As quick-service workers across the country stage strikes to draw attention to their push for higher wages, multi-concept restaurateur Tom Douglas of Seattle is addressing the issue in his own way.
Earlier this month, Douglas — whose Seattle-based foodservice empire includes 15 businesses, from the celebrated Dahlia Lounge to the more casual pizzeria Serious Pie — raised the starting pay for back-of-the-house, non-tipped employees by $2 to $3 an hour. Dishwashers, for example, now start at $12 an hour, up from $10. The starting wage for cooks increased to $15 an hour from $12. This in a state that already has the highest minimum wage in the nation at $9.19 per hour with no tip credit for service staff.
Douglas didn’t increase wages because of the strikes, and he doesn’t want to see higher pay mandated by law. He said he did it because he feels it’s the right thing to do.
Douglas spoke with Nation’s Restaurant News on his views surrounding restaurant wages, benefits and what industry leaders should be doing.
Minimum wage has been in the news a lot lately. What have you done for your restaurants to address this issue?
It’s kind of irrelevant when it comes to front-of-the-house workers, so we’ve been working on back-of-the-house, non-traditionally pool-tipped employees. Typically in a restaurant, the back-of-the-house gets a small percentage of what the waiters make [in shared tips]. That adds up to maybe $50 a month.
I’ve always felt that back-of-the-house has been an underappreciated, undervalued position as far as wages go. That’s just the way it’s always been. I came up through that particular system. When cooks complained about it, I’ve said, ‘Go become a waiter.’ That was about the only answer I would have for them.
What changed your view?
Basically, I’ve just turned 55 and my business is turning 24. I’ve got my toys. I own my home and our farm where we grow a lot of the vegetables for the restaurants. I own my cars and I’m debt-free, essentially. I just decided that, before I open another group of restaurants — which I fully intend on doing — that it was time to look at my company and what I could give back. So I started with … trying to increase the living wage for a lot of the people that live on the edge.
I’ve been on the board of Food Lifeline, our food bank distribution system, for almost 30 years, and it makes me so sick to think that my cooks are one paycheck away from that very line I’ve worked so hard to shorten. It doesn’t need to be that way.
You’ve increased pay for non-tipped employees by how much?
I’ve increased the baseline. We already offer access to health care. So if you work a full-time week here, which we declare 25 hours, after six months, you get health care. We offer vacation, a week a year after one year and two weeks after two years. That’s waiters, cooks, dishwashers, anybody. We also offer a week a year of sick leave. And now we felt the last thing to get our piece of pie more where I think it should be was to change the baseline wage of kitchen workers.
So dishwashers went from a starting wage of $10 an hour to $12. Prep cooks went from $11 to $13. Cooks went from $12 to $15. Then, if you can make it through a year in our company, I think there should be a higher standard wage. This is the most exciting part for me, and it’s yet to be determined about how much it’s going to cost, but the merit window opens to $20 to $22 an hour, depending on the value that you’re bringing to your job.
You’ve estimated this shift will cost the company an additional $1.3 million.
Yes, and that’s just the first year. We have 350 or so coworkers that are affected by this wage increase. Altogether we have around 800 coworkers across about 15 restaurants and other businesses.
Can you give an indication of how much you pay in labor?
Our payroll is about $1.5 million a month. It’s about 46 percent of our revenue or so. It fluctuates.
Restaurant companies taking the lead
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How do you feel about ‘Obamacare?’
I love it. I’m a big fan of [President] Obama. I can’t understand one thing that’s wrong with trying to get 40 million more Americans health insurance. And for restaurants to come out and say they plan to cut their full-time staff to 29.5 hours so they don’t have to pay for health care, I would like their employees to think for a good long minute about who they want to be working for in this world.
Are you already offering health care to those who work less than 30 hours a week?
For the first 22 years of our business, we offered health care to those who worked at least 20 hours per week. But a year or two ago, we had to go to 25 hours because [the insurance company] kept threatening to take away the great plan that we had. That’s how much pressure these companies are putting on you to get down to the brass tacks.
[Offering health care] is the right thing to do. Restaurant owners say they want our business to be considered a profession, which you hear all the time as lip service, but then we turn around and don’t give benefits and pay them crap. That’s BS. And frankly, NRN, I’d like to call you to task because you guys run headline after headline saying the very same thing. You’d have never known there was an alternative opinion out there, and I honestly believe there is.
That’s why I’m here now. So, it sounds like you see this as an opportunity. Do you think you’ll attract better employees?
We’re likely to get some different applicants, but I don’t think that would last very long and nor is it the intention. I would like to see our industry jump in and take better care of the people who work for us. Again, I don’t want to see it mandated.
I have to say, if I were a brand-new restaurateur, I probably could not afford to do this. But I’m not. I’m 25 years in. I’m well known. I can make the statement that I’m making.
What companies do you feel are taking leadership on these issues?
In general, Starbucks has been a great example, especially the lower hours to make full time so you have access to health care.
I think Costco is doing a great job in the big picture of running a successful business and having employees stay long term. They treat it as a profession with upward mobility, access to health care and benefits to everybody.
There are a lot of good examples of very profitable American companies, huge pillars of our community, and, frankly I want to be one of them. I don’t want to be looked at like a Walmart, where they’re just trying to get every last cent out of every person, including their own staff. … I’m not a communist. I’m a capitalist. I love a good profit. I get angry if we don’t make money.
So restaurant operators who say they can’t afford to pay more, or they’d have to raise menu prices to do it, you’re saying that’s a myth?
Oh, raise menu prices! How long can this country afford a dollar menu at McDonald’s? We’ve had it for 20 years. It costs more to treat people right. If I have to have 10 restaurants instead of 15, so be it. If people have to stay home and eat because restaurant prices are higher, so be it.
At some point our people, our teammates, deserve an honest shot. They’re coming out of culinary school paying, what, $100,000, $150,000, and getting a $10-an-hour job? They’re never going to be able to pay that back.
In the food bank line in Seattle, 92 percent of people in line have at least one job in the household. These are the working poor. So we’re subsidizing them one way or the other. I’d rather pay them a respectful wage they can be proud of.
Contact Lisa Jennings at email@example.com.
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