December 3, 2013
Restaurant workers haul ass to provide us seasonal, delicious, safely-prepared food. And yet their meager wages—the typical restaurant worker makes $15,000 a year—are barely enough to pay their rent and groceries, let alone health insurance premiums. (This is especially true in the case of bussers and dishwashers, some of the least glamorous and lowest paying jobs in the restaurant industry.)
As members of the food movement, we seek out restaurants that serve fresh, local, organic ingredients, yet most of us don’t even know whether the workers who prepare and serve our food (and wash our dishes) get health insurance or paid sick leave.
That’s not the case at Biwa, a homestyle Japanese restaurant in Portland, Oregon. A few months ago, owner Gabe Rosen and his wife and business partner Kina Voelz took a gamble and began adding a five percent “Health & Wellness” charge to customers’ bills to pay for their employees’ health insurance. Whatever is left over goes into a fund for quarterly bonuses for Biwa’s cooks and dishwashers.
The charge is very transparent—an explanation appears on the menu and again on your bill—and so far diners have been incredibly enthusiastic about paying it. “People like it,” says general manager Ed Ross in this short video, noting that every night diners send back their bill with “awesome” and “this is great!” scribbled in the margins. “I think that people understand that it’s an issue,” says Ross.
Biwa covers every employee at the restaurant—from waiters to dishwashers—as long as they work 16.5 hours a week. The company pays 100 percent of the premium for the high-deductible plan. (If workers want a more comprehensive, lower deductible plan, they can get it, but have to chip in for the higher monthly premium.)
Rosen and Voelz have actually been paying their workers’ health insurance for a few years and they’ve offered one week of paid vacation per year to cooks and dishwashers since they opened in 2007. But the couple realized this summer—as premiums continued to soar—that they wouldn’t be able to do so for much longer unless they came up with a creative solution, fast.
They considered raising prices across the board. “But then we realized we could raise prices as a single line item and take this kind of boring business issue—that’s actually very important—and make the guests part of it,” says Rosen. The staff was initially concerned that the surcharge would mean stingier tips, but after a moment of head-scratching, according to Rosen, they bought into the idea. Rosen says that other than a handful of negative comments in online forums, customer feedback has been amazingly positive. “Tips have actually gone up!” he says.
At another Portland restaurant, a regional Mexican spot called Xico, the margaritas pay for health care. Or at least that’s what it says on the menu. Under the “Classic” Xico Margarita ($9)—made with Lunazul tequila, fresh lime juice, and triple sec—it reads: “Xico margaritas pay for full health care for our staff.”
But that’s not entirely accurate. Owner Liz Davis says she put this on the menu because the gross sales of margaritas matched what the company was already spending on health insurance. “We wanted to make it known that we were fully covering our employees,” says Davis.
Though employees have to work three months before they can get on Xico’s group plan, the company covers the entire monthly premium of $240 per month, no matter how few hours the employee works. It’s a fairly comprehensive
plan from HMO Kaiser Permanente with $25 co-pays and low-cost prescriptions (generic drugs cost just $10). As with Biwa diners, Xico regulars seem more than happy to pitch in. “People get really excited about it and order more margaritas,” Davis says, laughing.
The average progressive Portlander may be happy to pay a little extra (or double down on their margaritas) to ensure restaurant workers get adequate medical care. But Saru Jayaraman, author of the exposé, “Behind the Kitchen Door,” doesn’t think consumers should be responsible for kitchen workers’ health insurance.
“Don’t get me wrong, I definitely applaud trying to provide health care and benefits,” says Jayaraman, who is the co-founder and director of the Restaurant Opportunities Centers United (ROC), an organization committed to improving the wages and working conditions of the nation’s 10 million restaurant workers. “But this is an industry-wide problem. Restaurants need to be providing benefits—it’s not the responsibility of the customer to do that.”
Then there’s the issue of trust. When the Healthy San Francisco law passed in 2008, requiring businesses there with 20 employees or more to offer health insurance, many restaurants added a surcharge to customers’ bills. Reactions were all over the map from supportive–“Too many of my friends and family are without health care”–to outrage that diners were being taxed, with San Francisco Chronicle restaurant critic Michael Bauer writing: “Incorporate all these expenses into menu prices.”
(A legal challenge against the program, which was filed by the Golden Gate Restaurant Association in 2006, was denied a hearing by the U.S. Supreme Court on June 29, 2010, legally clearing the program for continued existence for the foreseeable future.)
Then there’s the issue of oversight: In May, 19 restaurants were accused of not using that extra money exclusively for workers’ health insurance.
Jayaraman says plenty of restaurants manage to provide health insurance to their workers without passing the cost on to diners. “They’ve worked it into the efficiencies of the restaurant,” she says. “They say it actually reduces costs because it reduces turnover and increases productivity.”
Among the examples she gives are Zingerman’s Deli in Ann Arbor, Michigan, which offers subsidized health insurance for employees who work 30 hours a week (as long as they’ve been on staff for three months), “thrive-able” wages, paid time off, and matched 401(k) contributions.
Russell Street Deli in Detroit’s Eastern Market is another model employer. The deli offers living wages, health insurance, and an IRA program. ROC’s 2012 report Taking the High Road: a How-to Guide for Successful Restaurant Employers singles out a few other businesses that provide some form of health insurance for workers: Tom Colicchio’s Craft restaurant group in New York, Busboys & Poets in D.C., and Avalon International Breads in Detroit. “But many, many others provide health insurance; many provide full coverage, but the quality of the insurance varies,” notes Jayaraman.
Locavore fast food chain Burgerville—which has 39 restaurants in Washington and Oregon—has been offering workers comprehensive, affordable health care since 2006. To be eligible, employees must work 25 hours a week but once they do they only pay $30 a month. Health insurance kicks in after six months of employment.
“Chief cultural officer” Jack Graves attributes the low staff turnover at Burgerville—50 percent versus an industry average of over 100 percent—to this important benefit. “Offering health insurance got a lot of people insurance who had never had it before in their lives. It made people proud of where they’re working, proud that they can take care of their families in a manner that’s respectful,” he says.
Xico owner Liz Davis built the cost of health insurance into her business plan from the beginning, too, but she says the rising cost of health insurance—and the fact that she covers the full premium for even part-time employees after only three months on staff—means she may have to do something enterprising, like Biwa, to keep offering this benefit.
Lucky for her, Portland eaters are no longer satisfied with merely knowing the provenance of the chicken on the menu and whether it was humanely treated. They also want assurance that the restaurants they eat at treat their employees ethically—even if that means ordering another margarita.
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