WA S H I N GTO N
RESTAURANT
October 2014
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MINIMUM WAGE
TIMELINE 1990–2017
SEATTLE MINIMUM WAGE POLICY DOES IT HAVE YOUR BACK…OF THE HOUSE?
D PROFITABILITY R THROUGH BETTER I V E MANAGEMENT
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INIMUM WAGE TIMELINE
Inside
2010 Menu prices increase 73 percent since 1998 in order to keep pace with the minimum wage. The average fast-food meal will cost more than $10 compared to about $6 dollars in 1998.
88 ative 518 is passed by Washington voters. It increases wages to match federal minimum and includes a tip credit.
1990 Union membership begins to slowly decline from 20 percent to 11 percent during the next 20 years.
1998 Initiative 688 passes, making Washington the first state to index minimum wage to inflation. Washington will now use the federal CPI to increase the state’s minimum wage each year. The CPI measures average price changes for goods and services purchased by urban wage earners and clerical workers.
14 10
2012 SEIU begins a multi-million dollar campaign for minimum wage increases, creating the “worker center” Fast Food Forward to target fast food establishments without union rules. Labor unions cannot use extended picketing, disruptive protests or secondary boycotts, but worker centers are not prohibited from doing so.
1999 Washington’s minimum wage increases from $4.90 to $5.70 because of I-688.
Jan. 1, 2008 State minimum wage is $8.07.
n. 1, 1990 te minimum wage $4.25.
2012 More than 28 percent of Washington’s 16-19 year olds are unemployed -- the seventh highest unemployment rate in the nation for this age group.
July 24, 2008 Federal minimum wage is $6.55.
April 1, 1990 Federal minimum wage is $3.80.
Jan. 1, 2009 State minimum wage is $8.55.
Sept. 1, 1997
July 24, 2009 Federal minimum wage is $7.25.
State minimum wage is $5.15
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WA S H I N GTO N
RESTAURANT
October 2014
M
IN THIS
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G
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I
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ISSUE...
MIMIMUM WAGE
TIMELINE 1990–2017
SEATTLE MINIMUM WAGE POLICY DOES IT HAVE YOUR BACK…OF THE HOUSE?
October_2014.indd 1
Features 10
Minimum wage in Washington state
14
Minimum wage timeline
16
Seattle minimum wage policy: Does it have your back…of the house?
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Minimum wage impacts on Washington restaurants
September 2013 Seattle mayoral candidates announce support for a $15 dollar minimum wage.
Federal minimum wage is $5.15.
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Other stories 6
Lex on Tech: Mobile payments become mainstream overnight
7
News Briefs
9
Unions and restaurants – How union goals can harm you
20
A conversation with Morgan Hickel, Seattle Restaurant Alliance’s local government coordinator
22
Fuji Sushi: A taste of Japan in Seattle’s International District
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HEALTH CARE: Are you ready for open enrollment?
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900,000 voices. Will they make you or break you?
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Calendar/New Members
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Marketplace
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Drive profitability through better beverage management
On the cover
Keeping financially afloat is a primary concern for restaurateurs. In a business where operating costs are high, profit margins can be small and public policies, like minimum wage laws, often make things even more difficult, restaurant operators need all the help they can get. This issue of Washington Restaurant Magazine is full of information that will help your restaurant succeed.
9/24/2014 2:05:56 PM
October 2014 | 5
Lex on Tech EDITORIAL STAFF Publisher, Anthony Anton Executive Editor, Lex Nepomuceno Managing Editor, Paul Schlienz Contributing Editor, David Faro Contributing Editor, Stephanie Davenport Research Editor, Sheryl Jackson Art Director, Lisa Ellefson WRA EXECUTIVE COMMITTEE Chair, Phil Costello Stop n’ Go Family Drive In Vice Chair, Chad MacKay El Gaucho Hospitality Secretary/Treasurer, Mark Chriest Oki Developments, Inc. Immediate Past Chair, Bret Stewart CenterTwist, Inc. WRAEF President, Gary Sutter Northern Quest Resort & Casino WRA EXECUTIVE TEAM President and CEO, Anthony Anton Vice President, Teran Petrina Director of Government Affairs, Bruce Beckett Director of Communications & Technology, Lex Nepomuceno Director of Education, Lyle Hildahl Director of Internal Operations, Bekah Cardwell
510 Plum St. SE, Ste. 200 Olympia, WA 98501-1587 T 360.956.7279 | F 360.357.9232 www.warestaurant.org
Letters are welcomed, but must be signed to be considered for publication. Please include contact information for verification. Reproduction of articles appearing in Washington Restaurant Magazine are authorized for personal use only, with credit given to Washington Restaurant Magazine and/or the Washington Restaurant Association. Articles written by outside authors do not necessarily reflect the views or positions of the Washington Restaurant Association, its Board of Directors, staff or members. Products and services advertised in Washington Restaurant Magazine are not necessarily endorsed by the WRA, and do not necessarily reflect the opinions of the WRA, its Board of Directors, staff or members. ADVERTISING INQUIRIES MAY BE DIRECTED TO: Nina Booth Allied Relations Manager 425.220.7778 ninab@warestaurant.org Washington Restaurant Magazine is published monthly for Association members. We welcome your comments and suggestions. email: news@warestaurant.org, phone: 800.225.7166. Circulation: 6,310.
6 | |www.warestaurant.org warestaurant.org
Mobile payments becomes mainstream overnight By Lex Nepomuceno, executive editor Whether you consider yourself an “Apple person” or an “Android person,” Apple’s impact on consumer behavior is undeniable. Tablets languished for years until Apple introduced the iPad. Smartphones littered the marketplace for more than a decade before reaching mass appeal through the introduction of the iPhone. Now, the same can be said for mobile payments through Apple’s introduction of Apple Pay. There have been some great trailblazers in mobile payments, such as Starbucks use of loyalty cards through its apps. Companies such as COIN are attempting to consolidate credit cards into a single solution. However, no one has seized the market to become the de facto mobile payment platform – until now. During the September 9 product launch of its new iPhone models, Apple made its most far reaching announcement with a mobile payment solution that will surely set the standard for the retail and hospitality industries or any other industry, for that matter. The company singlehandedly solved a growing angst amongst consumers regarding the security of their private credit card information. Just a week before the announcement, Home Depot confirmed that its systems had been compromised and that millions of credit card numbers may have been stolen. Almost a year earlier, “Black Friday” was tarnished through the Target security breach, which compromised even more credit card numbers. There are three main reasons why Apple Pay will spur ubiquitous adoption of mobile payments while others have yet to make a dent in the marketplace: 1. Apple’s system completely takes the retailer out of the credit card number-storing business. Even Apple won’t store credit card numbers. So if another major retailer gets hacked, all the hackers will get will be gibberish since there will be no credit card numbers to be stolen, bought and sold. 2. The checkout process will be easier for both consumers and retailers. Through Apple Pay’s use of biometric verification, consumer identities are confirmed with a fingerprint, removing the need to ask and check for ID. Apple has also made it simple to add credit cards, and is utilizing NFC (near-field-communications) to transmit the payment data. This is considerably faster and more secure than using physical payment cards. 3. Expect rapid, widespread consumer adoption only a company like Apple can jumpstart. Whether you like it or not, “Apple people” have incredible spending power. They also like to use their new toys, and Apple Pay will be one of these new toys millions of consumers will want to use right away. In fact, the company boasts that Apple Pay will be used at over 220,000 locations at launch. If you are not one of these 220,000 locations, your competitors who do adopt this technology could easily leave you behind. 2014 will be remembered as the year that made mobile payments “cool” and mainstream. So what are you waiting for? At least look into it. This is one big consumer trend your business can’t afford to miss out on. For objective details on trends and statistics relating to mobile payments, check out our special Washington Restaurant Market Watch article on mobile payments at http://warestaurant.org/blog/washington-restaurant-market-watchready-or-not-theres-a-mobile-payment-system-in-your-future/. ■
Primary Source of Information | News Briefs Restaurant industry ranks No. 1 on this year’s annual Gallup Poll The restaurant industry is regarded as the top business sector in America according to the results of the annual Gallup Work and Education poll released last month. Restaurants have remained one of the most highly viewed industries since Gallup started its annual poll of consumer perception of industries in 2001, reclaiming the top spot last held in 2007. In addition, this year’s poll recorded the most positive rating on record for the industry. “Restaurants are the beloved cornerstones of communities across the country,” said Dawn Sweeney, president and CEO of the National Restaurant Association. “From the local sandwich shop to the city steakhouse, the restaurant industry provides job opportunity to 13.5 million Americans and has become an essential part of our everyday lives.” According to National Restaurant Association research, nine in 10 consumers say they enjoy going to restaurants, and two in five consumers say restaurants are an essential part of their lifestyle. One half of all adults have worked in the restaurant industry at some point during their lives, and one third of all Americans got their first job working in a restaurant. ■
Study finds local restaurants provide pathway for American dream A recently released study titled “Who Works in the U.S. Restaurant Industry” details the opinions of nearly 5,100 Americans, ranging in age from teens to those 65 and older who occupied positions within restaurants at nearly all levels. The study shows what the Washington Restaurant Association has been saying for a long time. “Restaurants get people moving upward. Whether it’s on the job training, an entry way into the workforce or a second chance at employment, they are often the first step towards success for many people,” said Anthony Anton, WRA president and CEO. Read the complete article at http://wra.cc/wra1014b. ■
Restaurants roll out the welcome mat for foreign tourists The Northwest has become a major destination for Chinese tourists. “We’re going to see an explosion [of Chinese tourists] over the next few years,” Chad McKay, El Gaucho’s CEO and the former chairman of the non-profit tourism promotion group Visit Seattle, told the Puget Sound Business Journal. For the first time, Chinese tourists are likely to exceed the number of Japanese visitors to the Puget Sound region. Potentially, as many as 100,000 Chinese nationals could visit Seattle in 2014. “The influx of Chinese tourists is a major source of revenue,” said Tom Norwalk, president and CEO of Seattle’s Convention and Visitors Bureau, “China has become the No. 1 tourist market. We expect to see this trend continue because China is growing so rapidly.” This is a very big deal for restaurants, retail and lodging. According to Norwalk, tourists, including foreign and domestic visitors, spend $6 billion each year in King County alone. For the complete article, go to http://wra.cc/wra1014a. ■
Beware of fraudulent Longview water letter Recently, some WRA members have received a letter regarding an issue with the Longview water system. This letter appears to come from the WRA, and asks for your input and action regarding the city of Longview’s recent changes to their water system. The WRA did not author this letter, and has not taken a position on the issue. If you have further questions about the letter, please contact us at (360) 956-7279. For information regarding the public water system in Longview, please visit www. mylongview.com. ■
October 2014 | 7
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Unions and restaurants – How union goals can harm you
RECAP:
The scene in front of us is straight out of an old western – two of the most well-known gunslingers stand on either end of town; the innocent townspeople stare out the dirty windows, likely victims of the pending crossfire. The town leaders are pacing, worried about the aftermath. Instead of wearing cowboy gear, one of the gunslingers is dressed in a purple shirt emblazoned with union letters, the other is wearing a burgundy visor showcasing a corporate logo. Instead of guns, both have millions of dollars in their holsters. This is not David vs. Goliath; this is two Goliaths. Last month, in part one of this four-part article, we reviewed how we got we got here. In part two, we are looking at how this showdown could impact the regulatory environment for local restaurateurs. Small businesses are unlikely to ever be a part of union organizing efforts, but they will be affected by the union’s plan. To successfully organize, unions must first mandate changes in the restaurant model Last year SEIU spent more than $38 million to move its plan forward. This is a major effort, and it is being very strategic. For unions to successfully organize national corporations, they must transform the playing field. With the activities in Seattle, we learn more about what the union agenda is and how it is damaging to local restaurants. So what needs to legally change for unions to triumph? At least the following: 1. Restaurant wages must be profitable for unions – Make no mistake, this is the union’s business, and businesses must show a profit. They make their profit by charging a percentage of a worker’s wage. Therefore, wages among hourly workers need to rise to a level that is profitable for unions. This explains the real reason unions are investing so heavily in the passage of a $15 minimum wage. 2. Part-time work must go away – No one wants to join a union for a part-time job. Therefore, the average hours per week need to increase to make
Anthony Anton, president and CEO
workers feel like it’s worthwhile to pay union dues. Proposals are floating all over the country that outlaw, restrict and financially punish those who offer part-time work. 3. Change the culture of a “first job” – No one wants to join a union for a first-time job that they are not likely to have in a year. In order to ensure employees join unions, the average age of the worker needs to increase or a picture of stuck workers needs to be created. The myth of the stuck worker is not backed up by statistics, but has been consistently messaged by unions. 4. Mandate benefits – Over the past 20 years, people have been expecting less and less from their employers and are seeking to be increasingly self-reliant. This is a major problem for unions that have relied on benefits as a main attraction. Requiring health care, paid sick leave, paid family leave, etc., might reopen a closed window for unions. 5. Make unionizing easier via legal channels – For unions, it is unprofitable to organize store by store. Unions need the legal ability to have a single target. They need to make franchisees and franchisors into one entity so they can be managed legally and not seen as small entrepreneurs. This is the reason for the recent Seattle and NLRB proposals. The story continues So with the risks to the regulatory environment identified, we return to this place out west – the tumbleweed blows across an empty street – a long camera angle shows the back of one gunslinger and the outline of the other on the far end of town. In next month’s third installment of this article, I will highlight the non-regulatory impacts to the restaurant industry. Although the showdown will continue between the two giants, the WRA will be actively fighting for you, our members. ■
October 2014 | 9
Minimum wage in Washington state By Stephanie Davenport, contributing editor Even before Seattle passed a $15 minimum wage, Washington already had the highest statewide minimum wage in the nation. We still do. Local restaurant owners are proud of this fact. If someone asks owners about their employees, you’ll hear about treating workers with respect and concern; like family. Many local restaurants not only pay the higher minimum wage, but also offer non-wage benefits. We are a progressive state.
literature suggests that moderate increases in the minimum wage help workers. However, considering that a $15 minimum is a 64 percent hike – more than twice the federal $7.25 minimum wage – the effects might well be different. Some restaurants may cut jobs. Others simply might not choose to open or expand in Seattle. Others could try to find ways to automate jobs. Seattle has made itself the testing ground, and the results have yet to be seen.
Another surprising detail: The recent push for $15 per hour is actually the result of millions of dollars spent by unions, not because of true dissatisfaction of restaurant workers. In a 2013 survey of 5,100 current and former restaurant industry workers, 88 percent of employees said they are proud to work in the restaurant industry. Another 84 percent believe a job in the restaurant industry is a good one to have. And more than eight in 10 respondents believe restaurants provide opportunities for people to succeed based on their own hard work.
History The first big debate over minimum wage in Washington was in 1998. Prior to that, the minimum wage had increased once via ballot Initiative 518, and most felt the raise was clearly needed since the state was lagging behind the federal minimum. Additionally, I-518 included a tip credit.
Most of America won’t perceive this, however. The recent trend is to see photos of fast food worker strikes on the news and think restaurant employees decided to picket all alone. In truth, strikes, in Washington, are being organized by the Service Employees International Union (SEIU) and unelected worker centers that are desperate to attract new members. The passage of the $15 per hour minimum wage, in Seattle, was their primary agenda, and they succeeded in passing a policy almost overnight that will impact thousands of people. With the institution of the new wage standards, Seattle joins the ranks of the highest paid minimum wage employees worldwide. The new minimum wage could directly affect a quarter of Seattle’s workforce by the time it phasesin over the next seven years. Economics 10 | warestaurant.org
However, in 1998, Initiative 688 passed and changed the state’s minimum wage forever. At that point, Washington’s minimum wage and the federal standards were the same. I-688 made Washington the first state to index minimum wage to inflation. From this point on, it increased annually. Washington soon had the highest statewide minimum wage in the nation. When I-688 passed, much like now, restaurateurs were concerned about what this would mean for their businesses. Labor costs are always one of the top expenses for a local restaurant. Our industry is resourceful. Business owners made adjustments to menu prices, hiring, hours of operation, insurance and some took loans. By-andlarge, the state’s restaurants survived. However, today there are three fewer people working at every restaurant than the rest of the nation, and unemployment, in Washington, grew steadily. Additionally, restaurant profit margins dropped. Today the average annual
profit a restaurant owner sees is $29,713. An average full-service restaurant owner, in Washington, will net around 4 percent, and quick-service nets about 7 percent. With the debt load to operate a business, this margin puts many local restaurants on thin ice. Restaurants would continue on this path until 2014. Concurrently, union membership was steadily declining nationally. Union members were also diminishing in Washington – a state that was once a union stronghold. In the 1990s, union membership was around 23 percent. By 2000, it was below 18 percent. This caused a panic for union organizers, especially at SEIU, the largest union in Washington. The union found success in gaining more members and media attention during a 2012 orchestrated walkout in New York City. By 2013, according to SEIU’s own data, it had spent more than $38 million to organize around the minimum wage issue. 2014 and the “new” minimum wage The first strike for organized labor and its million dollar investment came in SeaTac. In November 2013, unions pushed and solicited signatures for months in order to get a minimum wage proposition on the ballot. The law narrowly passed by only 77 votes out of an entire city of nearly 8,000 people. Along with setting the $15 minimum wage, the SeaTac law included the kind of employer mandates championed by organized labor. It also allowed for those mandates to be waived in a collective bargaining contract, possibly giving companies an incentive to enter into one. The WRA and other business groups challenged the legality of the proposition, partially winning the case. The King County Superior Court ruled that the city of SeaTac does not have the authority to set workplace rules within Seattle-Tacoma International Airport
because the aviation hub is owned by the Port of Seattle, a separate government entity.
fast-food strikes, SeaTac’s $15 initiative and the insurgent Sawant campaign dominated local political headlines.
Businesses within the airport were cut out of the proposition. Supporters, however, appealed the ruling. Before the Supreme Court issued a decision, the Port of Seattle agreed to a resolution. The resolution increases the minimum wage to $11.22 per hour, in 2015, and $13.00 per hour by 2017. The resolution also includes total compensation in the calculation, meaning tips, bonuses and credits for employer contributions to health benefits, retirement plans or education are counted as salary.
Former State Sen. Ed Murray won the race for Seattle mayor by 56 percent of the vote, and quickly began moving the minimum wage agenda forward. In December 2013, he created the “Income Inequality Advisory Committee” (IIAC), appointing David Rolf, president of SEIU, and Howard Wright, of the Seattle Hospitality Group, as co-chairs.
Following the SeaTac proposition, the Legislature reconvened and Rep. Jessyn Farrell, D-Seattle, introduced a bill to increase the minimum wage to $12 per hour statewide over a three year period. The measure did not pass. While most business groups were opposed to the legislation, some speculate the unions also didn’t want the bill to pass. Unions, SEIU in particular, have realized greater success by passing new wage laws on a city-by-city basis than at the statewide level. Passage of wage laws at the local level creates a confusing patchwork of different requirements for employers, preventing representation for business on a level that competes with union’s millions. The final step, thus far, was in Seattle. Unions considered a ballot measure, but found a quicker path to success with local legislators. Kshama Sawant, a socialist political activist turned candidate, announced her Seattle City Council run in March 2013. Her platform was based around the $15 per hour minimum wage. Eager to win, both candidates in Seattle’s hotly contested mayoral race jumped on board. By October,
In April 2014, the IIAC delivered recommendations to the mayor. Less than a month later, Mayor Murray announced a proposal for a $15 per hour for minimum wage. The WRA worked with the IIAC and the mayor to ensure that restaurants were considered in the final recommendations. Much of what local restaurants asked for was not included. However, like the Port of Seattle resolution, the Seattle plan uses a phased-in approach and inclusion of total compensation in the wage calculation. The mayor sent his proposal the City Council. Within weeks, the proposal was passed unanimously as a city ordinance. The national perception In addition to the unique set of circumstances in Seattle, minimum wage has become a focus statewide. National feelings about minimum wage have contributed greatly to support for the changes in Seattle. When President Obama spoke this past Labor Day, he said, “All across the country right now there’s a national movement going on made up of fast-food workers organizing to lift wages...” The millions invested by SEIU are working. A large part of its
MINIMUM WAGE IN SEATTLE NOW EMPLOYERS > 500 EMPLOYEES WASHINGTON STATE MINIMUM WAGE: PROSPECTIVE BINDING MINIMUM WAGE WAGE SCHEDULE MINIMUM WAGE W/ HEATHCARE (2.40% CPI ESTIMATED) (SCHEDULE A) (SCHEDULE B)
EMPLOYERS ≤ 500 EMPLOYEES GUARANTEED MINIMUM WAGE COMPENSATION (SCHEDULE C)
MAXIMUM ALLOWABLE NON-WAGE COMPENSATION
MINIMUM WAGE (SCHEDULE D)
Year
State wage
-
-
-
2015
$9.54
11.00
11.00
11.00
1.00
10.00
2016
$9.77
13.00
12.50
12.00
1.50
10.50
2017
$10.01
15.00
13.50
13.00
2.00
11.00
2018
$10.25
15.36
15.00
14.00
2.50
11.50
2019
$10.49
15.73
15.73
15.00
3.00
12.00
2020
$10.75
16.11
16.11
15.75
2.25
13.50
2021
$11.00
16.49
16.49
16.49
1.49
15.00
2022
$11.26
16.89
16.89
16.89
1.14
15.75
2023
$11.53
17.29
17.29
17.29
0.79
16.50
2024
$11.80
17.70
17.70
17.70
0.49
17.25
2025
$12.08
18.13
18.13
18.13
0.00
18.13
-
October 2014 | 11
success also comes from the economy. Despite the fact that we are slowly pulling out of a recession, most people feel their personal economic situation has not improved. This leads to viewing others in the same light. Therefore, most Americans believe income inequality is real. In 2013, the WRA initiated an extensive research program in partnership with the California Restaurant Association, National Restaurant Association, Association of Washington Business and Washington Roundtable. The findings revealed: More than half of voters do not feel they are “getting ahead” economically. More than 60 percent of participants support a hike in the federal minimum wage to $10.10 per hour. Most respondents felt large companies make profits at the expense of workers. More than 70 percent of participants believe higher wages lead to more economic activity. Another interesting result of the survey is that 59 percent of participants believe $15 per hour is too high for the minimum wage; however, nationally, people are concerned that the federal minimum wage isn’t keeping up with economic needs. The view in Seattle, while impacted by public support of minimum wage increases, is still radically different than the views outside of the city. 80% 70% 60% 50% 40% 30% 20% 10% 0%
61%
> 63%
35%
Support
~ 30%
Oppose
$15 an hour Statewide
Support
Oppose
$15 an hour Seattle
OUTSIDE OF SEATTLE, PEOPLE BELIEVE MINIMUM WAGE SHOULD BE A STARTING WAGE – NOT A LIVING WAGE. 80% 70% 60% 50% 40% 30% 20% 10% 0%
65% 49%
45% 30%
State
Seattle
Starting wage
State
Seattle
Living wage
INSIDE SEATTLE, PEOPLE BELIEVE MINIMUM WAGE SHOULD BE $15 PER HOUR VS. THE REST OF THE STATE. Current work in Seattle Although the Seattle ordinance will go into effect on April 1, 2015, the finer details of the law have yet to be smoothed out, 12 | warestaurant.org
and will be done so in a minimum wage rulemaking process expected to begin in early October. During the rulemaking process, many parts of the new law that are vague, unclear or, in some way, need further definition will be discussed, clarified and decided upon. Through constant contact with the mayor’s office and key individuals in various city agencies, the WRA has made it clear that restaurants and other members of the hospitality industry must be represented during the process. Shortly after the Seattle City Council and mayor’s office passed Seattle’s new minimum wage law the “Labor Standards Advisory Group” (LSAG) was formed to discuss and debate strategies for the city to do effective education, outreach, technical assistance and enforcement of all current city labor laws. In addition to minimum wage, the group examined mandatory sick leave, criminal background checks and wage theft. The Seattle Restaurant Alliance and Seattle Hotel Association have a representative on this group. The WRA strongly supports the participation of these hospitality groups and their work as the voice of restaurants on this issue. After two months, LSAG concluded its work and forwarded a set of recommendations to the mayor and Council. These recommendations came from a three month grueling debate and discussion between employer and labor organization representatives. LSAG’s recommendations are as follows: 1. Create a “one stop shop” within Seattle for employers and employees to have access to education, outreach, technical assistance and help with compliance as needed. 2. Education and outreach should be carried out in a manner that reaches the largest number of people in Seattle (in person, website, phone, etc.) and gives extra emphasis on women and minority-owned businesses as well as employers and employees for whom English is a second language. 3. If the city considers creating community partners through contracts to do education and outreach, those partners must be thoroughly vetted and, if chosen, held to high standards of integrity throughout the life of the contract. These contracts’ focus should primarily be to partner with groups within various ethnic communities who can reach employers and employees of those ethnicities in ways the city cannot or struggles to do so. 4. Enforcement is important. Note: Beyond this general statement, our two caucuses could not agree on a variety of the details of this recommendation. Instead, two different approaches were submitted on how Seattle should enforce its labor laws. What’s next? Undoubtedly, organized labor and other progressive groups will continue to pursue increases in the minimum wage in cities and other local governments.
Beyond minimum wage Of equal concern, however, is the ongoing pressure on local governments to enact labor and benefit policies unique to their communities. For example, policies requiring paid sick leave have been adopted in Seattle and SeaTac, and are currently under discussion in other cities around the state. These policies commonly have differing standards, making it very difficult for employers that work in, or serve, multiple cities to comply. Beyond paid sick leave, San Francisco is considering policies that would severely limit the ability of employers to hire parttime employees – instead, the city is considering requiring employers to hire full-time employees even if their workflow is better suited for a part-time workforce. Accordingly, while the minimum wage is of grave concern, the WRA is equally concerned over the challenges that would be faced by all businesses in the state under a patchwork of cityby-city wage and benefit laws. Washington is not alone. Cities around the country and even some states are seeing unions work to push ballot initiatives and local ordinances to increase the minimum wage and require additional employer paid benefits. The WRA is working to find restaurateurs that can talk to their local governments and with their local media about how the minimum wage will impact their businesses. Legislative action Soon, the state Legislature will reconvene and is likely to consider bills that would increase the minimum wage across the state and resurrect mandated employer paid sick leave from last session. Also anticipated: Unions will come forward with additional proposals to limit the use of part time workforces. The WRA will continue its work with members of the Legislature to find a compromise and statewide solution that values the differences of each community in the state while taking into account the cost of living. Ballot initiatives The 2016 general election seems distant, but the WRA would not be surprised if the labor unions are planning to pursue an initiative to the voters on the minimum wage and/or adding specific benefits. The ideas have widespread appeal, and, if they appear on the ballot, would lead to increased turnout of voters inclined to support those causes. Looking forward The WRA is exploring a number of options to address and protect our members interests. In doing so, we ask you to consider these questions and send us your thoughts and comments. Should the state consider enacting a comprehensive wage and benefit policy, and “pre-empt” the ability of local governments to enact city-by-city policies on these issues? It’s a difficult question. Voters and lawmakers historically have been
reluctant to limit the authority of local officials. However, with the prospect of city-by-city regulation of wage and benefits across the state, it may be time to have a serious debate on a statewide policy. This is also a challenging prospect for small and large business to consider - it could entail compromise. The WRA believes an open dialogue should be pursued. What do you think? The ordinance adopted by Seattle includes some important policies favored by the hospitality sector. But the ordinance contains a number of major problems including the differential treatment of large vs. small businesses and the phase-out of recognizing total compensation. The WRA will continue working to organize hotels and restaurants in Seattle. The WRA regularly communicates with elected officials, the media and other stakeholders on the impact of the ordinance. Furthermore, we will continue to work in person with the Seattle City Council and the mayor’s office on future changes to the ordinance. The WRA has not ruled out seeking amendments to the ordinance over the next three to seven years. In another interesting turn of events, in 2015, all the Seattle City Council members will elected by district instead of citywide. This election creates a unique opportunity to educate, engage in the election process and communicate the needs of the hospitality sector leading up to the 2015 elections. You can help The WRA is looking to create groups of ambassadors who are willing to tell their stories. It is a critical time for restaurants to start a dialogue their local officials, the media and legislators. The importance of local owned business owners communicating with elected officials and the media cannot be emphasized enough. The unions have very compelling messages in support of raising the minimum wage and increasing benefits for workers that have led to oversimplified and hastily implemented policies that could have severe impacts for many. The best way to combat this is for locally owned businesses to communicate:
How they help move people upward by providing training and career opportunities. How they contribute to the local economy and fabric of the community. That workers in restaurants are treated fairly. That locally owned small businesses need support to thrive and grow. The WRA will work with our members across the state to train, mentor and prepare them to communicate. Please let us know if you are willing to be a spokesperson for your business and part of a coalition of other WRA members affected by wage hikes. If you are interested in being involved please contact us at (360) 956-7279, ext. 110, or email stephanied@warestaurant.org. ■ October 2014 | 13
MINIMUM WAGE TIMELINE
1988 Initiative 518 is passed by Washington voters. It increases wages to match the federal minimum and includes a tip credit.
1990 Union membership begins to slowly decline from 20 percent to 11 percent during the next 20 years.
2010 Menu prices increase 73 percent since 1998 in part to keep pace with the minimum wage. The average fast-food meal will cost more than $10 compared to about $6 dollars in 1998.
1998 Initiative 688 passes, making Washington the first state to index minimum wage to inflation. Washington will now use the federal CPI to increase the state’s minimum wage each year. The CPI measures average price changes for goods and services purchased by urban wage earners and clerical workers.
1999 Washington’s minimum wage increases from $4.90 to $5.70 because of I-688.
2012 SEIU begins a multi-million dollar campaign for minimum wage increases. Labor unions cannot use extended picketing, disruptive protests or secondary boycotts, but worker centers are not prohibited from doing so.
Jan. 1, 2008 State minimum wage is $8.07.
Jan. 1, 1990 State minimum wage is $4.25.
July 24, 2008 Federal minimum wage is $6.55.
April 1, 1990 Federal minimum wage is $3.80. Sept. 1, 1997 Federal minimum wage is $5.15. State minimum wage is $5.15.
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Jan. 1, 2009 State minimum wage is $8.55.
2012 More than 28 percent of Washington’s 16-19 year olds are unemployed -- the seventh highest unemployment rate in the nation for this age group.
September 2013 Seattle mayoral candidates announce support for a $15 dollar minimum wage. July 24, 2009 Federal minimum wage is $7.25.
December 2013 WRA lead the legal challenge to the SeaTac ordinance is filed. King County Superior Court rules that the City of SeaTac does not have the authority to set workplace rules within Seattle-Tacoma International Airport because the aviation hub is owned by the Port of Seattle, a separate government entity. December 2013 Seattle Mayor Ed Murray creates the “Income Inequality Advisory Committee” (IIAC) and appoints David Rolf, president of SEIU, as co-chair. Restaurants are included.
November 2013 SeaTac voters narrowly adopt (by just 77 votes) a $15 dollar minimum wage and no recognition of tips. The ordinance included other employer requirements.
2014 Teen employment is down 50 percent from 2010. See why teen employment is important. Scan QR code below.
Jan. 1, 2014 State minimum wage is $9.32.
December 2013 WRA initiates an extensive research program with partners from the California Restaurant Association, the National Restaurant Association, the Association of Washington Business and the Washington Roundtable.
April 2014 The IIAC delivers its report to the Seattle mayor’s office. Much of what restaurants have asked for is not in the report. However, a phase-in time and non-wage compensation is included.
2015 Businesses within Seattle must increase their minimum wage to $11 per hour.
July 2014 Shortly after the passage of the $15 minimum Wage, in Seattle, a “Labor Standards Advisory Group” is formed to strategize plans for education, outreach, technical assistance and enforcement. The group will present its recommendations to the mayor within a few months.
May 2014 Mayor Murray announces a proposal to raise Seattle’s minimum wage to $15 per hour based on IIAC. The Seattle City Council passes the proposal with mild changes within weeks of starting discussions. Seattle has now passed one of the world’s top three highest minimum wages.
June 2014 The Port of Seattle negotiates an agreement that increases minimum wage to $11.22 per hour, in 2015, and $13.00 per hour, in 2017, and includes total compensation.
2014 WRA begins outreach beyond Seattle to prepare restaurateurs to handle minimum wage issues and union attacks within their business and in the media.
2017 Business within Seattle must increase their minimum wage to $15 per hour.
October 2014 | 15
Seattle minimum wage policy: Does it have your back…of the house? By David Faro, contributing editor
Restaurant managers are acutely aware of the discrepancies that exist in most establishments between the front-of-thehouse (FOH) – servers, hosts and various assistants, and the back-of-the-house (BOH), comprised of dish machine operators, prep cooks and line cooks. In most restaurants, servers have the advantage when it comes to an hourly wage. Income derived from tips often puts them in a wage category that makes the proposed $15 an hour look fairly inconsequential. Many servers who have entered a management trajectory will tell you that it took a few years before they came near to earning what they made per hour at the tableside. Servers are also aware that they can add a few tables, work a bit harder and increase their hourly wage, not by cents, but by many dollars in a single shift. It’s a good gig. Line cooks don’t have that advantage. They get paid the same, every day, every shift, every hour. Raises throughout the recession have been hard to come by. If you have managed a full-service restaurant, this is not news to you. What is news to many people, however, is that a line cook typically gets about $12 to $15 an hour already. So the argument for an increased minimum wage in the name of income equality really doesn’t mean that much to the professionals in the kitchen. For the BOH, the new minimum wage means that a dishwasher might make a bit more, but the increases just cannot continue up the line. Most current business models would struggle mightily to support carte blanche wage increases for the BOH. With the new policy, dish machine operators will be taking home the same amount as a line cook who worked diligently at her craft for many years to achieve her current wage. In the office, you have a manager who can’t bump her to a higher rate because his labor costs have been inflated to unsustainable levels already by the new law. Consequently, she is stuck. 16 | warestaurant.org
To say this is disheartening is an understatement. Want to make it worse? That same line cook diligently washed dishes when she entered the industry. She worked long hard hours in order to be promoted to a prep cook. Then, finally, she moved on up the line to a wage that declared her a professional. With the new policy in Seattle, her hard earned wage is seen as “minimum,” and, in order to keep the ladder of opportunity alive, needs the stratification that she has become used to kept intact. The new policy does not make that possible. As a result, the BOH goes practically nowhere. Instead, they bear the brunt of the adverse effects, have little to no immediate increase in their wages and can be sure that incremental raises are now a thing of the past for some time to come. The policy means that the BOH is left out of a large part of the so-called equalizing – in fact, almost all of it. It doesn’t stop there, though. The wage increase also critically diminishes entry-level opportunities for new BOH talent. Many of Seattle’s kitchen leaders will tell you that they cut their teeth, in their early years, working the dish room, learning how to say “Yes, chef!” while earning a sensible minimum wage. Their mentors were willing to train them and move them up the ladder precisely because the wage was in balance with their skill set and their relatively new status in the industry. $15 per hour doesn’t do that, however. Instead, it completely morphs the hiring terrain while it simultaneously disadvantages new talent looking for work. With the new policy, a manager is forced to get as much imbedded skill and talent from his labor dollars as possible. Training for the future becomes less important when simply staying afloat becomes the primary concern. The result for new BOH hopefuls? Closed doors everywhere. The result for the BOH personnel already inside? Along with their regular duties on the line, they must return to performing the support tasks that every kitchen requires because staff rosters have been slashed. In essence, seasoned personnel see increased responsibilities, but remember, most were already making very close to $15 an hour before the wage escalation, so the only real increase they see is in workload, not compensation. Many chefs see this coming. They also feel like their voice has gone relatively unheard in the debate so far.
A chef, in Olympia, anticipating that the wage discussion will soon be heading south, voiced his concerns when he said that he simply didn’t know how he was going to manage the increased labor costs. “I can’t figure it out,” he said, “Everyone is saying ‘get ready.’ For what? How do I get ready for this in any other way than shutting my kitchen down? It’s like asking someone to drive a car 1,000 miles on one tank of gas. It just won’t happen. The math doesn’t add up. To make it work, I would have to run my line with half the staff I have now, and that is after we have streamlined our operations to the leanest possible configuration in order to deal with the recession. It just won’t be worth it anymore – not for me, not for my line cooks and not for any kid who wanted to earn his chops by working hard in my kitchen.” He isn’t the only chef expressing the sentiment that the BOH gets the short end of the wage stick in Seattle. Celebrity chef Tom Douglas has long been a champion of the idea that the kitchen-labor side of hospitality is undervalued. As such, he started a BOH initiative to shed light (and dollars) on the
issue throughout his own company. He is a vocal proponent of tips as wages and is a total compensation advocate. Many times, in the last year, he has voiced his dissatisfaction with the new Seattle policy construction and process precisely because he is a champion of the BOH. Angela Stowell, of Ethan Stowell Restaurants LLC - an award winning hospitality company whose founder started in a dish room – says, “Unfortunately, for the restaurant industry, the policy does nothing to end income inequality. Under the mayor’s plan, the FOH will continue to be the people who see pay increases for at least five years while the back of the house will not see pay increases at all.” This is the story you hear from just about everyone who runs a kitchen in Washington state. The policy, built to address income inequality, will have the opposite effect for back-of-thehouse employees in most establishments or at least the ones that manage to keep their doors open. For the employees of the restaurants that can’t make it work and subsequently shut down? At those places, at least, we can be sure that the effect of the new law will truly be equal across the line. ■ October 2014 | 17
Minimum wage impacts on Washington restaurants By Sheryl Jackson, research editor
The Washington State Legislature will undoubtedly debate the question of raising the state minimum wage in the upcoming, 2015 session. Members of the Legislature asked the Washington Restaurant Association to gather important information on the cost structure and impacts of changes in the minimum wage on restaurants (including taverns, private clubs, and other hospitality sector businesses). The information will be used to educate legislators, the public and media on the economics of running restaurants (both quick and full service) and other hospitality sector businesses. Additionally, the information will provide WRA with data on the impacts of a change in the minimum wage. The information you provide is extremely important to our efforts. While a summary of the information will be prepared, please be assured that any data you provide will be confidential. All participants are eligible for a drawing for one $500 Visa GC. If you have any questions, please contact Sheryl Jackson at sherylj@warestaurant.org. Please take the time to fill-out the survey NOW by following the code that represents your business.
FULL SERVICE SURVEY
SCAN TO TAKE THE SURVEY! Use your favorite QR code reader on your smartphone.
HTTPS://WWW.SURVEYMONKEY.COM/S/9KGSZW5
QUICK/LIMITED SURVEY
FOR MORE INFORMATION:
HTTPS://WWW.SURVEYMONKEY.COM/S/JFVVWHT
http://wra.cc/mwage0914
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October 2014 | 19
A conversation with Morgan Hickel, Seattle Restaurant Alliance’s local government coordinator By Paul Schlienz, managing editor
Morgan Hickel wears a lot of hats. As the Seattle Restaurant Alliance’s local government coordinator, she represented restaurants’ interests during the city’s minimum wage debate, interfacing with the City Council and Mayor Ed Murray while also reaching out to restaurateurs and recruiting them as grassroots ambassadors to speak out on the $15 minimum wage. Washington Restaurant Magazine recently caught up with this dynamo of activity for some conversation about what she’s been doing and where the minimum wage issue may be headed. Q. Tell us about the Seattle Restaurant Alliance and what you do for it. A. The Seattle Restaurant Alliance is an arm of the Washington Restaurant Association. Our main mission is to develop an active network of restaurant owners and operators that are focused on all issues that impact the Seattle restaurant community. We represent more than 2,400 food service establishments. My job is to ensure they have a voice, and that their interests are heard. One way I help do that is by building up and managing the Seattle grassroots ambassador program. I was brought on to the SRA team in late January, right in the middle of the minimum wage discussion, so it was a crazy, busy time, and I was immediately tasked with recruiting ambassadors and finding the best way to utilize them. It took about a month or so to get that running, but when we did, our ambassadors really became our go-to people for any and all needs during the minimum wage debate. The program remains strong today, and we’re always looking for new opportunities. That’s been my main focus over the past 20 | warestaurant.org
few months, but I also do just a little bit of everything. I help the Seattle Restaurant Alliance with day to day operations and events. I interact with members and help them any way I can. I also attend issue meetings and represent them there. Q. How did you get into this line of work? A. I got into this kind of work because my family is very politically involved. It was almost inevitable that I would get involved in politics in one way or another. I went to the University of Washington, holding internships at various chambers of commerce around the South Puget Sound area. Shortly after college, I moved to Washington, D.C., and started working over there at a trade association. I loved D.C., and I had a lot of fun, but after about two years, I decided it was time to come back to the Northwest. I briefly worked as a campaign manager with some awesome people in Tacoma before they helped connect me with Josh McDonald, my colleague at the Seattle Restaurant Alliance. Q. What were the biggest challenges you faced in bringing restaurant operators together in response to the $15 minimum wage? A. There wasn’t a huge challenge in bringing the restaurant community together. This was a really critical issue. Restaurants were interested in it and wanted to be involved. One of my biggest challenges, and this is probably true for many of the industries during the minimum wage issue, was time. The minimum wage issue was extremely complex, and the process moved very quickly in Seattle. In order to really participate in the debate, people had to dedicate a lot of time to learning and keeping up with the issue, and participating in meetings and public hearings and so on. Running a restaurant is a full-time job. Many of these individuals were working 40 to 60 hours per week and participating in the minimum wage debate, which was also like a full-time job for many. Finding that balance between being able to run their businesses and participate in the minimum wage debate was a big challenge for restaurants.
Q. You also reached out to the hotel and lodging industry. A. Restaurants have been working in parallel with the Seattle Hotel Association on various issues over the past nine months. Mainly, the minimum wage issue is what brought us all together. Hoteliers and restaurateurs have a lot in common. They’re both members of the hospitality industry. We’re definitely different, and we don’t agree on everything, but that’s to be expected. Overall, our industries really complement each other. I think we’ve been very effective in Seattle. I hope we’ll continue that partnership moving forward. Q. What do you think will be the effects of the $15 minimum wage in Seattle over the long term?
labor standards work with the mayor and the Council. We’ve been working a lot on that recently. We expect a minimum wage rulemaking committee to begin work in early October. That committee will really hash out some of the finer details of the minimum wage law. The law was passed in June, but there are still some details that need more definition. The restaurant industry has been in constant contact with the mayor and the Council, and we expect to be at the table along with some other groups to help hash things out. That’s where we see it all going. The law will go into effect April 1. I know restaurants right now are planning what they’re going to do, and that’s all up to them. We’ll wait and see the real impacts, and we’ll move from there. Q. What do you find most satisfying about your job?
A. I honestly don’t know what the effects will be. I do know that for restaurants to continue to thrive in Seattle, they’ll have to make some tough decisions. We can all speculate and guess, but we won’t know the true effects until the law is implemented. That’s why it’s extremely important for the city to conduct its economic impact study so we can truly see what the effects are two and four years down the road, and see what’s working and what isn’t working so well. I really look forward to seeing that study. Q. What is the current state of play with the minimum wage issue and where do you think it’s headed? A. A group was convened with many different representatives – right now, they’re finishing up some
A. Being able to work with all these different restaurateurs and being able to see the passion they bring to their work. It’s really cool to see the pride the restaurateurs have in Seattle as well. They want to see Seattle thrive and be the best it can be, which is awesome. The restaurateurs are extremely proud to be part of the community, and are a huge source of employment and tax revenue dollars for the city and charitable giving. I’m from the Northwest, and I have a lot of pride in my community as well, so it’s cool to see that, and very satisfying. When they love what they do, and they want to see Seattle succeed, it makes my job much easier. The Seattle restaurant community is so unique, and it’s fun to be part of it. ■ October 2014 | 21
This is our Member Spotlight section. Are you a member with a story you want told or a celebration to be shared? Email us at stephanied@warestaurant.org.
Fuji Sushi: A taste of Japan in Seattle’s International District
MEMBER SPOTLIGHT
By Paul Schlienz, managing editor
Fuji Sushi is a small Japanese restaurant in Seattle’s International District. It has a beautiful sushi bar and seats about 80 customers. Recently, Washington Restaurant Magazine spoke with Tabitha Smith, Fuji Sushi’s owner, about her restaurant’s “oishi” (delicious) food, the International District and Seattle’s $15 minimum wage. Q. What makes Fuji Sushi special?
tastes and different ways to do things, and it’s kind of exciting to have that new taste you haven’t had before. Q. How did you get into this business? A. Kind of by accident. This restaurant was originally owned by a good family friend, and the family was looking to retire. We took a look, the circumstances worked out, we took it over and have been running it for about three years now.
WWW.FUJISUSHISEATTLE.COM A. It’s the people and the atmosphere. We really, Q. What’s it like running really love a lot of the customers we have come in here. a restaurant in Seattle’s International District? They’re amazing people, and we know them well. Same with the employees. We are like family. We’re not just working to A. This little corner of the International District is work. Japantown. It’s really great to have other Japanese restaurants nearby because we are very good friends with Q. Is your food based on any particular Japanese region? each other, we eat at each other’s restaurants and borrow rice when one of us is not able to keep up with demand A. We’re not specific to any one area. We do try to stay that night. It’s amazing to have that camaraderie with other traditional in what we do and have not really done the restaurants. Unfortunately, the International District still fusion thing. We’ve become a Japanese generalist. We do needs a lot of work. We have a lot of transients, but between more than just sushi here, and we do some things a little some organizations and a couple of businesses, they’re trying more Americanized, like bento box and chicken and salmon to get the area cleaned up, and it’s looking better. teriyaki. We don’t just stick to one area. We found a niche that works for us and for the people who love to come here Q. How is the $15 minimum wage going to affect Fuji Sushi? and eat. You can always come in and see us, and we’re happy A. My employees are not too excited about it. For us, as a to answer any questions. We love to walk new sushi eaters through the steps and the fishes, and explain everything to small business, it’s not going to help us any. It’s definitely them. It’s fun and educational. going to cause some issues to rise and, hopefully, we can get through that. We’ll have to work together to try and get Q. Why do you think Asian cuisine has gained such a through it and make it out on the other side. If things don’t foothold in the U.S. market? go that way, and we have to shut down, unfortunately, that’s one of the consequences of not researching and learning a A. Mostly because it’s something different. Once you get little bit more about what the city should actually make the older and explore other avenues, you just find out different minimum wage. That’s the thing that bothers me the most that there wasn’t any real economic impact study. ■
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HEALTH CARE: Are you ready for open enrollment? By David Faro, contributing editor
There is no question that Washington’s restaurateurs have been hit with some pretty big changes in the last two years. Seattle’s new minimum wage policy is a significant stressor for most businesses in Washington’s largest city. It is also a harbinger for similar implementation in other cities across the state. When you combine that with the huge changes in health-care legislation resulting from the Affordable Care Act, you end up with significant economic challenges stacked up against the business models of almost every hospitality establishment in the state. As legislators debate policy, individuals are left to figure out how to navigate the changes successfully, and often all on their own. The question for many is: With such large problems looming, how do they translate these macro issues into workable solutions for their immediate future? When it comes to mapping out a plan for health-care and understanding your obligations under the new laws, the WRA advocates a close look at H.I.H.I.T. The Hospitality Industry Health Insurance Trust (H.I.H.I.T.), specializing in providing health insurance to restaurant and hotel employers, recently announced its new and improved plans. These new plans include an extended PPO network and employer flexibility for contribution and participation. With health-care reform affecting so many hotels and restaurants, these new plans with industry-specific flexibility will be essential for hospitality workers and employers to get through the health-care reform changes unscathed.
The performance-based health plan (PPO) is from a H.I.H.I.T. partner, Group Health. This brand new plan aims to drive employee engagement in healthy behavior and better health care choices by offering preferred pricing for higher performing providers. Because H.I.H.I.T. solely serves the hospitality industry, all its resources and knowledge are abundant and thorough. It understands that health insurance for this industry is unlike any other, and H.I.H.I.T. strives to be the go-to source for health-carerelated topics and health-care reform. Plus, each client’s plan is reviewed in detail to ensure it’s the best fit for their unique situation. H.I.H.I.T. decided to employ these new plans with the mission to help companies in the restaurant and lodging industry to save time and be compliant, while providing the absolute best health insurance to employees. About H.I.H.I.T. H.I.H.I.T. is brokered through CLG Employer Resources LLC, but will also work directly with the client or their broker. This trust is designed for members of both the Washington Restaurant Association and Washington Lodging Association. Members receive access to medical and dental benefits with special provisions that are not available in the general marketplace. Uniquely designed to bring together employer groups of three or more, H.I.H.I.T.’s plans allow these groups to pool their resources so they can enjoy the purchasing power of a large employer group. To learn more about H.I.H.I.T. please visit www.hihit.com Please contact Amber Hahn at amberh@hihit.com or at (877) 892-9203 for media requests and inquiries. ■
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900,000 voices. Will they make you or break you? By Lyle Hildahl, WRA Education Foundation director
Last month I wrote an article on teen employment. I took the perspective that teens can be good hires. A lot of feedback lately has been around the $15 minimum wage and the negative impact it will have on teen employment. Bottom line, in my opinion, without a training wage, teen employment and high school career track training programs, like ProStart, will take a hit similar to a major earthquake or flood. It will be devastating. So what do we do? We band together and get our state legislators to support a training wage. Our industry today is faced with many challenges. How do we deal with public concerns around childhood obesity, or food allergies, or using local products or learning how to make our operations more “green” and sustainable? The list goes on and represents many new trends operators need to address. Many of these trends are the result of new generations impacting what people buy, how much they spend and where they spend their money. Millennial consumers are less loyal to traditional brands, but are tuned-in to product trends and drawn to natural, organic and clean ingredients, according to Guiding Stars Licensing strategy consultant John Eldridge, who believes the Millennial generation will continue to surprise the industry. Eldridge thinks this generation’s surprises for our industry are related to its outlook, attitudes, values and its rapidly evolving use of information technology. What if we approached these challenges as opportunities? Teenagers grow up having to listen to their parents, educators and employers day in and day out. What if we started listening to them? What if we included teens in our strategic planning process as we respond to these industry trends? In many ways, these trends are established because the teens of today have influenced them. The ProStart program currently reaches more than 90,000 students in the U.S. These kids are going to drive the future of restaurants. Why not get engaged with these young people while they learn about and influence the decisions we make moving forward. Let’s say each have 10 friends on Facebook.
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All of a sudden we have 900,000 voices to drive and influence change. These kids are studying culinary innovations and techniques. They are studying nutrition and visiting farmers markets and going out into the farms themselves. They are designing food trucks and espresso stands, and using social media to get the word out about what to eat and where to eat. They are our voice. They are our future. Let’s take one example of a trend—nutrition and childhood obesity. Lakes High School ProStart, in Lakewood, embarked on a project to improve children’s menus in restaurants. They developed recipes in their classroom kitchen. They used an NRA program called Kids LiveWell to establish the nutritional guidelines for the recipes. A community event was planned for grade school kids and their parents to taste and choose the winning recipes. The menu items were produced in Sodexo’s kitchens. The winning menu items then became the children’s menus in four participating Pierce County restaurants for a month. The response from the community was so good that some of those menu items remain on their children’s menus today. The school district, the campus food service provider, local restaurants and the local community partnered to make a difference in children’s health. Just imagine how this kind of collaboration would look in the minds of our government officials. Imagine the impact we could have nationally if school districts across the nation partnered with restaurants on similar projects. Healthy food options, sustainability, food allergies and social media are trends that are here to stay, so make a point to get involved with ProStart. You’ll be ahead of the game. Let those 900,000-plus voices help in growing our businesses by proactively meeting the public’s expectations. I don’t know why a restaurateur wouldn’t want to get involved in the ProStart movement! These kids and teachers are opening their doors to your expertise. Work together with these kids on shaping our future. You won’t regret it. You can find out more about ProStart by contacting Jennifer Dixon at (877) 695-9733. ■
DESCRIPTION: Ad – 2.25” X 4.75” VERSION: Concept 1 Ad DATE: 2/1/13
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INDUSTRY CALENDAR October/November 2014 Training Oct. 23
ServSafe® Manager, Olympia
Nov. 4
ServSafe® Manager, Seattle
Nov. 11
ServSafe® Manager, Kent
Nov. 17
ServSafe® Manager, Kent
Meetings Oct. 14
GAC Regional Meeting Spokane Chapter
Oct. 16
GAC Regional Meeting, East King Co.
Oct. 21
Finance Committee Meeting
Oct. 28
WRA Fall Board of Director’s Meeting
Oct. 29
WRAEF Fall Board of Director’s Meeting
Nov. 4
Executive Committee Meeting
Nov. 5
Retro Board of Trustees Meeting
Nov. 5
Retro Investment Meeting
Nov. 5
Seattle Restaurant Alliance Social
Nov. 12
MSC Subcommittee Meeting
Dec. 2
Government Affairs Committee Meeting
Events Jan. 26
Hill Climb & Taste Our Best Reception
NEW ALLIED MEMBERS Bizlyzer LLC Nishant Padhye 15704 124th Ave NE Woodinville, WA 98072-7903 210.710.1403 nishantp@bizlyzer.com www.bizlyzer.com Bizlyzer helps optimize your business by helping you increase the lifetime value of the customer while growing the revenues and improving over-all customer experience. Bizlyzer solutions include mobile survey, mobile loyalty and e-coupons, along with 20% discount on the list price for the Silver and Gold membership levels, etc. Bizlyzer is a web-based offering with a freemium model. Returning Point LLC Andre Cunningham 1567 Highland Dr NE #110-277 Issaquah, WA 98029-6245 425.766.4286 andre@returningpoint.com www.returningpoint.com Customer Loyalty rewards with kiosk. SMS and text messaging services. Splango Media LLC Mate Hollos 1001 4th Avenue Seattle, WA 98154 360.556.4330 mate@splango.com www.splango.com Splango takes the power of email marketing, referral marketing, social media, and customer loyalty and combines them into a seamless system that requires little effort beyond a phone call.
NEW RESTAURANTS Ale House Pub & Eatery, Tacoma Avenue Catering Enterprises, Burlington Ba Bar, Seattle Billy’s Café, Burlington Bizou Bistro, Shelton Capitol Cider, Seattle Chick-fil-A, Inc., Atlanta Coffee Bean & Teal Leaf, Seatac Corner Pub, Bow Da Tiki Hut, Tacoma Dickey’s BBQ Pit, Kent Dickey’s BBQ Pit, Tacoma Doc’s on the Green Pizzeria, Granger Duvall Grill & Tap Room, Duvall Egg & Us, The, Issaquah El Jinete Mexican Restaurant, Anacortes Farrelli’s Wood Fire Pizza, Puyallup Gelatiamo, Seattle Johnny’s Seafood & Bistro, Tacoma La Pisa Café, Seatac Luc, Seattle Market Street, The, Kirkland Mioposto, Seattle Monsoon East, Bellevue Monsoon, Seattle Pizza Factory, Kingston San Carlos, Bainbridge Island Sports Center, Yakima Sports Page Bar & Grill, Kennewick Toppins Frozen Yogurt, Oak Harbor Waji’s, Seatac Willows Prepatory School, Redmond Zorba’s Restaurant, Oak Harbor
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Marketplace EMPLOYEE BACKGROUND CHECK
WHY DO CUSTOMERS NOT RETURN?
A reported $4 billion is lost annually to embezzlement and a violent employee incident costs employers, on average, an incredible $250,000. According to Airfactz Screening & Reporting Services, a WRA endorsed employee background screening partner, one-third of job applicants lie on their applications and another five percent falsify their social security number. In today’s economically challenging times, employers are more likely to see a rise in embezzlement and other potentially harmful behaviors. Protect yourself with an employee background screening for a mere $19 investment for peace of mind with Airfactz. Visit warestaurant.org for more information.
Customers go to a restaurant for food, but they will return if offered great service. On an average year a restaurant will experience a 10-30% loss in customer retention. 80% of those customers leave a restaurant never to return based on a single occurrence of poor customer service. Our mystery shopping services allow you to train your staff to provide “consistency of service.” We can provide you and your staff a customized program that will help you to succeed to the next level. We are an Accredited Member of the BBB and WRA. 509-327-7373 * info@selectinfoservices.com www.selectinfoservices.com LED LIGHTING DISCOUNTS
MEDICAL AND DENTAL COVERAGE The Washington Restaurant Association designed a health care plan just for WRA members. The Hospitality Industry Health Insurance Trust (H.I.H.I.T.) enables business owners in the hospitality industry to provide affordable healthcare benefits statewide. Contact Amber Hahn at 877.892.9203 for a FREE quote.
Through a partnership with North American LED and the National Restaurant Association, WRA members receive special pricing on LED lighting. Legislation passed in 2007 phases in new energy efficient standards for lighting and phases out the traditional light bulb. To access discounts, visit: www.northamericanled.com/restaurants | User name: NRA175 | Password: NRA175
WRA has its
The OWN
RADIO SHOW!
The Washington Restaurant Association has an exciting way for members to reach potential customers! Join us on our radio show, DineNW, where we talk about Washington’s restaurant industry, and give listeners a taste of Northwest cuisine.
Listen from noon until 1:00 p.m. every Wednesday on KLAY Radio, 1180 A.M. www.klay1180.com www.facebook.com/dinenorthwest
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8/26/2014 6:32:53 PM
Ask the Expert | Restaurant Profit Coach
Drive profitability through better beverage management By Rick Braa, CHAE
Q:
I’ve recently decided to focus on my beverage program. Where should I focus to run better beverage numbers?
A:
Beverages are a significant part of your income statement and your balance sheet. Most full service restaurants sell 20 percent or more of total sales in beverages. A great ratio to drive to is 30 percent or better in beverage sales as these sales are incremental in restaurants and build sales through increased check average. Beverage costs tend to be lower than food costs so you make more on every dollar sold. Additionally, to assemble and serve a drink requires less effort compared to preparing and serving food. If you want to create better results in beverage management, focus on these areas: Audit pricing in the Point of Sale System (POS). It seems obvious to double check the pricing from the menu to the POS. It’s surprising how often there are one or more incorrect prices in the POS compared to the menu. Nearly every restaurant has this problem if prices haven’t been audited in the past 24 months. This is especially true in cocktails and wine. When auditing prices use this opportunity to look for duplicates, misspelled items and inactivate old items no longer used. Check with your gut as to why one drink would be priced higher or lower than another, and check with the market to make sure your prices are competitive. Engineer your beverage menu. Price every liquor, drink, beer and wine. Line costs up against sales volumes and compute the ideal cost. If the gap between ideal cost and actual cost is significant, make sure the loop is tight and secure when protecting your product in ordering, receiving, storage and service. Look for items that are out of line for cost percentages and, more importantly, find those that don’t contribute to profitability. Take a meaningful price increase on these items to get them to an acceptable margin. Isolate the highest volume selling items. These items are the least sensitive to price adjustments. Increase pricing or reduce costs on these items to create a dramatic impact. Manage inventory actively. Too much inventory leads to sloppy portioning, theft and unintended use of capital. Every bottle sitting in storage is cash not in the bank. Keep
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the inventory in total at 35 days of cost of sales or less, and count it often. Use the same two people to count inventory together each period. Use one to count and the other to record. Keep inventory locked up, and cover open bottles at the end of the night. Place cameras in the inventory area, and make them conspicuous. The idea is to deter not catch theft. With high speed Internet and the invention of Web cameras, it’s more affordable than ever to install additional security deterrents. Test portioning daily. Trust character, but verify results. Begin every shift with bartenders with a pour test. Take the time to explain how easy it is to over portion, and its effect on cost. If an average restaurant sells $200,000 in beverages per million in sales, and the average cost of a drink is $10, there are 20,000 drinks sold. If each drink was off even 0.5 ounces (one tablespoon), there would be 10,000 ounces or 78 gallons or 390 bottles (750ml) in over portioning. If the average bottle costs $15, the total over portioning in dollars would nearly $6,000. Often, portioning variances are higher than this. Institute bartender blind drops. Never let bartenders balance to sales. At the end of the shift, simply have bartenders calculate their drop, separate the bar bank dollars, organize any paperwork and drop in the safe. Have a manager match the drop to sales and compute the over/short for the bartender. It’s easy to “forget” to ring up a drink during a busy shift. If the bartender has the ability to balance to sales, those items that are not rung up are kept as tips. This is an easy way for theft to happen unintentionally or not. Blind drops often save three or more points in beverage cost immediately. Beverage management is a wonderful, easy way to invigorate the guest and employee experience. Manage the beverage category with the same vigor as food, and you’ll see results that improve the business and the bottom line. ■ For a more information on improving profitability and driving performance, contact AMP Services at rbraa@ampservices.com. Rick Braa is the co-founder of AMP Services, an accounting and consulting firm specializing in helping companies grow profitability.
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