Thursday, August 7, 2014

Restauranteur Chastised for Quantifying the Bottom Line on Forced Wage Increases

Short of a bad review by the local food critic, publicity over the existence, cuisine and quality of a restaurant can be a make-or-break component of getting an eatery up and running, and keeping it up and running.  (See, I pay attention when Gordon Ramsay is repairing Kitchen Nightmares). I do wonder about the publicity around one restaurateur's decision to candidly state, on customer bills, the itemized price for his forced compliance with a Minnesota law raising that State's minimum wage. You can read about Oasis Cafe, and its owner's decision to tack a $0.35 minimum wage increase fee onto each customer transaction here.

Mr. Beemer wants his clientele to know what the impact of an increase in the minimum wage is, and the identities of those who will pay for that increase (the customer).  His clientele, or some of them, and some sector of "living wage" activists object to his decision and his use of the restaurant ticket to promulgate his message.  For me, this is one of those simple and tough decisions.  Beemer risks displeasing a portion of his clientele, thus driving them to competitors.  Yet, for me, this is the essence of the liberty of speech.  A restaurateur simply making plain what, it seems to me, even a simpleton should know:  if you increase the price of doing business, then you will increase the cost associated with buying from business.

As I see it, this restaurateur probably did something like the following:
1.  totaled up the man hours deployed in providing its quality of customer service, including wait staff, kitchen staff, and others affected by a state law mandated increase in the minimum wage.
2. multiplied that total number of hours times the .75/hour increase in that minimum wage
3.  took that product, which is a best estimate or guess of how much of the company's gross profits will go to covering the addition to the minimum wage, and divided it across some other factor, perhaps the number of service units required to produce that gross profit.
4.  that quotient, then, should approximate the .35 cent "minimum wage fee" that appears on the ticket.
My thoughts:

This is the kind of transparency PROMISED by the weasel in the White House ("The most transparent administration in US History") but never delivered (perhaps because there wasn't a service that could pick up his promise at one of the local golf courses where he spends his time.

This "fee" could have been rolled into the pricing structure.  Doing so would probably have made it unnoticeable.  The ticket could as easily have read:  Black and Bleu Burger, $9.15; Jalapeno, $0.70. Doing that would have hidden the restaurant's costs in the prices.  Doing so would, perhaps, omit the feel that some seem to be taking, of blaming others for this increase in prices.

In that sense, it could be like Aaron lying to Moses, "Geez, bubby, we just threw our gold earrings in the fire and out popped this idol."  We all know that raising wages (a decision that often can be an indication of a savvy businessman because such an entrepreneur knows that the single greatest factor in profitability is happy customers, and that the single greatest factor in creating and maintaining a happy customer base is creating and maintaining a happy employee base), raises costs.  Even if, as some claim, and even offer data to support, raising wages can raise net profits, the fact is that forcing another to do so is an act of political will, expressed by the exercise of republican principles of democracy, in the creation of a law requiring such wage increases.

So, now we have a restaurateur who, having been targeted by an act of political will, uses his own resources to express a message and divulge a fact.  As a constitutional law attorney, and a onetime professor of constitutional law, when I see an individual expressing in writing a message of this sort, I immediately recognize the trappings of an exercise in freedom of speech and of the press.

Now nothing protects the restaurateur from the ire of those customers who feel incensed that he has quantified and identified that COSTS of the wage increase.  They can stop doing business with him.  His choice may affect his bottom line.  Such, they say, is life.

But I admire his decision to quite the point in clear distinction for the discriminating diner.