Like many restaurant employees, I read with great interest last week’s announcement that Danny Meyer—Manhattan’s currently most-titanic restaurant titan—is eliminating tipping at his restaurants and jacking up prices by 30 to 35 percent before the end of next year in order to pay a fair, living wage to his restaurant employees.European restaurants have used the system, basically, forever. The idea has been kicked around by American restaurant owners for decades—and it was implemented, for a time, at one Hamptons restaurant—but has always ended up back on the shelf, next to the fondue pots.
The move is an effort to make wages more fair for everyone, to make the wages waiters earn less dependent on the whimsy or cultural ignorance of a patron, and to make the cost of food more reflective of what it actually costs to place it in front of you. An article about Mr. Meyer’s plans on Eater.com last week explored the actual dollars and cents of the fair-wage reasoning and gave some justification of the way he will do it, and made little bones about the risk involved.
It is definitely a bold move, one that almost could be tried only by Mr. Meyer. His restaurants, which include Gramercy Tavern and Union Square Cafe, are so popular that people just might be willing to pay 30 to 35 percent more to go to them—in fact, the way things seem to be going in the very high-end restaurant business these days, it may be the reason they go, so they can announce to others that they went to the more expensive place. Clearly, Mr. Meyer is looking beyond just his 13 restaurants that will implement this system over the next 14 months, and hoping that he can be the vanguard in an overhaul of the restaurant billing and payroll system.
I’m going to be my usual skeptical self. I think it’s great he’s trying it, but I don’t think most, if any, other restaurant owners will risk it—and I’m not even very confident it will stick for the long term at his restaurant group, Union Square Hospitality.
Credit where credit is due: Sag Harbor’s American Hotel owner Ted Conklin thought of this approach, and gave it a try, more than 30 years ago. In those days—well, still today, actually—the core of the hotel staff was made up of professional waiters (they were still just waiters and waitresses back then, not the half-pretentious, half-PC “servers” of today … and at the American Hotel they were all waiters, no waitresses) who worked year-round. And that is sort of the key to the salaried servers. They will make more on the slow nights of the off-season than they would have otherwise, but they will make less on the gangbusters night.
The Eater article touches on all the pitfalls that Mr. Conklin and a smattering of others came across when they tried what Mr. Meyer is calling “Hospitality Included.”
First of all, we servers, like most Americans, are short-sighted and not willing to give up the windfall of big-money nights for better pay on the sleepy nights. The Eater article also points out that the trade-off of the system may not be completely equal, and servers may end up making a little less overall than they would have under the typical American system. But pay will be more stable and predictable—as will be the taxes owed at the end of the year, with less of an IRS dump, because not enough was taken out of checks throughout the year. Along those lines, there is also the loss of unreported income, though that has been diminished substantially in the last decade.
Second, raising prices, regardless of the righteousness behind them, may not be well-received by restaurant customers (see: short-sighted Americans). Since Mr. Conklin and now Mr. Meyer were/are mavericks in the approach, there are plenty of places up the block where the prices were lower, and a lot of customers see the bottom line as just that. But, of course, in the case of the American Hotel, Mr. Conklin raised prices only to about what most bills would have been anyway with a proper gratuity. Customers didn’t think that way at all.
Mr. Meyer is cranking them up even higher so he can pay his cooks and managers a more appropriate wage, too. In Manhattan, where costs of living went through the roof years ago and keeps going up, the fine dining business is struggling to find the caliber of cooks that used to be over-abundant.
Boil it down a little more and Mr. Meyer is raising the price of the actual bill paid by customers by 10 to 15 percent. At least 5 percent of that was going to come along soon anyway as minimum wages rise, but it’s still a jump, and people will notice—some more than others.
I would like to relate this to a conversation I just happened to have with a former coworker the other day. In 1998, we were waiters at a fantastic waterfront restaurant in East Hampton. It was the best—the best food and the best service, period—and the most popular restaurant the Hamptons has maybe ever seen, and we jammed. It wasn’t a pooled house, which was the controversial and mostly now-abandoned approach to attracting and retaining sharp service staff at the time. On a good night, the waiters in the top sections could expect to take home between $200 and $300, and on the really gangbusters night up to $400.
That was 1998.
This past summer, a regular good night at my restaurant dropped to $285 to $325 per server, with a smattering of $375 to $415 nights. Those numbers sound like a big haul, but it is just in the summer and does not add up to an increase commensurate with standard cost-of-living increases, which do nothing to reflect the pace of increase in the cost of rent in the Hamptons. In 1998, I paid $1,500 for a summer share in Springs from Memorial Day to Labor Day, and could have bought my current three-bedroom saltbox on a half acre for less than $170,000.
Waiters, all of us, would be wise to advocate for a salaried approach at all restaurants. This would require regular raises that kept up with cost of living and would allow owners to simply pass those real-life costs along to customers.
The fact of the matter is, as shocking as it may be to hear, we don’t pay enough for our restaurant meals. We yell about immigrants but would scream bloody murder to see how much a hamburger would cost if the restaurant cook had to pay an American teenager to wash his dishes.
I signed a $400 check, including gratuity, at a Sag Harbor restaurant the other night, and it stings to think what 30 percent more would mean. But look at what PSEG did to your electric bill when they got realistic about how much it costs to provide electricity on Long Island.
Perhaps the East End is the perfect petri dish for a broader implementation of the salaried server system. A small cadre of owners of the area’s major restaurants—Lowenberg, Smith, Hirsh, etc.—could get together and plan a regionwide policy change. Get everyone together, present them a read-to-roll approach, and eliminate the other-guy-down-the-street alternative for diners.
How about it? It’s an idea. I’m not going to hold my breath.
I’ll have the salmon.
on Oct 19, 2015