Restaurants versus unions and the city of Minneapolis

Restaurants first came under the microscope about a decade ago, during the #MeToo period. They were identified, fairly or not, as an industry where hot-headed chefs degraded and exploited workers. Dramatic increases in wages and the defrocking of abusive leaders like Mario Batali changed that dynamic. 

But then the pandemic knocked the wind out of the industry. Some owners got government bailouts, most didn’t. Repeated closures forced many of the best workers into new careers. Labor shortages pushed the wage base well over $20 an hour in kitchens and back-of-house. Then inflation drove menu prices up, meaning tip-based employees frequently earn 50%–100% more than that. 

Now the industry finds itself under siege again—this time from unions working to organize restaurants and compel the city to regulate them via a labor standards board (LSB), expected to be formed by the city council this year. The prime mover behind the LSB is the Service Employees International Union (SEIU), which doesn’t organize restaurants, which nonetheless say the union movement is gunning for it.

I’ve tried over the past six months, in conversations across industry, government, and organized labor, to understand what’s going on. All of what follows comes from people at the center of these universes. (Restaurateurs are suddenly afraid to speak on the record, fearing it will make them the next organizing target.) 

Unions represent a small minority of American workers. Their offerings have typically held little allure in restaurants, which have high turnover and mostly short-term part-time workers interested in maximizing tips and minimizing hours. Restaurant work has been an invaluable haven for people earning money to fund a transition to an adult career, but the industry supports career-track jobs as well in management or tipped roles at high-end restaurants. 

The hospitality union, UNITE HERE, has seen hotels, its core industry niche, hobbled by the pandemic. Unions thrive on scale, and HERE is believed to be looking to organize independent restaurants to restore lost dues-paying hotel members. 

HERE has set its sights on creating more full-time restaurant jobs by attacking the long-held practice of flexible scheduling. Efforts to unionize Ann Kim’s namesake restaurant in Uptown (successful) and Daniel Del Prado’s Café Ceres (successful) and Colita (unsuccessful), all in Minneapolis, have laid down markers. In response, owners are lawyering up, spending $1000/hour on specialists who promise to keep Local 17 at bay. (Insiders believe Kim was targeted for speaking out forcefully against the LSB.)

Why do restaurants rely on flexible hours? So they can stay open longer and during slow periods. More hours means more revenue but also more jobs. (In the U.S. it’s common to find restaurants that operate 12–21 meal periods per week, including the dead space in between. In other countries, seven to nine meal periods is common.) 

Flexible scheduling staffs to immediate demand. Restaurant patronage is volatile, affected by weather and factors like events in the area, road construction, and whether the Vikings game ran past the dinner hour. The industry attracts a front-of-house workforce that values the ability to work as much or as little as they choose and to take lots of time off to pursue passion projects or education. 

Ask a tipped restaurant employee if they would rather stick out a slow shift at minimum wage or get cut? The uniform answer is “get cut.” This reality makes union heads explode, but I’ve been asking this question of restaurant workers all year. The frustrated workers that Local 17 channels in its PR and friendly media coverage are outliers, people who have chosen the wrong kind of job for their needs. 

Restaurant owners believe Local 17 is using operatives to take jobs in targeted businesses, who identify and encourage disgruntled employees, inviting them out for a beer, where organizers are waiting with a sales pitch: stable, predictable hours; full-time, career-building work; and a say in how the restaurant is run. 

Fixed-schedule, full-time jobs alter the industry’s business model, raise hourly labor costs (which have nearly doubled in a decade), and lead to a decline in employment. Ask a city restaurateur if they are running with the same head count as a decade ago. Most can’t justify it due to declining profits. 

This year, Blue Plate closed its family of seven restaurants from July 1–7, the slowest week of the year. It was a question of losing money while closed or losing more while open. Its hourly workers had no income for a week. In previous years, when the economics were better, Blue Plate closed only on July 4. 

Kim’s was losing money before it unionized and just announced it is going out of business at the end of August. Did Local 17 believe more rigidity and overhead would fix the problems of an exceptional restaurant trying to make it in a deserted commercial neighborhood? 

Worker demands seem less about traditional themes like wages and benefits than guarantees and control. They don’t like the inconsistency of income that rises and falls on the variables of business. They also increasingly want a role in managing the business. That means input on decisions like where Cerés sources milk (a coffee shop’s largest or second-largest raw material expense) and whether pro-Palestine pins can be worn at work. Café Cerés’ front-of-house workforce, the only cohort being organized, earns between $23–$30 per hour with tips. Cerés pays 80% of health insurance premiums (with a deductible). 

(It’s notable that Local 17 is organizing better paying urban restaurants with large numbers of white, college-educated workers, rather than poorer paying suburban restaurants.)

Restaurateurs are often cowboy entrepreneurs. They have a vision and want to execute it on their terms. Some are jerks who view every worker as a replaceable cog. They occasionally employ managers who demean and enforce rules selectively. Going forward, that’s gonna get you unionized. 

But many owners are great people who understand the integral value of their workforce. They don’t make much profit and are offended that a handful of sour 20-somethings want to remake their business model for little obvious gain.

There are union restaurants in the Twin Cities, mostly at hotels, but also places like Jax Café. Owner Bill Kozlak declined to talk with me, for fear of his statements being misinterpreted. One who would talk was hotelier and restaurant operator Ben Graves. 

Graves says the costs of doing business in his union restaurants are marginally more than in his nonunion operations. He has not been pushed into fixed scheduling but has rules about when employees can be cut during a shift. His biggest frustration is that seniority controls the workplace because unions try to eliminate prerogatives of subjectivity. Graves says it’s tough to reward high performers in a union environment, but suggests operators focus their energies on working with Local 17 rather than fighting it.

Unions serve a vital role in American life. But there’s a difference between protecting people’s dignity and attempting to impose a new model on a sector whose workers are already well-compensated as unskilled labor goes. And to be clear: there are restaurants in town that offer career-track jobs and fixed scheduling for those who want that. 

But not every job can or should be a career. Disaffected 20-somethings who’ll be in grad school next year do not have standing to tell the owner who the milk vendor or general manager should be. Or to believe they are entitled to a career-track job within walking distance of their home—all demands I’ve heard in the last few months. Workplace power and control come with experience and dedication. And the people who risk the most are reasonably entitled to make the decisions that affect a business’ viability.

The post Restaurants versus unions and the city of Minneapolis appeared first on MinnPost.