Saturday, June 8, 2013

Weekend Attrition

NPR ran a story about the implementation of Obamacare in the restaurant industry that seemed just the tiniest bit biased, in that the only source they seemed to have spoken to was a representative of management, the CFO of Clyde's Restaurant Group in the D.C. area, who took a distinctly gloomy view of the whole matter, suggesting darkly that they might have to take the extra cost out of the customers' salmon entrée, ounce by ounce. Or use paper napkins. Or (very darkly) alter the staffing in some obscure way that I think meant putting on more part-time people.
"For one to two years it's been the number one issue on our radar," he says. "We're not trying to run away from it, but it's a frightening proposition."
I couldn't help wondering, in the first place, what about all those 26-and-under college students working the dining rooms? Three quarters of the staff are under 26; aren't at least many of them covered under parents' policies?
From a Johnny Rockets. Leonard Ortiz, Orange County Register.
And then: what about profits? Is this a corporation or a state government, for goodness' sake? Doesn't it make any money?

Well, it does. The Old Ebbitt Grill is the fifth highest grossing restaurant in the United States, with sales of $25 million a year, or upwards of $100,000 on a good night. They serve 20,000 oysters per week. And that's just one of 14 places in the group, which maintains its own training center in Georgetown for front-of-the-house employees. The group controller had been regularly supplementing her salary with embezzlement for a good ten years before anybody noticed it, by which time her total take added up to $647,000.

The Clyde's restaurants are also not noted for generosity to the workers,  either, earning themselves something like a zero rating in the Restaurant Opportunities Centers 2012 Diners' Guide. The actual rating seems to be under dispute (in the 2013 version of the guide, the listings are just missing), but the company acknowledges that its tipped workers get an hourly wage of under $3 as opposed to ROC's recommended $5, and that some non-tipped workers make under the recommended $9 minimum:
But I would say our average is definitely over $9 an hour, so we definitely should've gotten some credit for that.
It's not all that hard to find an alternative point of view, Scott. Looking at the ROC guide inspired me to Google some restaurants that rate particularly high on the workers' list—Danny Meyer's petit-bourgeois Union Square Cafe and proletarian Shake Shack chain—and landed me on an interview with Meyer himself explaining why he's a little worried about Obamacare: he's been offering employee health insurance since forever and sees himself losing a competitive advantage now that everybody else will be doing it too. But he still finds he's able to clear a profit, who knows why? I can't embed the video, but please watch it, here.
Image from ROC United, Behind the Kitchen Door. Curiously enough, it ran in a response to an extremely blinkered NPR piece about restaurant tipping, from two years ago. Why do you hate America, NPR?

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