Last week, Manhattan chef Gabrielle Hamilton wrote a New York Times essay, “My Restaurant was my Life for 20 Years. Does the World Need it Anymore?” about shuttering her James Beard Award winning establishment, Prune, during the coronavirus pandemic.
The piece made waves in part because it introduced some deeply ingrained industry issues to mainstream audiences. Among hospitality professionals, Hamilton’s dispatch sparked new conversations about the stability of the business. Most of all, what it’s made clear is that the hospitality industry was in trouble long before the pandemic arrived.
All bars and restaurants share certain challenges—razor-thin profit margins, politically regulated supply chains and an inequitably compensated workforce. But each has its own struggles, too. In some areas, labor shortages abound. Elsewhere, volatile real estate markets stifle openings and force otherwise promising businesses to fold.
If there’s any upside to the shutdown, it’s the chance to reevaluate the industry’s structural inadequacies and hopefully create a more stable business model.
“It’s clear that many of the features of the pre-pandemic industry can’t last,” says Rafa García Febles, beverage manager and sommelier of Le Crocodile at Brooklyn’s Wythe Hotel. “From the dangerously thin operating margins to the low wages that make artificially low food costs possible.”
“The hospitality industry is due for a ground-up overhaul,” agrees Daniel Majid Mirzakhani, sommelier and head bartender at 4 Charles Prime Rib.
What might that entail, exactly?
“Pay structure, first, needs to be changed,” says Omar Tate, founder of Honeysuckle, a pop-up dedicated to Black culture. “Minimum wage made it so that you can pay someone very small amount of money to do an exorbitant amount of work.”
Whether someone cooks $300 Michelin-starred tasting menus or $6.99 Applebee’s lunch combos, they probably earn minimum wage. The federal minimum is $7.25 an hour, while state wages range from $5.15 (Georgia) to $13.50 (Washington). New York City and Los Angeles require untipped employees to be paid $13.25 to $15 an hour.
Meanwhile, front-of-house positions like bartenders and sommeliers receive tips on top of hourly rates that start at $2.13.
“One of the things this [pandemic] has exposed is, all of a sudden you have people making more on unemployment than they would normally,” says Dave Seel, founder of Blue Fork Marketing, and cofounder and president of the Baltimore Restaurant Relief Fund.
While federal pandemic unemployment assistance boosts benefits for out-of-work bar and restaurant professionals, it also exposes endemic disparities between front- and back-of-house incomes.
“My husband is a sous chef and he’s making more money on unemployment than he did in the kitchen,” says Claire Yost, lead sommelier, Sagamore Pendry Baltimore. “Actually, it’s more money than he’s ever made as a sous chef, and he’s been in the industry for 10 years.” Yost, who typically receives tips, earns less on unemployment.
“All of a sudden you have people making more on unemployment than they would normally.”—Dave Seel, cofounder and president, Baltimore Restaurant Relief Fund
Omolola Olateju, a hospitality worker and founder of the digital community Black Girls Drink, proposes bars and restaurants eliminate tips altogether.
“Tipping is not an adequate structure to guarantee livable wages for workers,” says Olateju. “The amount someone tips is relative to the unconscious bias held against you with regard to race, gender and age. Statistics show tips are higher for younger, white and pretty people, regardless of if you actually performed the job well.”
Offering bar and restaurant workers livable, untipped wages will require business owners to rethink accounting, especially since previous attempts to introduce tip-free establishments have had mixed results.
Honeysuckle’s Tate thinks the shutdown can provide insights on how to create a more financially viable future. A few bars and restaurants remain operational because they pivoted to delivery or catering, or now sell groceries. This sort of adaptability will be crucial when restaurants reopen.
Derek Brown, owner of Columbia Room in Washington D.C., hopes the current model, wherein bars and restaurants can sell takeaway cocktails, remains possible when businesses reopen. He also thinks customers might need to pay slightly more to subsidize employee pay and business stability.
“I don’t want to raise the price,” says Brown. “I want the price to reflect the real cost of training, production and cost of ingredients.”
“It’s going to suck asking people to pay more for an entrée, but if that means that your cook doesn’t need EBT [electronic benefit transfer system], be clear and transparent about that,” says Rachel Anderson, owner of Vikings and Goddesses Pie Company in Saint Paul, MN. Instead of a surcharge for employee healthcare or sick leave, Anderson suggests building it into prices. “We need people to understand the true cost of eating out.”
When they reopen, bars and restaurants can collaborate on more sustainable business practices, too.
“It would be nice to have a collective to say, ‘Hey, these are the farmers we need to support locally. How can we make it more economical for them? Could we have them all deliver on Thursday?’,” says Sara Bradley, chef/proprietor of Freight House in Paducah, KY. “I think that would be a nice outcome, if we look at each other and ask, how do we support our other community establishments and businesses?”
In Brooklyn, Rafa García Febles sees immense value in a collective effort.
“We have the opportunity to build a fairer, more equitable, more responsible, more considered world of hospitality, if enough of us try. It would be a shame to let that go to waste.”