Happy Lunar New Year!

Might we be on our way to a new, more evolved era in restauranting?

Feb 01, 2022

*Photo illustration — a remix of a Greg Stinson painting — by Leslie Brenner*

Happy Monday, beautiful hospitalarians, brilliant cooks and fabulous food-lovers!

I’m trying to be cheerful because though these are very rough times, there may be some light at the end of this very long tunnel.

Less than two months have passed since The Brenner Report last wrote about the state of the restaurant industry, but it might as well have been two years — or two centuries. On Nov. 9, when I sent out an essay about how we all have an essential part to play if we want restaurants to survive, dining had been on an upswing. Responsible folks from coast to coast (double-vaxed, then boosted) were out enjoying our restaurants once again, and the essay was largely about the understaffing crisis.

Well, staffing is still a crisis, but now it is compounded by diners clearing out once again, and the strain on those who work in the industry is spirit-breaking. Take a look at this tweet, based on a State of the Industry study by OpenTable, from FiveThirtyEight.com’s Nate Silver on Tues:

Nate Silver @NateSilver538

OpenTable restaurant reservations in January 2022 as compared with January 2019: Miami: +14% Las Vegas: +1% Houston: -13% Denver: -26% LA: -41% Boston: -48% Brooklyn: -55% DC: -59% Manhattan: -64% San Francisco: -66% Cambridge, MA: -75% opentable.com/state-of-indus…

Megan McArdle @asymmetricinfo

Yeah, I'm making a point of going out to eat every week, both to shake pandemic atrophy and to support local restaurants. I'm eating in a lot of nearly empty restaurants. I don't know if it's Omicron fear, remote work, or folks just out of the habit, but things are *not* normal. https://t.co/8rD2tvO44n

In other words, in many parts of the country, January was disastrous.

Hopefully we can plow through, and get past this crisis. BA.2, the latest variant, could “drag out the Omnicron surge in much of the world,” The New York Times reported this morning. But “Dr. Anthony S. Fauci, the chief Covid adviser to President Biden, recently offered words of cautious optimism, saying he believed outbreaks could become much more manageable in the coming months — to a point where ‘they’re there, but they don’t disrupt society.’”

Hospitality begins at home

People everywhere are exhausted — and in the restaurant world, that’s been compounded by having to work extra hard to compensate for co-workers out with COVID, which in turn is compounded by staffs that are uncomfortably lean due to the labor crisis.

So, what’s the solution, once we get past this surge? Unfortunately there’s not a simple or immediate one, but the more it goes, the more it’s clear that restaurant owners need to find ways to be better employers; restaurants need to be better workplaces with better cultures and better benefits.

Some restaurants are working very hard to do so, as Laura Reiley reports in an excellent Washington Post story. They are offering signing bonuses, paid parental leave and other time off, life insurance and other benefits no one would have dreamed of a couple years ago. (Well, maybe they did dream.)

That’s great for super-successful businesses. But for most restaurateurs, offering even basic health insurance is out of reach — and will continue to be until the business model that never worked that well in the first place is fixed. Restaurants need to evolve their business models, or they won’t be able to afford to pay for the kind of benefits that will keep their hiring competitive.

Of course it’s not only restaurant owners that struggle with the business model; hospitality workers — both front-of-the-house and back-of-the-house — are struggling as well. As Greta Moran wrote in Eater on Friday, an organization called One Fair Wage has filed an appeal (on behalf of 200,000 service workers and 80,000 restaurant workers) on the U.S. Ninth Circuit Court to a lawsuit against Darden Restaurants. Moran explains:

“The group alleges that Darden pays the lowest legal cash wage in every state and lacks policies to redistribute tips between workers, facilitating a discriminatory system where the civil rights of people of color and women are violated.”

Do read the story, which fully explains how the "tipped minimum” — the practice that allows restaurants in 43 states to pay servers a rate far below the states’ minimum wages, with the idea that it’s supplemented by tips that bring them up to that minimum wage. One Fair Wage refers to it as the “subminimum wage.” If you are a restaurant owner who continues to believe that you can’t get people to work in your establishment because they’d rather collect unemployment or people just don’t want to work anymore (I heard it again just last week), you need to read the story — it’ll help you understand what’s going on, and perhaps begin to lead you to a solution.

A tipping point for tipping?

Now to the good news: One Fair Wage and Restaurant Opportunities Centers (ROC) United — another group working for solutions in this area (both were founded by California attorney Saru Jayaraman) — are “hopeful that they may be turning a corner in the fight for fair wages among restaurant workers.” Quoting again from Moran’s story:

“People are calling this era ‘the end of low wage work,”’ said Jayaraman, who directs the Food Labor Research Center at the University of California, Berkeley, in addition to One Fair Wage. “People aren’t willing to work for these wages and people are overwhelmingly supportive of workers not willing to work for these wages. The is the future of the industry.”

That’s because a number of forward-looking restaurateurs are turning the tipped-minimum wage model on its head. Take a look at this ad on the Culinary Agents site for a server position at Frasca in Boulder, Colorado:

A few things to note:

• Experience is not required. Forward-looking employers will be offering development opportunities to prospective staff members. The desire to learn and grow will be essential, but that means employers will need to invest time and effort in staff development.

• The starting hourly wage for the no-experience-required server position is $17 to $22, not $2.13, the federal minimum wage used in many restaurants as the tipped minimum. Pooled tips go on top of that. And at Frasca, to the best of my knowledge, both front of the house and back of the house positions are paid this way.

• Frasca has listed this position at Culinary Agents, whose founder, Alice Cheng, was our guest at Communal Table Talks #5: Agents of Change. That’s Cheng on the upper left:

At the talk, Cheng shared plenty of smart ideas for specific, workable ways for restaurant owners to be better employers. Please help yourself.

Watch The Communal Table Talks #5

Exciting opportunity for an activist journalist

There are other forward-looking restaurateurs around the country besides Bobby Stuckey who have evolved their labor models. How has Frasca been able to make this work? What models are other restaurants using that are working for them and their staffs? This is an important story that someone should be writing (hopefully someone is!). If I were still a journalist, I’d be on it. The story will require a ton of reporting. Is it for you? I have a few leads, so if you want to write it, give me a holler; I’ll be happy to share. And dying to read it.

In the meantime, there are many ways for restaurants — both existing and in development — to improve their business models. We talked about some of them in The Communal Table Talks #2 // Flexibility: Restaurants and their Infinite Potential. I’ve got many more; if you want to talk about them, feel free to shoot me a note and let me know.