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The High Road to Profitability in the Restaurant Industry

February 14, 2011 ·

Local summit on the restaurant industry shows us that the choices that restaurant owners make affect not only their workers, but the rest of us as well.

This Valentine's Day, the busiest restaurant day of the year,  I attended Behind the Kitchen Door summit at Eatonville Restaurant. The Summit brought attention to inequality in Washington DC's thriving restaurant industry and was organized by The Restaurant Opportunities Center of Washington, DC, Restaurant Opportunities Center United, and the Washington DC Restaurant Industry Coalition. About 200 people were in attendance and Eatonville Restaurant provided coffee, service, entertainment and breakfast.

The summit explained two routes to profitability in the restaurant industry:

  • The high road: liveable wages, health benefits including paid sick leave, and opportunities for advancement.
  • The low road: low-wage jobs, meager benefits and unsafe or even unlawful workplace conditions.

Among the speakers were Dr. William Spriggs, Assistant Secretary for Policy at the U.S. Dept of Labor; Barbara Ehrenreich, New York Times bestseller author and member of the board of trustees of IPS; DC councilman Phil Mendelson; Algeronon Austin from the Economic Policy Institute; Andy Shallal, owner of Eatonville and Busboys and Poets restaurants and also an IPS trustee; as well as other civic leaders and restaurant workers.

I was surprised to learn that the current federal wage for "tip workers" (those who rely on tips in addition to a baseline hourly pay) is $2.13. This is the same wage I made as a server 20 years ago. The wage has not increased since 1991. Ehrenreich reminded the audience that a living wage in DC, defined as the least needed to make ends meet in the city, is currently $12.50 per hour.

And did you know that about three-quarters of restaurant workers do not have paid sick days and that nearly two-thirds of them report that they have served or cooked while sick?

The lack of paid sick days not only endangers the worker and consumers, but also drives up health care costs for the businesses and the public as a result of worsening and spreading illness. According to a fact sheet from the National Partnership for Women & Families, workers who do not have paid sick days are more than twice as likely to use emergency room care than workers with access to paid sick days. Numbers increase for their children and relatives as they are unable to take off work to care for their loved ones when necessary.

Many "low road" restaurant owners will cite obstacles to profitability for their resistance to pay living wages and grant paid sick leave to their workers. However, beside being the right thing to do, it not only saves money in the long run to provide good wages and benefits, it can be highly profitable as evidenced by such successful "high road" restaurateurs as Andy Shallal.

Mr. Shallal is a pioneer in providing paid sick leave, living wages and opportunity for promotion to restaurant workers in his employ. His restaurants, I can attest, are packed virtually every night of the week with long waiting lines. This is a businessman who teaches us much about doing the right thing and being wildly successful in business at the same time.

So whether you are dining out for Valentine's Day, having coffee with colleagues midweek, or enjoying a cold one with friends on the weekend, please ask the management at the restaurant of your choice what road they take when it comes to being a good business owner and employer, and give your valuable business only to those who take the high road.

Now, that's love.