“The Tipping Point,” Feature, 2/18
I’m Losing Sleep at Night
Nice job on this piece. We’re in interesting times, for sure, and growing transparency and understanding of wage structures, minimum wage, tipping for service, wage equity between workers in restaurants, etc., is awesome. I would add a few comments after reading this: The restaurants I’m in contact with who are attempting to find ways to narrow the gap between service employees and kitchen workers are serious about that gap. Doing away with tipping is one path toward this goal, but creating tip-share structures that allow kitchen employees to benefit from those tips is another way (one that is legally poorly defined, and worrisome because of its vagueness).
Also, even in my casual restaurants, our servers are better compensated than our kitchen workers, despite the fact that our kitchen workers’ hourly wages are substantially higher. Minimum wage increases affect our service staff much more than our kitchen, because those employees derive much more of their compensation from tips. This is a fact in most restaurants, regardless of model — the size of the gap varies, but there is almost always a gap.
Measure FF also includes a mandatory sick time requirement for all employees, which will raise all wages by 3 percent (one hour per thirty worked in paid time), even for our highest paid workers. When payroll percentages — in relationship to total expenses — in restaurants range from the high 20s to the high 30s (ours is on the high end of this scale), this is also a significant increase in cost. One thing that many non-restaurant folk miss is that there are several associated costs that many restaurants must pay on each dollar of either sales or wages, including things such as:
• rents, loan payments, investor dividends or other charges based on percentage of sales
• employee-paid payroll taxes (based on dollars of payroll)
• workers compensation insurance (based on dollars of payroll)
• business tax (a percentage of sales)
• credit-card processing fees (a percentage of sales)
All of these additional overhead charges compound so that a single dollar that needs to go to the bottom line (to pay increased wages) requires much more than a dollar in sales.
Also, there is a real elasticity in pricing — when we raise prices, customer spending patterns change. We won’t know what the longterm impact of this is for quite a while. I suspect that in my restaurants, we’ll be tweaking prices for much of this year to regain stability. This is a pretty constant exercise, by the way, payroll and food costs are the two largest costs in restaurants, and we all live or die by making those numbers small enough as a percentage of revenue that we can eke out a profit at the end of the day.
When I modeled our wage increase in October, before I signed on as a supporter of Measure FF, I saw what looked like a payroll increase of roughly 10 percent. Going back more recently as I mapped out wage strategy for our restaurant, I modeled a number closer to 13 percent. This changed because our mix of service employees to kitchen workers increased (we’ve been expanding our table service offering), the mix of salaried and hourly workers changed, and my model got a bit more sophisticated (accounting for payroll tax loading, workers comp increases, and maintaining my required gross margin).
When I initially wrote my piece in support of Measure FF, I thought I could get by with a 5–7 percent price increase, but now we-re shooting at a 9 percent increase. I wrote that folks might pay $1 more for a burger, and I think that’s about right. This is a scary big increase for me. I wouldn’t do it if I could afford not to.
I take price increases seriously. They literally keep me up at night — I haven’t been sleeping all that well recently because we’re in the midst of a series of price adjustments in various parts of our menu, and I’m worried that we’ll get something wrong as we go. The alternative is to change all our prices at once, which would be even more nerve-wracking. I am highly motivated to provide good value to folks who visit my restaurants.
On the other hand, I take my profit margin seriously as well — if I didn’t, I would go out of business. I read a piece somewhere a couple years ago that was talking about restaurants being always doomed to facing unfair competition from others who will eventually go out of business because they set their prices too low to run sustainably. I can’t make that mistake, so I set my prices where they need to be, and adjust service, food quality, and other factors until there is a balance between customer willingness to pay and our ability to deliver while making a profit. In the best of times, this happens and everyone goes home happy. In harder times, not so much. Enough out of me.
Sal Bednarz, owner of Actual Cafe and Victory Burger, Oakland
It’s About Paying People a Living Wage
Sal Bednarz and others, as long as you keep serving quality food and employee friendly people I will keep patronizing your businesses, even with a 15–20 percent increase, because as a nation we really need to get better at paying people a living wage.
Additionally, all of us small business owners have costs that patrons/clients can’t imagine (my personal favorite is the zoning tax paid by Oakland businesses that have a virtual location and no physical one) so that is part of the cost of doing business.
While this is new territory for Oakland it seems to me the right thing to do to take measures toward paying people a wage that can promote financial stability and independence. If the current iteration ends up not working, we should just be smart enough and creative enough to go back to the drawing board and come up with something else that might.
Ainka J. Fulani, Berkeley
“Oakland City Council Stumbles Again,” Seven Days, 2/18
If Richmond Can Do It, Why Not Oakland?
Is it beyond the imagination of the Oakland city government to “do it themselves,” by which I mean bringing together the fallow industrial/retail property with the currently unemployed retail food workers (clerks, cashiers, butchers, produce buyers, et. al.) to create a worker-owned co-op with the city acting as a temporary partner — that might help to get the project funded.
One would think that someone would have learned something after the fiasco of the 2013 Oakland City Council spending $1.1 million on a consulting firm to ensure competition on the garbage and recycling multi-year contract that resulted in one responsive bidder and no competition. The council was successful in making an award to a non-responsive bidder which, in turn, resulted in the city being sued.
It’s astonishing that Richmond could have the thoughtfully progressive city government that, in every respect, Oakland lacks.
Stephen Shuttleworth, Oakland
“Berkeley’s Anti-Union Shift,” News, 2/18
Unions Are Not Always Good
It’s important to remember that unions aren’t a universal good thing — they simply exist to benefit their members, often at the expense of the people and communities they serve. Consider this quote from the story: “And I’m not guaranteed to have a job. They can cut me loose at any time for any reason.” It’s easy to empathize with Mr. [Patrice] Roland here, but when people are “guaranteed to have a job,” big problems arise. When union employees are rendered un-fireable, it’s easy for them to become lazy and incompetent (see: BART employees, Caltrans, etc.) because there’s no longer any motivation to work hard.
In cases like BART, where the workers provide a needed public service, these union requirements can end up screwing the public just to benefit a select group of insiders (see: the BART strikes, where people making $30,000 a year couldn’t get to their jobs because people making $80,000 a year wanted pay raises).
Anyway, I know it’s in the Express‘ liberal DNA, but let’s try to avoid the knee-jerk reaction of “unions good, non-unions bad.” It’s a bit more nuanced than that, and often ends up being the opposite from the public’s perspective.
Max Chanowitz, Oakland
The City Is at Fault
There are always isolated complaints about unions, but overall they serve to counterbalance the enormous power of corporations. As far as citizens contacting the City of Berkeley and being shut out from public information, an Public Records Act request should be filed.
It is the fault of the vastly overpaid city manager, an invisible administrator who seems to not understand that they work for the people, not the big money interests. They, of course, have fine jobs being paid in excess of $200,000 plus a 30 percent benefits package that taxpayers have to strain to pay.
And what do taxpayers get? No release of contract information that should be public information. It is also the fault of our mayor who has seen too many seasons come and go and won office as if it were some sort of prize. He seems disinterested and tries to distance himself from the machinery of government.
A new broom needs to sweep clean some of the ossified administrative deputies and heads of departments who with their ethereal pay have long forgotten the plight of what good old Leona Helmsly called “the little people.” Those little people are you and me and we are not being properly represented in Berkeley’s city government.
Steve Redmond, Berkeley
“OPD’s War on the Poor Needs to End,” Seven Days, 2/11
Dickensian Debtors’ Prisons Have Arrived
Robert Gammon’s article draws two important conclusions that I wish to highlight: the failure of one of two license plate light bulbs presents “no real threat to public safety,” and that some vehicle repairs mandated because of citations are “often not that necessary.” I wager that no one in history has been harmed due to non-illumination of a license plate light bulb.
I hope that the well-educated and politically active Bay Area will soon realize the consequences of our path into criminalizing everyday life. These mistakes are not solely limited to the war on drugs and mass incarceration, although that is a large part of it especially with mandatory minimum sentencing.
Mr. Gammon’s article highlights a disturbing national law enforcement trend: that of armed tax collector. This matters a great deal because Dickensian private debtors’ prisons have arrived and are thriving in the United States. Collection of court fines made up 20 percent of the Ferguson, Missouri city budget this past year, helping fuel the anger present in that community, as a largely white police force harasses its black citizens. It was only after a massive public shaming campaign that Bill Gates started divesting his close-to-$200 million investment in G4S and GEO Group, two of the largest private prison operators in the world that are guilty of torture, among other wrongdoing.
Here in the Bay Area, I usually align myself with lefties, whether it’s ending marijuana prohibition, standing up for same sex marriage rights, or beating back Oakland’s Domain Awareness Center. There are simply not enough libertarians to mount opposition to the loss of freedom due to government encroachment upon our daily lives. I practice the Non-Aggression Principal. Stated simply, as an adult I can do whatever the hell I want unless it will harm someone else. This principal is currently being misused by anti-vaxxers, where personal beliefs may, and likely have, led to the harm of others.
Mr. Gammon’s final thought does not go far enough. Deprioritizing vehicle code violations, while better than nothing, won’t cut it. Other states are making it illegal to wear a hoodie, and yoga pants, in public. There will always be something to issue a citation for if our mindset stays the same. Wholesale repeal of code at the federal, state, and local level must occur so that personal freedom and many parts of our daily lives can progress unimpeded.
Brian Hofer, Oakland
Our February 25 Insider’s Guide story, “Oakland’s Outdoor Art Exhibit” erroneously stated that the mural in the Fruitvale Bart Station parking lot includes the art of Cannon Dill. In fact, Dill’s contribution to the wall was painted over by artist Evan Wilson. Our February 25 Insider’s Guide story, “Where to Get Your Drink On,” should have stated that our list of the top twelve dive bars were from cities west of the hills — not east. And our February 25 news story, “What the Frack?” misstated Pete Castelli’s job title. He is the executive director of SEIU 1021 — not the president.