no. 42: socialmedia megamerger superstar

As we get used to eating in restaurants again, we also, inevitably, get used to turning a blind eye to the problems of the industry again. Jaya Saxena took on this problem in a terrific article for Eater this week, asking what change the social justice movement of the last year has actually effected in the restaurant world. The best quote in that piece (or perhaps in any Eater article ever) was this:

“From my perspective as a worker, it’s like they did everything that they could do within the constraints of the system that we live in,” Waxman said. “Short of dismantling capitalism, I mean.” 

Most of the press I’ve read about the restaurant labour shortage (this is a representative summary) blames the shortage on the fact that restaurants are terrible places to work: pay is low and working conditions are awful because owners, managers, and diners are generally horrible people. The fact that multiple articles in regional and national press actually mention problematic working conditions in restaurants is itself striking, and would undoubtedly not have happened if not for the social justice movement Saxena is writing about. 

But now we’re running up against the event horizon of capitalism – our desire for change cannot affect the world unless we can fund it. I don’t see much recognition of this fact that this is a problem that extends beyond individual restaurant owners, or indeed the industry as a whole (this piece comes the closest). 

Let’s go all in on the “bad ownership” thesis for a minute, and say that every penny of profit is unethical and should go to the staff. 

Restaurant profit margins average 3-6%. If we give all that money to the staff instead, we still wind up with restaurant wages substantially below what we’d call a living wage. Labor cost at a healthy restaurant is somewhere between 35% and 50% in a major metro these days (where total revenue, not including tips =100%) We can assume tips are another 15-20% on top of that, meaning that the staff of a restaurant collectively get paid a sum equivalent to between 50% and 70% of revenue. 

If we give all the profit to the staff instead, we’ve just given every member of the staff a raise of between 4% and 10% (by adding 3-6% of revenue to the current staff earnings of 50-70% of revenue). 

Do we think that’s enough to make people want to resume working in restaurants now that we’re living with the coronavirus, with all the social and professional stresses that entails? The last time I tried to do this math, 76k/year seemed like what we should be paying restaurant staff in NYC for this to be a sustainable career. 76k/year works out to approximately $36/hour – and that’s assuming restaurant staff get paid when they’re on vacation or out sick, neither of which is exactly common practice. To get to $36/hour, we would need to raise average restaurant wages in NYC by quite a bit more than 10%, and probably engage in a substantial redistribution of front-of-house and back-of-house earnings in the process.*

Yes, bad actors in management are a problem. But you can’t pay staff money you don’t have. It’s not just that restaurants don’t pay well, it’s that by and large, they can’t pay well. 

It’s hard to see this as anything other than a sign that America is unwilling, in aggregate, to pay enough for the privilege (increasingly seen as a right), of eating outside the home. Americans obviously like restaurants, since we’ve built a lot of them, but we also don’t seem to be willing to pay for them the way we’re willing to pay for Netflix subscriptions or SUVs.

The simplest possible explanation for this paradox is that most people simply don’t care about the human cost of their food, as long as the burritos stay cheap. To the extent that this is true, it’s hugely dispiriting. 

Based on the enthusiasm we’re seeing for eating in restaurants again as the country reopens, it seems like the various movements for reform have not really changed consumer preferences. There’s a rush to dine out, in spite of all the recent press saying that when you eat out, chances are you’re patronizing an establishment run by bad actors embedded in an abusive, exploitative system. 

A more optimistic explanation is that most people don’t realize that they should be paying more to eat in restaurants, and would at least theoretically be happy to pay more for their food if it meant restaurants were better workplaces. 

There are restaurants today that are actually trying to do right by their staff, but nobody evaluates restaurants on their virtues as employers. The information doesn’t appear on Instagram, in the Guide Michelin, or the New York Times restaurant review. None of the venues where we inform ourselves about restaurants publishes it. 

But what if Google and Yelp listings included reviews of the restaurant by the staff? (Glassdoor and Yelp, a socialmedia megamerger superstar waiting to happen) Or if municipalities gave restaurants a letter grade for their treatment of their workers, the way some do for adherence to health regulations? Without some way for diners to tell whether a restaurant is a good workplace, we just don’t know if diners will choose where to eat based on how a restaurant treats its staff. 

It matters that diners care, because being a good employer comes at a cost, and individual restaurants trying to be better workplaces incur the expense of doing so, and see no benefit unless diners vote with their wallets. The recent spate of restaurants reversing their no-tipping policies looked an awful lot like the first lemmings off the cliff deciding that solid ground was actually very nice – and it happened because diners voted against no-tipping policies in the only way that mattered. 

There have always been, and always will be, intrepid individual restaurants with the gumption to do right by their people (Mei Mei and Dirt Candy, I salute you). Some of them are even good enough, and lucky enough, to be able to make this work long term. But that’s not a recipe for the systemic change that so many people say they want to see. 



* I have not done the math for other parts of the country, but I would guess this holds for all major metros – and as Drew Austin pointed out this week, the problems faced by major metros seem likely to become more widespread in the next few years. 


This is let them eat cake, a frankly irregular essay about food systems (and also, food). I write about these things because I’ve worked in food for over a decade, mostly as a chef, and am writing a book about how deeply fucked up, and how deeply worthwhile, this whole enterprise of feeding people is. Also, writing is cheaper than therapy.

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