‘We’ve failed low-wage workers:’ Restaurant owners raise pay in wake of labor shortage

Rose's Fine Food and Wine – May 14, 2021

Molly Mitchell poses for a portrait in her bakery and restaurant Rose's Fine Food and Wine in the Detroit, on Friday, May 14, 2021. (Mike Mulholland | MLive.com)Mike Mulholland | MLive.com

Restaurant owners have been pleading for workers amid a widespread labor shortage, but laborers are firing back, saying a return to work under the status quo just won’t do.

A cultural shift in the industry could help with recruiting, but it needs to start with more respect for the profession from the top down, and that includes better wages and benefits, said Matt Millar, chef and co-owner of The Southerner in Saugatuck.

“There are jobs that need to be done and not all of them are glamorous, but they are all worthy of a living wage,” he said. “I think we have to resign ourselves to the idea that we’ve failed low-wage workers for a long time. We need to start making some changes.”

The Southerner underwent changes this month that were a long time coming, Millar said. He announced in a Facebook post all full-time employees would be eligible for health insurance with dental options. The restaurant is also offering paid family leave with four weeks for maternity and two weeks paternity leave.

The biggest change is for nontipped employees, who will now be paid a minimum wage of $15 an hour. All tipped employees will still be at the state subminimum wage of $3.67, and if they don’t meet $15 an hour with tips, the restaurant will fill in the gap. Millar estimates his tipped workers make an average of $40 an hour.

“For a long time, cooking and working in the service industry has been looked at as a stepping stone,” he said. “It’s the job that you have on your way to the next job and we have justified lower wages because of that.”

The wage increase will come partly at the expense of the restaurant and partly at the expense of the customer with increased menu prices. The reception to the Facebook announcement of raising wages and prices was overall well received, Millar said. But, no good deed goes unpunished, he said there was push back saying restaurant jobs aren’t skilled labor.

“To me there’s just this astonishing lack of empathy on behalf of so many people who have this way of thinking,” he said. “I’ll tell you what, if you think cleaning a bathroom isn’t worth $15 an hour then go a week without it happening and tell me you still have that opinion.”

Millar said he’s in favor of the federal minimum wage, currently $7.25, incrementally rising to $15. It would level the playing field among competitors, increasing menu prices and starting the conversation with customers, he said.

Related: Long hours, health risks and ‘ghost applicants’ lead to desperate staffing situations at Michigan restaurants

Restaurants across Michigan are juggling staff shortages and rising food prices, making balancing the books even more difficult. Saddleback BBQ in Lansing has taken to social media to give customers a lesson in supply chain management.

Lucy's Creston Kitchen faces staff shortage amidst booming business

Staff of Lucy's Creston Kitchen work on their individual tasks during the lunch rush on Thursday, April 22, 2021. Due to the coronavirus pandemic and other factors impacting the restaurant industry, Lucy's faces a staff shortage. (Hope Davison | MLive.com)Hope Davison

Co-owner Travis Stoliker presented a PowerPoint on why chicken wings were off the menu due to rising costs. He returned weeks later explaining that the restaurant does not use the state’s tipped minimum wage. Instead, all employees are paid the general state minimum wage of $9.65, plus an equal share of all tips earned from the pay period.

The Facebook post includes a chart illustrating pay periods from September 2020, when the restaurant’s lowest hourly pay, including tip share, was $17.01, to May 2021, when the minimum was $15.11.

Both restaurant owners are hoping that more transparency about how the business model works will offer customers a better understanding of increased prices.

“I don’t think that people recognize that delicate balance,” Stoliker said. “When we go to a fast food restaurant and there’s a $1 menu, we have to understand that it’s very difficult to pay employees more when we expect a sandwich for $1.”

Rose’s Fine Food and Wine, a small but popular restaurant on Detroit’s east side, has been using the pooled tip model for the past seven years. The restaurant has never paid the subminimum wage for tipped workers and is currently hiring at $15 per hour, owner Molly Mitchell said.

She advised restaurants adopting higher wages to mind their margins, but assured them that ultimately, they are making a long-term investment.

Although the restaurant is currently operating at half its capacity, Mitchell said five of her current six staffers came back to work after the pandemic shutdown. Among them are employees who have been with the restaurant for four to seven years.

“It’s a team sport. You cannot do it yourself,” Mitchell said. “If you don’t have people who care about what they’re doing, your restaurant is going to be dirty, your food is going to be bad and service is going to be shit.”

Worker advocacy groups like Restaurant Opportunities Centers United also argue that higher wages and better benefits will help employers retain their workers.

Before the pandemic, Washington and Michigan had similar restaurant worker populations. Washington is among seven states that do not have a tipped minimum wage and require employers to pay one hourly wage, regardless of tips. Washington’s current minimum wage is $13.69.

At the height of the pandemic, in April 2020, both Washington and Michigan had bans against indoor restaurant dining in place, allowing only take-out service. Washington saw a drop in restaurant employment of 34.8% from January 2020, compared to a drop of 54% in Michigan, according to the ROC, citing the U.S. Bureau of Labor Statistics.

The Michigan chapter of the Restaurant Opportunities Center joined a group of workers and organizations in a lawsuit filed against Attorney General Dana Nessel last week. The plaintiffs claims state lawmakers illegally amended minimum wage legislation brought forth via a successful petition drive in 2018.

The plaintiffs claim Nessel failed to reverse an unconstitutional opinion issued by her predecessor that allowed the amendments to take hold before the laws were passed, delaying a $12 minimum wage to 2030 and softening proposed sick leave requirements.

Related: Restaurant workers sue for $12 minimum wage proposal, claiming delay to 2030 was unconstitutional

The pandemic put a spotlight on front-line workers, often restaurant workers, who often didn’t have a safety net to allow time off work if they felt sick or needed to take care of a family member.

As a chef of 15 years in Detroit, Nik R. Cole said the culture in the kitchen is to keep pushing for the paycheck because every day as an hourly worker matters.

“Teams are small, so if you take a day off, you’re kind of the weakest link, and who wants that?” she said.

Supplemented unemployment checks are often named as the culprit for the labor shortage, but Cole sees that as an excuse. She said those pointing to unemployment don’t understand the passion behind the food.

“I see myself as an artist,” she said. “I don’t want to be burnt out, but I would love to better my craft that I love. But also, I need some more money.”

Pre-pandemic, Cole was a culinary instructor for the ROC’s job training program. She has multiple titles, including columnist, head chef, entrepreneur and founder of a storytelling event series. Keeping up the hustle is the best way to avoid being a starving artist, she said.

In Michigan, 19.5% of restaurant workers are in poverty, and nearly half, 45.4%, of all restaurant workers are at or under twice the poverty line, according to ROC data pulled from U.S. Census surveys. Servers and back-of-house workers experience similar poverty rates.

In 2021, the poverty line in the U.S. for a family of four is $26,500 a year. Researchers estimate families need incomes twice as high as the federal poverty level just to get by.

Michigan’s restaurant industry is majority female, with women compromising 76.4% of tipped workers despite only being 47.9% of the total workforce. Mothers make up 31.8% of restaurant workers in Michigan and of the mothers, 54.5% are single mothers, according to ROC data.

When Cole’s kids were younger, she was bartending or working the dinner shift, she said. She had to rely on family for child care and often missed out on after-school activities and family dinners, she said.

“Eating out is a privilege,” she said. “People take advantage of it every single day without question. You don’t think about the worker.”

Moving forward, Cole said workers should feel empowered to use their voice to advocate for change at the legislative level. Cole was quick to add that restaurant owners have to be part of the conversation as well.

Mitchell at Rose’s Fine Food and Wine agreed, saying the tide has been changing for a while. Looking at the big picture, Mitchell said change will be more visible when corporations like McDonald’s and Burger King increase wages and benefits.

Recently, Chipotle Mexican Grill announced it will switch to a $15 hourly wage.

“It’s going to impact food costs across the board, which impacts culture,” she said. “It makes people understand that you’re asking somebody to do a really hard job for you — dishes, clean up, cooking, baking — and you’re paying like nothing for it.”

More on MLive:

Unemployed will soon have to prove they’re searching for work – or lose benefits

Cancel extra $300, federal unemployment programs, Michigan business group urges

Wings are off the menu at Michigan BBQ joints after prices increase nationally 95% in one year

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