Just as robots are putting millions of jobs at risk, San Francisco’s high housing costs and “pro-worker” bureaucrats seem to killing off waiters and waitresses jobs by the droves in the City by the Bay.
The so-called “worker-friendly” policies enacted in San Francisco over the last several years may be backfiring.
Instead of helping the workers city bureaucrats had intended to help, it seems that more and more San Francisco businesses are learning to function without those workers and, as importantly, doing well without them.
A lengthy New York Times article highlights an emerging trend in higher-end restaurants: That of a restaurant model without waiters and waitresses.
The small menu is so appealing and the place itself so charming that you almost forget, as a diner, that you have to do much of the work of dining out yourself. You scout your own table. You fetch and fill your own water glass. And if you’d like another glass of wine, you go back to the counter.
Runners will bring your order to the table, but there are no servers to wait on you here, or at the two other San Francisco locations that Souvla has added — or, increasingly, at other popular restaurants that have opened in the last two years: RT Rotisserie, which is roasting cauliflower a few blocks away; Barzotto, a bistro serving hand-rolled pasta in the Mission district; and Media Noche, a Cuban sandwich spot with eye-catching custom tilework. [Emphasis added.]
Economics—Pure and simple.
The reason why more traditionally-upscale restaurants are turning to this waitstaff-less model—which is what some refer to as ‘Fast-Casual Dining‘—seems to be purely economics.
On July 1, the minimum wage in San Francisco will hit $15 an hour, following incremental raises from $10.74 in 2014. The city also requires employers with at least 20 workers to pay health care costs beyond the mandates of the Affordable Care Act, in addition to paid sick leave and parental leave.
Despite those benefits, many workers say they can’t afford to live here, or to stay in the industry. And partly as a result of those benefits, restaurateurs say they can’t afford the workers who remain. A dishwasher can now make $18 or $19 an hour. And because of California labor laws, even tipped workers like servers earn at least the full minimum wage, unlike their peers in most other states.
Doing away with waitstaff has not hurt business.
In the case of Souvla, the featured restaurant in the Times’ story, the fast-casual model has been a boon for business.
The model and the small menu are conducive to takeout, which produces more than half of the revenue at this location. The restaurant has just 40 seats, but now averages more than 900 meals a day, far more than a full-service restaurant could manage in the same space.
For restaurateurs, counter service makes fine dining — or something like it — profitable. To economists, it makes sense.
Compared to the 43 percent labor costs a full-service French restaurant nearby is paying, Souvla’s is in the mid-20s, “even with paid vacation and retirement benefits.”
The people hurt…
While displacing workers due to innovation and automation is nothing new, this displacement of workers—waitstaff, in this case—seems different.
In cities, waiting tables is often a job that is occupied by college students college or individuals who want to pick up extra income.
As those jobs disappear due to the unintended consequences of “worker-friendly” policies, what jobs do those cash-strapped workers do to help fill their wallets?
“If customers won’t buy $20 burgers, or $25 dosas, and the staff in the kitchen can’t be cut, that something is service. ‘And that is what we did — we got rid of our servers,'” Anjan Mitra, who owns two high-end Indian restaurants (named Dosa) in San Francico, told the Times.
Of course, the unions behind the push to raise the minimum wage to $15 per hour across the country, as well as other “worker friendly” policies, are loathe to admit that their policies, instead of helping workers, may actually be hurting them.
Nevertheless, as more cities (like Los Angeles, New York, Seattle and elsewhere) pass mandates for higher labor costs onto employers, more cities will likely see the unintended consequences of waitstaff jobs disappearing.