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Friday, 06 February 2015 10:37

Inhospitable Mandate

By | News
Inhospitable Mandate

State Wage Board’s Proposed Increase Raises Concerns Locally

By Arthur Gonick

Saratoga TODAY

SARATOGA SPRINGS – On Friday, Jan. 30, the New York State Wage Board, after several months of hearings, recommended that tipped workers’ minimum wage be raised from $5 to $7.50 per hour. This recommendation would affect all wait staff and bartenders at restaurants and other hospitality venues. The increase, if accepted by the Commissioner of Labor, would take effect on Dec. 31, 2015. The recommendation had the support of Governor Andrew Cuomo, who said in a statement: “For far too long, wages for tipped workers in New York State have been too low.”

 

However, in Saratoga Springs, which has a large number of restaurants and bars per capita in comparison to other cities, it was no surprise that local restaurateurs expressed several areas of apprehension about the implications, for both patrons and workers, if the recommendation is adopted. 

 

“We’re very concerned,” stated Nancy Bambara, Vice President of DZ Restaurants, which has four establishments in Saratoga County. “I’d personally like to see where they (Wage Board) got their research.”

 

Bambara noted, “Most of our servers make a good living already. For us, a new requirement like this, on top of mandates like health care, makes it harder and harder to do business.” 

 

“People don’t realize that in order for us to be competitive, we need to be make sure we are pricing our menu properly. All our restaurants’ (Chianti Ristorante, Forno Bistro and Boca Bistro in Saratoga Springs; Pasta Pane in Clifton Park) margins are exceedingly small.” She added. 

 

Should the wage board recommendation be accepted, Bambara believes that it won’t be long until consumers feel an impact. 

 

“We’ll do what we can – aggressive marketing, for instance, to try and keep the customer’s coming in. But it’s hard to believe that, with this percentage increase, we can hold the line on prices forever.” 

 

Regarding worker staffing and hours being impacted as well, Bambara didn’t rule that out, and added. “We would have to look at everything, including the employees. We take pride in having things like staff awards and other creative incentives; we may not be able to retain these.”

 

Bambara also took the Wage Board to task for favoring a blanket increase to everyone statewide outside of New York City: “Our situation here has to be considered. We are in a resort area, but we operate year-round, not just at peak times, and try to keep as many on staff as we can.” 

 

Robert Lee is the long-time owner of The Wishing Well Restaurant and recently opened The Brook Tavern. Regarding the potential wage increase, he stated succinctly: 

“Ultimately, any new cost is passed on to the consumer.” 

 

And while Lee did not specifically speak to the potential impact on employee’s jobs and/or their hours, he did state, “Restaurants are not any different from other businesses that are always looking to increase their efficiency while continuing to deliver a great product.” 

     

While other restaurant owners declined formal comment, they were universal in expressing frustration, and in some cases, anger that the state was adding another burden to them. 

 

One who had no reluctance to speak out was John Baker, owner of Gaffney’s Restaurant since 1982. “Let’s say I’m not too happy.” Baker said.

 

“Most of our tipped workers are making a very good living, so I don’t think in our case this kind of percentage is justified. In my experience, most of our employees who take tipped jobs do so because of the income they can derive.” He said.

 

Also, he was concerned that raising the pay rate for one subset of employees was unfair. “What about dishwashers and line cooks? Don’t they deserve an increase?” 

 

Other restaurant owners also stated that the impact on non-tipped employees was barely taken into consideration by the Wage Board, even though these workers might bear the brunt of the impact should the increase go through.

 

While Baker said he would do all he could to keep employees and hours at current levels if the increase is adopted, he did state that, “all pricing will need to be examined.” 

 

He offered an international perspective, and felt it wasn’t one that people here would favor, “In other countries, Australia for instance, tipping is a non-factor. In that case, you have wait staff that makes $20-25 per hour, which impacts all your costs. Eventually the customer pays – in some cases twice what we pay here for the same menu item. I don’t think people here want to go that way.” Baker concluded.

 

Tim Holmes, Co-owner of BWP and The Wheatfields Restaurants in Saratoga Springs and Clifton Park, as well as the current President of the Saratoga Springs Downtown Business Association, recommended the comments of The New York Restaurant Association. Their comments mirror the concerns expressed by local restaurant owners. 

 

In a release, Melissa A. Fleischut, CEO and President of the Association, stated: “Increasing the cash wage will hit small businesses hardest, and hurt the backbone of the restaurant industry, back of the house workers. There’s only so much money a restaurant can spend on labor, increasing the wages, the people who earn the most in a restaurant, leaves the owner with fewer resources for back of the house staff.”

 

After the Wage Board recommendation, in a call for the state Labor Commissioner to reject the Board’s recommendation, Fleischut added:  “This decision will handcuff small businesses’ ability to create jobs, decrease the pay of non-tipped employees, and reduce hours for tipped employees. Nobody won today.”

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