One of my first jobs in Fort Worth, Texas was serving at Souper Salad. Making $2.13 an hour to take drink orders and bus tables, I essentially worked for tips. Some shifts brought $60 in tips, while after others I left with $7 in my pocket.
That’s one of the reasons I was so impressed when I moved to Washington state 11 years ago – wages were substantially higher – particularly in the restaurant industry where as a server you could earn minimum wage and tips.
With the rise of the minimum wage in Washington state, (currently at $11.50 an hour and slated to rise to $13.50 by 2020), it brings many more opportunities for employees within all industries.
I’ve stayed in the food industry, and Souper Salad turned out to just be the beginning. I’ve held many different roles, from busser to business owner. Currently, I am the Food & Farming Director at Sustainable Connections, and I’ve worked closely with our local food businesses for the past eight years. Our job is to keep a pulse on what’s happening with these businesses and support them so that our entire community can reap the benefits of a strong local food system.
Earlier this year, we decided to check the pulse – how are the restaurants, cafes, and food businesses we all love here in Whatcom faring with the changes? Just about 50 local businesses (47 to be exact) reported back.
▪ 72 percent say profitability is down from a 2017 year-to-date comparison.
▪ 78 percent are seeing an increase in the costs of goods (i.e. ingredients, supplies).
▪ and 89 percent of restaurants, farms and local food businesses reported labor costs are up.
In short, right now many are struggling. And, in an industry with tight margins, the struggle is worrisome.
The costs involved in running a restaurant are high. For typical industry standards, labor and goods make up 50 percent to 70 percent of a restaurant’s expenses. A locally owned restaurant that is sourcing from local farms and cooking from scratch would be on the high end of this. When you add in employee benefits, paying rent and utilities and operational costs, restaurants will have about 5 percent left over for profit. As long as the cooler doesn’t break, which it often does!
This means for a $12 plate of food, about .60 cents is left for profit at a locally owned restaurant that buys local ingredients.
With expenses up and revenue down, it’s a challenging climate for any independently owned food business. And, as of mid-June, 40 percent of food- and farming-business owners surveyed hadn’t paid themselves yet this year.
It’s a sensitive issue because as a community we voted to pay our people better, yet we live in a time where we are trying to pay as little as possible for food. In 1960, Americans spent about 17 percent of our monthly budgets on food. Now, it is under 10 percent. This may be a challenge as we move forward with rising wages. Higher wages equal higher costs.
Many of us envision a community where workers are compensated well, our downtown is thriving with unique restaurants and cafés and our farmers also earn a living wage. How can we help support this vision we are creating, one that many of us voted for?
▪ We can choose a locally owned grocer for our grocery shopping.
▪ We can eat at locally owned restaurants. One restaurant owner once told me that in order to remain stable, they need each of their customers to support them at least once a month.
▪ We can partner with farmers to purchase local farm boxes (Community Supported Agriculture or CSA shares), go u-pick at the farm, or shop at the farmers market.
It’s important for us to be aware that prices going up means the value for employees at food businesses everywhere is growing, and we are all contributing to that in a meaningful way.
It’s also important to remember that minimum-wage employees making more money means that they are able to support other local businesses, pay taxes and be less reliant on social services.
By choosing locally owned businesses who are also supporting our community, we are investing in the health of our friends, our neighbors, our families and the place we live.