regular eight-hour shift where people make low wages and often sit idle anyway, they make $80-plus-tips in less time. “They make enough money and go home,” Yie said. “That's the way."
It makes some sense: pay workers well for the hours they're needed, then give them their time back to do other things—a second job, family, training for a different career, creative outlets and passion projects. It's not ideal—part-time workers miss out on healthcare coverage and other benefits—but these fractured times may call for piecemeal solutions.
From her own conversations with restaurant operators, Jayaraman reports less resignation than Fleischut does with regard to the new labor reality. Owners, in Jayaraman's telling, just don't want to be left alone to compete for workers in a semi-anarchic state of play. "What these employers are telling us is that they can't do it alone. It cannot be one by one by one, it's got to be the law. It's got to be New York State policy. That's the only way it'll be a level playing field. It's also the only way all these workers are going to come back. Because the workers aren't dumb. They know it could be a temporary hiring bonus. 'I'll pay you $20 today and go back to $10 tomorrow.’” Jayaraman says New York Governor Kathy Hochul could make the change by executive action, much like former Governor Andrew Cuomo made it happen for tipped workers in other industries last year.
Fleischut and the New York State Restaurant Association have not taken a position on raising the wage by law. She also said she hadn't heard much about Yie's fewer-hours-higher-pay strategy among other operators, but seemed intrigued by the notion. The changes to state law her members have talked about concern the workers in the back of the house—prep cooks and line cooks and others who don't interact with customers directly—who owners tell her are getting a tougher deal than tipped workers in the front of the house. By state law, back-of-the-house workers aren’t eligible for tips, so they’re taking home significantly less than waitstaff.
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"You can't share the tips with the back of the house the way it's currently set up. You have to have direct contact with the customer in order to receive tips,” she said. “[Owners] don't have the funds to go to the front of the house and don't think the funds should go to the front of the house. They feel that it should go to the back of the house, by and large."
This feels like a bit of wedge driven between the two sets of restaurant workers, but it also rings true. An overhaul of New York's laws, wherein everyone makes the full minimum wage plus tips, and tips can—if a business chooses—be shared between all workers, sounds like it may be in order. Certainly, in Jayaramaran's estimation, this is an opportunity for a transformation of the industry that's been long in the making.
"The sub-minimum wage was always a problem," she said. "It always created economic instability and sexual harassment." Higher base wages bring more certainty and less obligation to put up with bullshit from customers. She referenced a line from Danny Meyer, the prolific New York restaurateur who famously raised wages and abandoned tipping at his businesses until he felt forced to backtrack during the pandemic, who suggested a new model for restaurant work could be the "silver lining" of the COVID cataclysm. The end of boosted unemployment did not send people back into the hospitality labor force—something Fleischut at the Restaurant Association readily acknowledged—and Dino Cortes, restaurant worker for 26 years, has some ideas why. The pandemic, in his view, has been a period of revelation. People have realized they’re in the wrong job, spending too much time on the wrong things, and are now trying to seize the opportunity to recreate themselves.
"I've been working for so long in restaurants, stuck in a restaurant every single day for the same amount of hours,” he said. “And suddenly this thing happens, and then you realize that there's really important things at home or around you that you didn't even notice."
Cortes has stuck around at the Queensboro because he feels the pay is fair and he likes the people he works with. The restaurant has a policy that front-of-house staff are not the ones who have to enforce the vaccine mandate. If a patron starts kicking up a fuss, they're told to send it up to management right away. "They don't want us to get in trouble," he says. "They take the trouble themselves." That's all the better because Cortes lives and works in the shadow of Elmhurst Hospital, a place of great horror in the days when New York became the global epicenter, and he got a severe case of COVID himself in March 2020. He cannot understand why people refuse the vaccine, and get so angry at the rules. The management has his back, though, and it's an indication that decency and understanding could go a long way, even as—tenuous as it may be—workers seem to have reimagined what is possible, and thus what they want and need, during the pandemic.
"I feel like people might come back to work once they feel more comfortable," Cortes said, "And once they find a better job. People are just looking for better opportunities. They don't want to just jump back into the same old routine, all the same. They just want to look for something better. And once they feel comfortable with the better position, they're going to go back."
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