21.3.19

WHAT BERNIE SANDERS OR KSHAMA SAWANT CAN'T DO, THE INVISIBLE HAND CAN.

Madison restaurants’ struggle for staff nears a crisis point.  Artisanal food, foodie residents, atmosphere, all the rest, and yet the working conditions aren't great.
Surya Café, a vegan spot serving smoothies, snacks and sandwiches in Fitchburg, will open a second location in the old Garver Feed Mill on Madison’s east side this summer.

When head chef Lauren Montelbano thinks about staffing it, she shudders.

“It’s terrifying,” said Montelbano, who runs her current café inside a yoga studio with four employees. “I look at how many restaurants there are in the city and the suburbs. Where does staff come from for these restaurants?
Incentives matter, even inside the thirty square miles of socialist wishful thinking surrounded by reality.
The inability of Madison-area bars and restaurants to find and keep employees has been nearing a crisis point for years. Low unemployment in Dane County (1.9 percent as of December 2018) and a proliferation of new dining spots has led to more competition for fewer workers.

Those who start a job may not stay long. As of 2017, restaurants’ annual turnover rate was 72.5 percent, compared to 46 percent for the U.S. private sector overall. (Many people move in and out of restaurant jobs on a seasonal basis, so it’s not three-fourths of a restaurant’s full-year staff turning over each year.)

Restaurant consultant Sam McDaniel has been telling clients, “retention is the most important thing in the restaurant business.”
Strip away the numerology and the business bafflegab, and what the owners have to do is make sure the staff isn't motivated to sing an old country song.
“There’s a systemic failure in the hospitality business to create good jobs,” said McDaniel, who co-founded Graft on the Capitol Square and now works at the Goodman Community Center.

“It’s a chicken and egg thing,” he said. “Are we struggling with staffing because there aren’t enough people? Or is it that jobs are not good, so people don’t want the jobs?”

Restaurants get stuck in a cycle of constantly hiring and training workers who themselves might be juggling two or three jobs. It’s expensive for the restaurants and exhausting for everyone.

Many chefs said they don’t call references anymore. Once someone is in the door, she can start immediately. Some even rehire people they don’t want to work with, because they feel they don’t have a choice.

“Most of us are in such dire need,” Montelbano said. “It’s like, do you have a pulse and can you hold a knife? Great! You have a job.”

Madison’s not alone. Staffing challenges are universal in restaurants from Denver to Baltimore. In Chicago, “a surge of new openings, a smaller pool of immigrant workers and more opportunities for cooks in non-restaurant jobs with saner hours” has stressed the industry, according to a recent Chicago Tribune story.

“The squeeze is particularly profound at small independent restaurants without the allure of big-name backing or room in their budgets to absorb higher pay.”
Saner hours and better pay. Imagine that. Or perhaps a reality check: your artisanal veggie stuff only sells when it's cheap.
Madison is short on both of those things. Restaurant closures, the sudden spike in easy-to-train concepts like poke, and dark Mondays and Tuesdays at popular restaurants and bakeries all have some connection to staffing issues.

Wages are one part of the problem, particularly for cooks. Restaurants could charge diners more, but what kind of backlash will they get if the burger goes from $8 to $10?

It’s like a game of chicken. Raise the price on the wings to pay the dishwasher an extra buck an hour and give the fry cook a week off, and see your ratings dive on Yelp. But without a decent salary, those jobs are even less attractive.

“Food and labor are so expensive,” said Caitlin Suemnicht, chief creative officer of Food Fight Restaurant Group. “Something’s gotta give. Restaurants are going to have to start charging more. We’ve been battling it to keep it down, but sooner or later prices are going to have to rise. And no one wants to be the first one.”
Nobody might want to be the first one, but the place that stays open on Monday and Tuesday with higher prices might just be on to something. Remember the fundamental logic of competitive markets: price taking is a behavior in equilibrium, but the adjustment from equilibrium to equilibrium isn't well understood, even by experienced economists.
Last October, Stephen Carroll left Brasserie V, where he started as a sous chef in 2014. To give a snapshot of the kitchen situation now, Carroll offered a chef’s litmus test.

“In the last two years the biggest difference I’ve noticed is, how many days a week or a month do I find myself in the dish pit?” said Carroll. “There was a stretch last year at BV where we didn’t go a week fully staffed. At least one time a week something would happen, someone wouldn’t show up.”

Dishwashers, like fast food counter service workers, are among the lowest paid employees in the industry. Carroll called washing dishes the “hardest and least respected (job), but it’s more integral than any other part of the restaurant. We can’t put beautiful food on dirty plates.”

Over the past few years, those in charge of restaurant hiring report scheduling interviews with people who didn’t show, cooks who worked a single shift and never returned, and a rash of no call/ no shows on all sides of the house. Carroll doesn’t think pay is the main reason for turnover.
Some of that might be a breakdown of manners, yes, and yet ...
“I think all of this comes down to the problem of, there’s too many restaurants in the city,” Carroll said. “I can’t say I’ve ever experienced anything like the situation in the last two years in the previous 15 years I’ve been in kitchens.”

As the consultant McDaniel pointed out, some restaurant jobs don’t inspire loyalty. Nationally, line cooks make an average of $25,000 a year, according to the Bureau of Labor Statistics. In the front of the house, base pay for tipped workers in Madison is $2.33/hour, which makes a difference in cold, slow months like March. Front of house pay can vary wildly based on time of year, style of restaurant and accuracy of tip reporting, but the BLS claims that waiters make only $20,000 on average per year.

“In a large chunk of the industry, both high level — what would be considered great restaurants — and your normal, run of the mill, employees are seen solely as a cost to control, and not as an asset,” McDaniel said. “After years and years, the labor force has recognized that.

“When you combine that with a robust restaurant city where there are other jobs available, there is less reason for people to stay and deal with the crap.”
College towns might be great places to locate cheap and contingent labor, and yet, capital cities might be full of legislators and bureaucrats and rent-seekers looking for an environment in which to wine and dine those public servants; then there's the financial and technology sector, and a business model that relies on cheap and contingent labor might not work out so well.
Restaurants need to “normalize” jobs with basic amenities like sick days, health insurance and vacation days, McDaniel said. In the front of the house, month-to-month or unpredictable schedules may work well for people looking for a side or summer job but not for career employees.

“Hiring and scheduling practices are not keeping up with the way people are approaching these jobs,” said Brian Hamilton, an industry veteran currently working at Brothers Three and the Ohio Tavern. “The kids these days — I know that’s a common opening — they really depend on flexibility and that’s incredibly hard sometimes.

“There are ways you can go about alleviating that as the person making the schedule, but it’s a challenge on both sides, for the employee and the employer. There’s a serious deficit of talented, driven, career restaurant people, and that’s what this business needs more of in Madison.”

Becky Schigiel is the former director of the Worker Justice Center and worked on the Just Dining Guide from 2012 to 2015. The guide, which is no longer updated, focused on working conditions in downtown Madison restaurants.

In the process of creating the guide, Schigiel noticed that some employers had grown antagonistic, aiming to “keep labor as low as possible no matter what.”

“There’s this small business mentality, ‘I’m giving those people a job and they are screwing me over,’” Schigiel said. “A job is not a gift. You can’t open your doors if nobody’s washing the dishes, waiting the tables.”
On the other hand, you can't open your doors if nobody wants to wash the dishes, or if your pay packets are not career focused. Talent and drive still command a premium.
Pay for cooks has finally started to rise. Epic Systems in Verona recently posted $19 an hour for line cooks. Palette Bar & Grill, coming into Hotel Indigo, advertised $15-$17/hour for the same. Tangent, open since December, is offering up to $15/hour for night line cooks, and the newly opened Portillo’s is at $12-$15/hour for cooks.

Food Fight’s group of 19 restaurants and one bakery in the Madison area saw turnover start to slow after giving a $1/hour increase to every kitchen employee and implementing a $13/hour minimum wage for all kitchen staff. It represented an investment of $500,000 in labor.
Incentives matter.
Job boards teem with offers for cooks, servers, delivery drivers and bartenders. Not uncommon are $200 sign-on bonuses. Capitol Lakes, a retirement center downtown, posted a sign-on bonus for up to $1,000 for line cooks. Some promise no nights or five-day weeks, bus passes, paid time off after a year, dental and health insurance.
There's no discussion in the article about higher pay for those evenings and weekends, and yet, that is another margin along which to optimize. Particularly with the rent-seekers gathering after the legislative sessions close for the day.

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