That’s senior engineer salary in most of Western Europe, and the vast majority of the rest of the world has significantly lower salaries than Western Europe.
But in most Western Europe, you've got health coverage, unemployment and also retirement is included. Plus cheap and good public transit so you don't have to pay for a ca
Pretty sure in big tech hubs like London, Amsterdam, Dublin, senior engineers make at least this much. Probably more. I can only offer my experience from London, not sure about other places but for sure there you can make over 100k as senior engineer.
It's the same in places like NYC, Vegas, and some restaurants in Washington, DC. The patrons spend big on expensive wine and entrees, especially when the space is reserved for private events. It's also incredibly stressful, somewhat seasonal, and means working late hours in an industry that plays very hard.
It's more than I made when I moved to the bay area. I remember meeting wait staff that earned more than me with more flexible schedules.
That said it's easy to look over the skills of some of these folks. Being able to be gracious and provide a good customer experience for 8+hrs/day in a hectic environment requires skills that take effort to learn and maintain.
They're making the equivalent of $80k – not necessarily $80k.
"With the service charge, our servers were making $38 per hour (hourly base + hourly service charge) or the equivalent of $70,000 to $80,000 a year if you were working for us full-time."
In a service industry driven by on demand scheduling, a "standard 40 hour work week" is quaint nostalgia. Regardless of hourly compensation, total wages for semi-skilled proles are forever in the sweet spot of not-quite-enough-to-get-by.
I understand people aren’t doing regular 9-5s, but my point was if they are making $90k working 40 hours, that’s really good. If they’re making $90 working 65 hr per week, that’s not so impressive.
I'm a freelance fullstack dev (laravel + vue), probably intermediate-senior level. That's more than I've ever made. I live in utah and Rent is $1000 for a 4-5 bed house, and I under-price my services cause I suck at marketing. ($40-60/hour, when most freelancers get $100+).
I live in SF and am charging $15/hr for Clojure exclusively. No bites yet. My budget is $1,500/mo total, $600 being food. Awe yea. I charge what the market will bear, starting at minimum wage. China is about $45 fyi, last I paid—good talking point.
If you're trying to do only clojure and nobody is biting, you might want to pivot to a less obscure framework/platform...
I picked vue because I prefer it's templates to jsx, and I like vuex and it's sort of well documented for use with laravel. But if I hadn't picked vue, I'd have gone with react because of market domination.
I'm currently even thinking of pivoting from laravel to node based backends because it seems js devs make all the $$... and I'm not so locked into laravel that I can't move or jump to other frameworks.
The more you know the more you can charge...I have many friends who target a specific vertical like Fintech that charge between $100-200/hour for js/node development as freelancers. Working on teams I've made around $35/hr, solo depending on the client I've pitched 40-60... I work w/ a lot of small businesses who that's on the high end for them --they're used to wordpress devs at $25 or less per hour on upwork.
Clojure being a bit obscure though, I think freelance would be harder to secure, but a full-time gig at a shop/agency or startup who's apps are built on that framework would be easier, as long as you have a good portfolio and very active github showing activity w/ that.
Underpricing your work sends a strong signal about quality, or the lack thereof. I opened with charging well above my peers (we're talking 150%+ of their rates) when I started practicing law, and not a single client balked.
In comparison with my more experienced co-workers that were offering cut-rate deals, I garnered more respect and support, had higher client satisfaction, and almost every client I had decided to stay in my book of business during transitions.
Charge a lot. Be good enough to deserve it. Use that impostor syndrome to up your game.
Hey thanks for the advice. I'm trying to be 'good enough', pivoting a little to focus more on JavaScript back and front ends, always learning and what not. I think if I take a chance and land a few North of $80/hr clients I'll get the confidence. I'm just not sure where those type of clients exist...
Part of my issues also were ADHD made it really hard to stay on task and focus but now I'm on meds for that and I'm super focused when I'm in my office, I'm also really neat and orderly around the house lol.
Why? It's a skilled profession and there's demand for it. Given how many 'engineers' are working on yet another Facebook/WhatsApp/Twitter/whatever clone that people really don't care about, why shouldn't professionals who provide a service that people enjoy make the same money as people building a shitty app?
Basically barrier to entry. It takes a lot less time to turn a friendly adult into a good enough waiter than it takes to turn a nerdy adult into a good enough developer.
We all know wages aren't dependant on education, otherwise teachers and scientists would be rich. But they're not. Also, most of the waiters I know have at least one university degree. Many have multiple, or a graduate degree.
Not to mention, good waiters know about food, wine, spirits and have the soft skills required to put up with people who frequent restaurants.
Anyhow, barrier to entry is a bad excuse. Education does not equal a good living.
I deliberately avoided using the word good because otherwise we go down a rabbit hole talking about what makes a good engineer versus a good waiter.
> Education does not equal a good living
No but it is heavily correlated with one.
There are plenty of restaurants that will hire an 18 year old with no experience and literally no qualifications to be a waiter. Lots of places when they are looking for experienced staff just hire anyone who had any waiting experience. They aren't nearly as picky as development managers.
I don't know of any software companies that will just hire an 18 year old to write their code without any training or experience. Without a 4 year degree I've seen it take people usually a year or longer of spending all of their free time coding to get their first coding job.
But if you think it's as easy to get your first waiting job as software engineering job(which is very different from my friends experience who has done both), what do you think is the cause of the wage discrepancy?
> There are plenty of restaurants that will hire an 18 year old with no experience and literally no qualifications to be a waiter.
And they'll likely be working in a chain restaurant barely making more than minimum wage, not breaking $20K per year.
> Lots of places when they are looking for experienced staff just hire anyone who had any waiting experience.
And again, waiters in such a situation will likely not be making much money.
To actually make $60K or more as a waiter, you need to have selling ability, wine knowledge and the skills to get into a better restaurant. You likely won't see anywhere close to this until you have 5 or more years of good experience (not unlike getting a traditional education).
If you're working at Chili's (or equivalent), lets say the average person spends $30. You serve 30 people in a night, that's $900 in sales (18% is $160). Now let's say you work in a high end steakhouse, steaks can run $50 each, appetizers $25 each, and then there's wine. Bottles can run anywhere from $50 to thousands. But let's say you sell a $120 bottle, which is a pretty common price-point in those types of restaurants. For a table of 2, 2 appetizers, 2 steaks and that bottle of wine adds up to $135/per person. Times 30 people per night, around $4K in sales, with tips being $780 (although, in reality, some of that goes to your support staff - bussers, host, sommelier).
Anyhow no, a coder won't get a great job right away. And a server won't get a lucrative job right away. You still need to build up to that point in the restaurant industry. You can't just do what cooks and waiters do at places like Eleven Madison Park, Benu, Saison, etc... without lots of training and experience.
So why shouldn't it be a possibility for a restaurant worker to make a 'professional' income?
Tawla is not a cheap restaurant. Dinner was $40/person + tax & tip, wine and dessert were extra. The food was good, don't get me wrong, but it's a fancy place.
"That also allowed us to give our employees private healthcare instead of relying on the broken Healthy SF system which has proven to be very hard to navigate"
Excellent article. Key take-away: "There is no amount of money an owner could pay an employee within the economics of a small business to allow their employee to live within the borders of the city or even within a reasonable radius that doesn’t have them traveling for two-plus hours a day to come to work. This is the reality of where we live."
I don't see how or why the employer should care how long their employees commute is it is incumbent on the employee to make the decision if the commute is worth it. Maybe people would prefer a 2 hour commute to a place where they can make $80k/year, over working 10 minutes from home and only being able to make $35k/year.
The very subject of this article is why the employer should care. Ethically the owner has no requirement to care. When you can’t find people willing to make the commute then you’ve found when the employer should care.
Small business owners do care about the health and happiness of their employees. But even if we pretend for a moment that they do not, it's a threat to the business viability if workers cannot afford to live within a reasonable commute. If rents continue to outpace wages, those workers will eventually leave the area or the industry. The article talks about the business impacts of people leaving in detail (loss of talent, reduced quality of service, direct hiring costs associated with turnover, etc).
'Reasonable' is defined differently by everyone. Some people would balk at a 30 minute commute. Other people like long haul truckers and sailors choose to be away from home for weeks or months on end. Some people would be okay with and even prefer a 2 hour commute if it means they get paid 3x what they would get paid with a 15 minute commute.
How do you even recruit someone living that far away for a (relatively) low paying, low skill job? 2 hours get's you almost the entire way across the state I live in, people living that far away have often never even visited my city once in their lives. Why would someone who lives as far away as San Jose (apparently just 1hr 30min from SF) be tuned in to the local job boards in SF when there are plenty of job opportunities in their back yard?
I can understand why people with valuable skillsets are willing to balance the cost of commuting from their dream homestead to their place of work but I can't see how this system works for those on the bottom rungs of the societal ladder.
hm. what if the employer starts counting commuting as work time? I mean, the big difference between this and just paying enough that I'm getting more money per hour counting my commute is the recognition that if I'm commuting 10 hours a week, there's not going to be much more than 30 good hours of non-commute work in me.
That sounds ridiculous until you realize that no one is going to pay ~$100 per head every time they go out to eat on a regular basis except for those who have become so wealthy that they have lost all touch with the value of a dollar. I make the rough eauivalent of $175k in San Francisco dollars and if I had to face those prices for a dinner at a mid-range restaurant I simply would not eat out. Restaurants are a luxury that can be easily subsituted with home cooked meals by practically anyone except a Jetset/Road Warrior traveling businessman.
My takeaway from the article is that all "middle class luxury" businesses are slowly being priced out of SF, which is a non-issue for everyone living outside of that bubble but should be of enormous concern to those banking on the future success of the area. Eventually no one will want to move there for a price employers can afford to pay. In the grander scope of things, I'm actually supportive of the concept of fast food and cheap dine-out businesses going under because the habits people form around them are killing us as a people.
I really don't find the evidence agreeing with such a broad statement.
At most you could claim: "A worker in food service with family will not be able to afford living in SF, as a restaurant will not be able to pay the needed salary without raising prices above what the market will bear"
Not arguing that housing is expensive, just that "There is no amount of money an owner could pay an employee within the economics of a small business" is an extremely broad claim and obviously wrong.
High-paying small businesses, especially when employees do not have children to support, do fine. It's not like you see mass retail vacancy in SF.
It's unclear to me whether the author meant two-plus hours one way or round trip (I think they meant one-way, but I'll address both cases).
If the author meant 2+ hours round trip: Lots of tech employees making 200k+ do this regularly. For example, driving from your house to the Fremont BART station and taking the train into downtown San Francisco can easily take 1 hour and 15 minutes one way.
If the author meant 2+ hours one way: There are affordable areas outside of San Francisco's borders that have a reasonable commute. This is especially true if you're willing to have roommates, although that would be more difficult if you have four children like one of the employees mentioned in the article. Oakland comes to mind - you can take the BART from Oakland to the Mission (where the restaurant in the article is located) in ~35 minutes.
While I do think that there is a housing issue in the Bay Area, I don't think the lines you quoted from the article are fair.
This is obviously extreme, but we're in an extreme situation here. Vote with your feet and get out of the city, move away from the Bay. Only once the upper middle class feels some pain will anything be done about it. Until then, it's not their problem, they can work around it thanks to the flexibility wealth affords you. I don't see how else this will be fixed, it has to get much worse before it gets any better.
California has $63b and growing in unfunded pension liabilities. The surplus is only a cash cushion.
The problem is vastly reduced if you can shift healthcare costs from the unfunded pensions to single payer or Medicare for all, I think that’s likely to happen in the next 20 years.
The upper middle class in SF isn't a bunch of asshole NIMBYs who tip badly any more than the lower class is just a bunch of low-life drug dealers. It's a baseless stereotype on both ends. And possibly the most vociferous group blocking housing, Calle 24, is predominately lower class. So I'm not sure it's helpful to paint people with that brush.
Incidentally, I think the young new-money transplants that the author trashes in her article are likely to be more sympathetic on this issue than SF native homeowners.
According to the laws of economics and supply and demand, restaurant prices should be rising accordingly, if customers are still demanding restaurant food. In other words, if the tech industry has produced so much wealth that has driven up rent prices, it should be driving up everything else too, right? People need to go out to eat somewhere, right? (And my experience says this is true -- I live in NYC and I get sticker shock at SF restaurant prices.)
Presumably other restaurants are thriving? Are we sure this particular one just didn't have the right business model, like most attempted restaurants don't? The restaurant industry is notoriously competitive, and the customer is always right -- you've got to give them the food they want (not the food you think they should want) at the location they want at a price that's competitive.
As long as plenty of other restaurants are managing to pay their staff enough so that they'll commute... and it doesn't seem like restaurants are disappearing from SF... then isn't this just the case of a bad business plan, or product-market-mistmatch, for this one particular restaurant?
OK, but that still doesn't explain why "me too" food should outcompete ethnic/specialty/niche food when workers at both kinds of establishment (not to mention the establishments themselves) are paying the exact same rent. Perhaps when eating at a restaurant gets so expensive, people opt to trade off food quality rather than e.g. doing less of it in the first place, or whatever else.
There are somewhat hard limits on the availability of labor though. I know a guy who owns a very popular and expensive restaurant that had to start closing one day a week because he couldn't find enough staff, and not because he pays them peanuts.
There are hard limits on the supply of skilled labor. Less on the supply of semi-skilled labor. The situation implies that some people will substitute less-skilled cooks for skilled ones. Hence the overall quality of SF restaurants will decline but restaurants will continue to exist - those dining out will simply choose the best of a less-good collection.
Has he tried raising the prices of his products? Based on the average rents cited in the article, and what the average tech salary is there, his customers may well be able to afford it.
With alcohol it's not that much cheaper than somewhere like Boulevard or Gary Danko, so unless he were to rack up some Michelin stars, I think the answer is probably no.
In a way I guess he is helping fix the problem by closing one day a week. If the supply of open restaurants go down and the demand stays the same, everyone will be able to raise prices.
When the market price of jet fuel increases, airlines don't cry that they can't find jet fuel, they pay the higher price and then they raise fares.
When the market price of coffee increases, coffee shops don't cry that they can't find coffee, they pay the higher price and then they raise prices.
But when the market price of labor increases, employers don't raise their wages, and then they say they can't find workers and can't afford to pay more.
Why is labor pricing treated differently from any other economic input?
But if customers pay in peanuts and you have to offer staff cashew or macadamias to attract enough skilled employees, you might find you have a non-viable business.
This is my general response whenever these types of articles appear. If your labor costs are insanely high, you need to raise prices. If people won't pay more for your products, you need to create better products worth more money, give staff equity and reduce profit, or shut down.
These types of articles are based on the assumption that we would like to continue having restaurants & the fact that they are (slowly) becoming economically nonviable is a social problem.
If rising prices reduced the demand so much that they become economically nonviable, then it means that we actually don't like having restaurants all that much, otherwise we'd pay.
Voting with your wallet is only one way of expressing a preference. San Francisco in particular also likes to vote with its votes. We may not care enough about restaurants to pay what they really cost, but by all accounts we’ll care enough to vote for a ballot measure that makes “big developers” and “the techies” pay for them.
> ...and it doesn't seem like restaurants are disappearing from SF...
Once they do start to disappear en masse the city will be a less desirable place to live in, rents will drop and restaurants will be able to move back in -- AKA the flip side of the law of supply and demand.
Right now there's a major imbalance with all the Silicon Valley folks wanting to live in the city causing the pricing structure to get all out of wack but eventually it will stabilize as these things tend to do. Just sucks if you're the one trying to keep a service oriented business running in the current market.
Maybe some are, but a lot are not. From my experience the vast majority in SF only last a few years. I talked with a friend who lived in SF for 30 years and he said it's pretty normal to see restaurants regularly go out of business. Supposedly because renting the space is so insanely expensive. But there's always another sucker who thinks they can win this game.
Isn’t that true everywhere? A quick google turns up that 90% of restaurants fail in their first year and the average lifespan for the rest is only five years.
I think it’s because it has relatively low barriers to entry, is something a lot of people want to do, and it seems easy.
Not really. I haven't eaten from a restaurant or a takeout in four years, maybe a few times in the last decade. When on the road I sometimes eat ready made food from a supermarket, but mostly bring something home prepared. Restaurants are a convenience, a luxury even.
It isn't an austerity measure for me though. I enjoy the process and get most meals prepared by someone who really cares about what I want and is the world's leading expert on that subject.
If a country is governed wisely,
its inhabitants will be content.
They enjoy the labor of their hands
and don't waste time inventing
labor-saving machines.
Since they dearly love their homes,
they aren't interested in travel.
There may be a few wagons and boats,
but these don't go anywhere.
There may be an arsenal of weapons,
but nobody ever uses them.
People enjoy their food,
take pleasure in being with their families,
spend weekends working in their gardens,
delight in the doings of the neighborhood.
And even though the next country is so close
that people can hear its roosters crowing and its dogs barking,
they are content to die of old age
without ever having gone to see it.
While you're probably not this extremely content (maybe one std dev outside the norm, not several -- do you ever have dinner parties with guests at your place or a friend's place?), not everyone can live in such a manner, or even consider it. It's what I thought of when reading your comment, though.
In Danville, we see restaurants closing all over the place. Their prices tend to be about 35$ per person with tax and tip for an average meal at a nice restaurant.
Prices are high enough now, where we almost never eat out anymore. Even at the movie theater, I skip the 8$ popcorn and bring some snacks in a bag.
Dining out is substitutable. At some price level, people will simply eat at home. Already there is a transition to counter-service and take-out restaurants, which save on labor and rent, respectively.
I hadn't connected this before: all brick-and-mortar retail is descending the value chain. From JcPenney to Kohls to Wal-mart. From Applebees to Chipotle.
Tl;dr: The rent is too darn high! It's not just individuals that are suffocating because of it, but marginal, specialty/niche retail businesses like this restaurant. They should pack their stuff and move out.
“We thought hard about all the ways we could help from tapping our networks to find a more dignified temporary place for our cook to stay, to figuring out how to pay him more without having him lose access to different low-income programs for which he currently qualifies.”
Wow. Or you could actually pay them a living wage that doesn’t require public subsidy. If this were Walmart making this statement they would be crucified.
If you are a single parent with two children you get the same net income at $30,000 as at $80,0000 due to benefits getting cut off above $30,000/year income.
That’s ridicilous. The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling. I bet the mean salary was right in the Middle of the ”cliff” (around 55k$) when this was decided to ensure very few would get the benifit and cost on government would be minimal.
The logical policy would perhaps be to equalize income to a certain treshold depending on available funds and budget on a particular year. This would also make investments in transits and housing more stable for everyone involved, simplyfing business decisions and quite possibly increase long term profitability.
> The system has clearly been setup to fraud the majority who needs welfare and is a political virtue signaling.
It has this effect, but I'd blame the need to simplify over malevolence.
SF's below market rate housing is a great example of a huge welfare cliff. Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.
So yah, it's a bit ridiculous that we have a system where someone making $59k does better than $70k.
But it's really hard to administer everything as a phase-out system, especially with non-cash benefits. (currently the apartments are required to charge X rent.. so what should happen to the person making $70k/year?)
>Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.
Sounds like SF should experiment with marginal rent, based on how marginal tax rates work. Something like: landlords charge a base $x rent, if you make above $50K a bit more is added one, make above $60K a bit more is added, etc. That was the person making $1 over some arbitrary cutoff isn't much worse off.
That doesn't match other numbers I've seen, and doesn't show any sources. Do you know more about it? (Edit: I'm familiar with the welfare cliff in general, just curious about this analysis of Chicago programs).
So I foolishly read the original sources[1][2]. The image comes from a blog with an obvious libertarian/conservative agenda. For example, another article[3] on the site decries non-discrimination laws for businesses as if red-lining never happened or would have been resolved by market forces (against all historical evidence). This site does not make any explicit recommendations but seems to imply that welfare, as a whole, should be eliminated. Replacing a cliff with a gaping chasm where we can leave our poor to try to scramble their way out.
The original paper[2] is interesting for a few reasons. First, it identifies the problem on page 15 as steep drop offs in some welfare programs, instead of a more tapered reduction in benefits. Second, it's apparent that the linked image is the most extreme scenario - which applies to only a small segment of the population. Indeed, once you look at the 2-parent household example on page 30, the cliff is much less severe. In the end the paper recommends giving individual states more power to set benefits in a way that tapers off the benefit received and removes the welfare cliff.
What neither of these sources mention is the other, tried and true way to address the problem: making many of these benefits universal. The obvious example is healthcare, where those making 30k/year and 120k+/year get access to the same public system. But other public benefits like public childcare are not unheard of[4].
That is a cost of living vs income thing everywhere - although they are an extreme example from their dysfunction. If nobody has a job in the area housing will generally be cheap due to lack of ability for anyone to pay and lack of reason for people to want to live there. If there is plenty of employment in an area it drives up housing demand and prices. There are always alternatives but the price may not be very well liked.
Even Walmart cannot afford to open and staff a store in SF.
Paying restaurant workers a 2-3x living wage is a fine idea except that it would raise the price of a pork chop to $45 and close the restaurant. Darn macroeconomics!
I can tell you why the whole Service Charge Inclusive irritates customers. Its false advertising. You are increasing the cost of the meal but not reflecting it on the menu. People find it dishonest like every other time in our lives where we are told a price, but then we get hit with a fee. Ask bank customers about it.
Just be honest, the meal needs to cost more because the cost of production is more.
I’m all in favor of abolishing tipping culture from the US but that’s not something you can expect a single restaurant to accomplish on their own. Given the reality of US culture I think this is a good compromise for now. It’s much more honest then pretending that the restaurant isn’t expecting a 20% tip on every order.
If you expect a mandatory fee and its not on the item's price, then its dishonest. Sales tax in the US is bad enough, but at least we all know about it and its the government. If they want to break out the "labor" cost on the menu like auto folks do, then fine, but this fee crap is just plain irritating.
Well, you can rage against it. You'll be joined by all the people who never want tipping to end because they're intoxicated by the feeling of power they hold over waitstaff as they decide how much to tip.
Oh give me a break. If you need to charge the money, then you need to be like every other business and charge the money. In fact, they are charging the money, they are just throwing it on at the end as a fee. Businesses who do that are dishonest.
I will note that a service charge on the menu is actually pretty common in a lot of places in Europe. Not saying it’s good or bad but it’s not something a few places in the US have dreamed up.
I'm sure this has done wonders for the degree of warm feelings the SF service-sector has had in the past for techies...I'd just tell everyone I worked as a landscaper.
Hopefully, that'd be because the majority of restaurants are including a service charge with every meal, and not because the waiters have become inured to their techie clientele being chiselling niggardly prats. In circles I move in, being a bad tipper is right up there with shoplifting, dog-kicking or vandalism as a moral failing, and how one treats service employees a touchstone of one's character.
I'd like to get rid of tipping too, and I'm inclined to agree with you that service charge included (suitably noticed) is not a terrible intermediate to get there.
However, that said, restaurateurs need to realize that it changes the business model. Their waiters are no longer de facto independent contractors that have aligned incentives. Instead they are regular wage earning employees that need more management attention. It's fairly easy to see the impact if you go to a restaurant with a service included threshold (e.g. party of six) and try it both ways.
Mensho Tokyo is a ramen place I frequent regularly in SF and that has abolished tips. Every time I go, it's a pleasant surprise and I leave feeling happy about it. I can't recall right now if the prices on the menu are inclusive of the automatic service charge or not… but that's kind of the point. All I'm left with is a positive impression that this place is better than the norm. What I remember is at the end of the meal, I am told by staff that a tip isn't necessary, that it's already included in the service. Compare this to the way many people handle this: they include a mandatory service charge, or worse, a "healthy SF tax," all the while still happily soliciting further tips. It feels like a money-grab.
At the end of the day, it's all about execution, and unless you're able to fully commit to abolishing tips, don't bother trying.
The "healthy SF" 4% mandate is especially egregious. It's simply a common way for restaurants to falsely advertise prices. When I see it, I'm left with a strongly negative impression, and I tip significantly less as a result.
This is ridiculous and incredibly unfair to the service workers. You're not sticking it to restaurant owners by refusing to tip, you're just being an asshole.
How? It is optional and plenty of other people are not tipping. I think you're being an idiot for throwing your money away if you tip because you feel forced to. If you tip because you appreciated the service then it's different.
> It is optional and plenty of other people are not tipping
No it's not and no there aren't! I can't believe you think this is normal. Not tipping unless you particularly appreciate the service is like... dumping your fast food trash out the car window when you're done with it. You can probably do it every week for years and get away with it but it's awful behavior.
On principle I agree with you. I'd be perfectly happy walking into a restaurant that raised prices by 20% across the board and put a note on the menu saying "tipping not expected - our prices account for service."
The problem is that every actor - from the diner to the server - is so used to the tipping system. Diners won't factor in the fact that they don't have to tip, because they will probably still want to tip (as mentioned in the article, a lot of people like the feeling of control tipping gives them). Servers won't like it because unlike a service charge or tip, that 20% baked in isn't only for them and they will feel like the owner is shorting them compared to tips (even if they aren't).
Path dependence is hard. I don't know how to fix this situation.
There's no breaking point, just ever-increasing inequality as an inevitable consequence of structural factors. Feudalism persisted for centuries, and it can again.
You'd think there would be a breaking point somewhere around "we could pay 25% less and still attract top talent to relocate to literally anywhere in the Western world". The cost of living in the SF bubble has long since passed the point of being insulting and the salaries being commanded by those who are driving the continued growth could go so far in other major metro areas that most employees would think they're living like kings even with such a paycut.
Even in the feudal era, early landowners didn't generally pay artificially lower taxes than later landowners. What we have with prop 13 is worse than feudalism.
eh, I think the real problem is that we're building/converting space into office space at a much faster rate than we're building/converting space into residential.
I personally think that to get zoning approval to build an office tower in this area, you should need to get someone to agree to build an apartment tower nearby with a similar number of units. I mean, I'm not saying they need to be owned by the same people or that those apartments will be occupied only by people who work in that office building, but you need housing nearby where there are jobs.
> In nearby San Francisco, only 0.1% of restaurant staff can find affordable housing in the city, with the average monthly rent for a one-bedroom apartment at an insane $3,447.
Lack of affordable housing is doing the suffocation. America was built by a strong middle class, and SF is setting an example of what happens when people stop caring about the middle class and $70K/year becomes low income.
Just because the median apartment is not affordable doesn't mean there isn't affordable housing. Half of all people have apartments that are cheaper than the median.
> figuring out how to pay him more without having him lose access to different low-income programs for which he currently qualifies
Wow, the charitable impulses here are overwhelming. You'll pay him more, as long as it doesn't lift him out of poverty. Wow. Wow.
If you want more staff, pay staff more. This easy equation has been understood for thousands of years but business owners find it difficult to comprehend when it is their business.
A city that is setting aside a large portion of its housing stock for low income people isn't all that capitalist. Businesses have to learn to work with the system.
I'm a big fan of Turkey and Greece home made food. Where I live, one such meal, and if I bring the family, would cost up to 10% of my monthly salary as an engineer with 20 years of experience. The chef at the restaurant earn more then I do.
This article was a bit scattered over the various sources of issues (high living costs, low labor pool (leading to high salaries and high turnover), reduced high-skilled chefs, high taxation, complaints about customer base with some nativism thrown in); figured I'd try simplifying it.
On the labor side, there's enough labor competition to drive salaries of line cooks to $50k/year. That's about $38k post-tax, which even after spending spending $19k/year in rent (split a two bedroom maybe 40 min from downtown) leaves $19k. Not great, but mind you the average line cook in the US is pulling $30k/year pre-tax (24k post-tax) -- the COL difference is pretty much compensated for.
Where things break down badly is with older, more experienced workers that have/might have families (e.g. the cook with 4 kids in the intro paragraph). Space comes at a premium in the Bay Area and if they prefer to not be crammed in to a small place, the salary an experienced worker can make isn't going to cut it to cover the desired marginal living space.
The final piece in the puzzle is that the desired salary multiple of these experienced workers (over entry-level ones) is higher than their productivity gains. That is, if the experienced cook needs twice as much take-home ($110k pre-tax) as the entry-level one (due to family needs), unfortunately, there is insufficient customer demand to pay 2.2x as much for food for this higher quality. (but mind you much more base demand in SF than elsewhere!). Result is that experienced folks move to areas where housing costs (per-sq feet) are lower as a percent of salary.
Net effect might be that the dominant strategy for someone in the restaurant business is to start out in SF but later move to a somewhat lower COL area. With such a strong economic incentive, restaurant composition will likewise follow; city policies, etc. are likely secondary.
One of the challenges, I think, is that landlords don't want to rent to you if your salary isn't three times annual rent. I'm not a real estate professional, but I've been told that multiple times when looking for my own apartments.
In your example, you have the worker coming out okay or possibly slightly ahead (compared to lower COL areas) by spending half their net on rent. But by this 3x rule the landlords renting a property that costs $19k/yr would want to see an income of at least $57k and the worker wouldn't qualify.
>The final piece in the puzzle is that the desired salary multiple of these experienced workers (over entry-level ones) is higher than their productivity gains. That is, if the experienced cook needs twice as much take-home ($110k pre-tax) as the entry-level one (due to family needs), unfortunately, there is insufficient customer demand to pay 2.2x as much for food for this higher quality. (but mind you much more base demand in SF than elsewhere!). Result is that experienced folks move to areas where housing costs (per-sq feet) are lower as a percent of salary.
Or, in even shorter terms, high land rents divert value away from skilled workers and towards largely parasitical speculators.
> Result is that experienced folks move to areas where housing costs (per-sq feet) are lower as a percent of salary.
If working class adults with families aren't able to afford to raise a family in San Francisco and therefore move to lower COL areas, what's the future of San Francisco?
Where will future inexperienced workers come from if not from today's working class families?
The article seems to be transparent at first glance with giving lots of numbers about salaries and so on. Why no numbers on profit and what the owners take home?
Also, there is no mention of trying to raise the prices of their products in order to pay their employees a living wage. I guess that could mean you go out of business if your competition offers a similar product but doesn't raise prices. But I would personally be ok with that. Otherwise what's the service you're really providing? Guilt free eating for your customers who you shield from what those prices are paying the welfare dependent cook? I'm ok with not being in that business.
The tone of the article was really off-putting. I get that it is a hard business, especially in SF, but it felt like she was blaming everyone (including her staff) for her restaurant's failure and taking zero responsibility herself.
I didn't read the article yet but what are some responsibilities an average failed restaurant owner should take? Improper location/menu? Bad hiring? Poor ability keeping staff morale up?
> I didn't read the article yet but what are some responsibilities an average failed restaurant owner should take?
Think of a restaurant owner more like the founder of a start-up. They're literally responsible for everything. Or should be, if they have any sense. Outsourcing every single aspect of a start-up isn't a great idea, is it?
Ideally, a restaurant owner creates the concept, menu, picks the location, hires staff, trains staff, sets service standards, cooks or interacts with guests, orders product, sets prices, etc... You can't just hire people and expect success. If you're a first time owner and not in the restaurant at least 70 hours per week, you're probably going to fail.
I've known several people who have started their own restaurant - let me confirm that the hours required are more than any other job or startup I've ever seen. I am 100%, never, ever, going to start a restaurant.
It can be. Successful restaurants are very profitable (it's possible to do revenue that's 5x your startup cost in the first year, with a 10-20 percent margin, thus paying off your startup costs in 1-2 years). And if you want time off, just close the restaurant for a few weeks in the winter/summer.
Also, restaurateurs can eventually put in a few less hours. The main point is that it pays off to be there for the startup phase, especially if you actually bring skills and talent to your business.
The biggest problem I've seen in restaurants is owners who aren't restaurant people or don't have the right personality and temperament for it.
Probably depends how much of your life you expect to spend at a restaurant. If it's less than all of it I don't think you can expect much of a work/life balance.
I used to live on the same block as her restaurant (Tawla) and only went once (despite eating out pretty frequently). The concept - upscale Mediterranean - just didn't resonate. There's a similar restaurant across the street serving upscale Burmese that seems to be doing really well.
That said, a friend who runs one of my favorite places in SF posted this article to Facebook and said it's really spot on. Diners expect food to be cheaper than the labor market permits.
This is part of the reason that “service included” places don’t pass it through to the menu prices. It’s a mistake to be the only ones doing it (the Bauer review I linked to above just quotes the prices directly, “nobody” mentally compares by adding/removing the 20%).
Since you lived nearby, I always felt that the location was unlikely to succeed. Is there actually a lot of foot traffic there?
Orenshi Ramen, Burma Love, and Shizen all opened in the past few years and seem to be doing really well. On the other hand there’s a spot between 14th & 15th on Valencia that went through 3 restaurants in 3 years.
The places that are succeeding are all second or third efforts - maybe experience really pays off?
we once wanted to eat there when the place was new. the staff was so unfriendly (we were there 5 minutes prior to opening) that we decided that we'd never eat there.
if they were as snobby with other people I'm not surprised they went out of business.
we eat out a lot/ have friends who eat out a lot and I never heard anyone rave about that place.
if I were a cook I'd try to work at the place that everybody wants to eat at OR the place that pays the best. if you're neither it's just bad luck.
You don’t even need an in house ordering machine; everyone has a smart phone so just make a mobile system or website. It’d be easier if there was an aggregator like UberEats but for dine-in.
I've found the McD's self-order UX pretty good. What's bad about it (as someone that hasn't used any other restaurant's self-order).
It's the supermarket self-checkout UX horrible -> I'm automatically treated as a criminal because I can't checkout the next item before bagging the first. I have two hands darnit!
It seems to run at around 10 frames per second and take a thousand milliseconds to respond to input. It also takes way too many taps to add an item to an order, which makes the input delay especially painful.
> I've found the McD's self-order UX pretty good. What's bad about it (as someone that hasn't used any other restaurant's self-order).
My annoyances are particularly as compared to Japanese-style ordering machines, which in my experience are simple, reliable, fast, and easy to use. My complaints, off the top of my head:
* Responsiveness to touch feels about a decade behind consumer capacitive touch displays.
* Gratuitous animations are slow.
* For a simple order where you know exactly what you want, there are far too many steps. (IIRC, for a black coffee, the button tapping flow goes something like this: English -> Hot Beverages -> Coffee -> Small -> Add to Cart -> Checkout -> Paying with card -> Paying with Bank card.) And you have to deal with the slow/bad touch response and animations for every one of these screens.
* There's no way to avoid the machine spitting out a BPA-covered thermal paper receipt. (Other than the receipt dispensation being out of order, which happens pretty frequently.)
When it tells me to “wait for assistance” if I put my four oranges on one by one instead of all at once, or if I lift an item off briefly before replacing it because I need to shift things in the bag, I tend to think they feel I am a criminal. But it does have the side effect of not being able to double scan something.
Their menu and pricing scheme is really what makes it extra terrible. They have far too many needless bundles and inconsistent value with substitutions. Is getting a fry, a shake, and a burger or a burger meal and substituting a soda for a shake the same price as getting everything separately? Is it just the difference between a soda and a shake?
You shouldn't have to waste mental bandwidth on that needless bullshit - the only reasons are price point sleaze.
Does anyone know how much cost would that reduce? You still need to bus tables, and now you need to manage a ticketing system + machinery, which inevitably breaks. Unless it's bar seating area, or you have a sushi-style conveyor belt, you'll still need staff to bring food to tables.
Personally, I prefer the ticketing/ordering machine. Katz's Deli in NYC famously uses a ticketing system.
Many ramen restaurants will have 3 people working but maybe 15-20 seats. I've also seen sit down restaurants with 1 waiter doing 2 floors by a combination of self-service and automated ordering.
SF needs to adopt more Japanese style ordering machines, density, public transit...
You're basically talking about fast food places though not "restaurants". Yes, Ramen is considered fast food in Japan even if some of it is amazing. Also curry rice and most other things that are served in places that use those machines.
Sure, a few places that have those machines have tables but it's still a different vibe from a restaurant.
The bigger issue with those particular machines is they aren't compatible with western or in particular USA culture. Japanese generally don't ask for exceptions. Westerners often ask for tons of exceptions and substitutions either for medical reasons, religion reasons, personal convictions, or preference.
I think in the tech capital, sitting around waiting for someone to seat you, come by and take your drink order, come by and take your food order, bring your food, and check on it (if lucky) is sort of... antiquated. It feels Victorian or something - good food is good food, regardless of who serves it. You’re paying to be pampered, but if the economics of being pampered don’t work then maybe it’s something people can give up?
Go sit down, order from kiosk at table (or from kiosk up front). Panera for instance pretty much does this now.
I think we would be a bit better off if US restaurants felt more comfortable telling customers to take a hike. I'm entirely ok with restaurants that have no vegan/gluten free/whatever options and refuse substitutions.
We have a lot of this sort of thing in LA (yes, in Japanese restaurants). You order by iPad, pay, and then when you get a table after waiting 3-15 minutes, your food comes pretty quickly. When you're done, you leave.
In Portland, not SF. Place I went to 2 months ago gave me a flag with a number on it. When my order was ready, they brought it out to me.
I went there last night. Looked like there was one guy working by himself. He poured my drink and gave me a buzzer. When my food was ready, I went back to pick it up.
It looked pretty clear that the owners figured the cost of the pager system was cheaper than having a second person working.
This is at an indoor soccer place, where he could have somebody from the front desk help cover when he needs to use the restroom, etc. Cooking is mostly putting stuff into a deep fryer.
At a different restaurant, the pager system still might mean going from cashier, cook, and runner to just cashier and cook.
This is really an outrageous suggestion, when so many extremely overqualified people work in restaurants.
If you have paid any attention at all, you would realize we live in an increasingly service-based economy. The repercussions of that undermine your entire thesis, which is the long-time neoliberal position that there are millions of jobs sitting empty for decades on end that could be filled if only people had gotten enough college. Well, the solutions have been pursued and all numbers conclude the diagnosis was false.
What is the cook going to retrain in that’s going to substantially change the picture? The only substantial wage gain would be in tech, and retraining to be a coder/designer/sales person is not a universal panacea, not everyone can do those.
I don’t know. Maybe we should create different categories of work. You are right about technical training.
While people like him ought to be responsible wrt procreation and family planning...surely there has to be something from this side of job market too?
Maybe restaurants WILL disappear. Like movie theatres and book stores and retail eventually will..in that case, cooking is a skill. Perhaps there has to be a program where they can cook for students or in offices with ten clients. Regulations has to be relaxed. CA food laws and business licenses are too stringent and difficult to navigate.
I also want to say that in CA..being reliant on undocumented laborers in the restaurant industry has created an artificial pricing. Food is cheap but rent is high. Labour has become the unmanageable variable while in fact, food was cheap because the savings from hiring cheap labour was passed on to the customer.
Or maybe the solution is going to be universal health care and universal basic income. That might be another possibility but whats happening right now isn’t sustainable.
I can tell how we will create jobs there tho’..instead of having people spraying toxic chemicals in orchards with masks on..we can have autonomous drones or sprayers but staff can be trained to use the programs and equipment. But here is the rub. Where you needed maybe 30 labourers in the field doing low wage job..now one robot and one operator/supervisor can do it for a single high paying job. So..while certainly that one person has upward mobility..what about the rest of the 29 low skill workers? How are they going to be trained and what will they do? This is something tech sector and the govt has to think about...I don’t think we have spent enough time or effort worrying about it or pursuing it...honestly..it’s not killer AI that scares me..but it’s unemployed..poor low skill people who don’t have means to support themselves in a world where jobs will get scarce is what scares me.
I think this type of thinking is shortsighted for a few reasons, but still you have good points. It’s just very hard.
In terms of children, there are many people who feel very strongly that a life goal to raise children is a moral imperative that supercedes any consideration of wealth or affordability.
Many people who can only get low-skilled jobs also rely on their extended network of family, friends, church, whatever. The prospect of moving to a different place is preposterous to them, because even if they had marginally better pay compared to costs of living it would’t matter at all if they don’t have their grandmother nearby to offer frequent free child care, or they couldn’t see a longtime family friend who helps with hard times or addiction issues or many other types of things.
It’s also quite hard to relocate for most people. It’s not like being a cook 5 hours away is the type of job you scout out and uproot your life over. What if that restaurant goes out of business? How much other available employment liquidity is there after you uproot & move? Who pays the relocation costs? What about uprooting kids’ lives?
Finally, a lot of people have generational and/or cultural attachment to a specific place, and they believe that this also supercedes any market conditions related to housing or jobs. Doesn’t matter if it’s a natural disaster, an economic crash, or being priced out by gentrification... you have to imagine the mindset of “this is where I am from, this is where my family is,” and the feeling that if generational home can’t be sustained, that this is a greater loss than it would be to slide into poverty.
Obviously not all of this applies to the situation of the article, but generally this is hard. A lot of people simply commit to an ideology they believe is literally exempt from being affected by economic conditions, and that those values transcend any other type of decision-making.
I share the same sentiment. In my opinion, having children is a huge responsibility, and should not be treated as a default right. If one cannot get themselves into a stable position financially, they shouldn't be raising children. And certainly not four. Having four children without substantial financial security is outrageously irresponsible - people I know that are very well off would hesitate to have even three despite having the technical ability to afford that life.
Why is being a line cook in a relatively high-end SF restaurant a "minimum wage" job? Especially when severs in the same restaurant are apparently bringing home $80-90k a year?
I don't disagree with your point, but one issue in SF and elsewhere in the Bay Area is that tech worker salaries have skyrocketed while wages for everyone else have been relatively flat. Why is that happening and what if anything can be done about it?
> When I set out to open a restaurant in San Francisco’s vibrant restaurant market, I thought I’d employ all I’ve learned from an MBA from a top school, the rigor of an engineering education and a decade and a half launching and managing some of the most successful businesses for Google and other tech companies. Furthermore, I wasn’t naive to think that I knew better than all those who’ve been tenured in the industry. I actively sought out the mentorship of many titans who’ve been generous with their time and knowledge of the industry. So I opened Tawla, a restaurant in San Francisco’s Mission district.
I'm curious what the author is actually adding to the restaurant's value? In the current economic climate in the US, there's more capital than places to put it. Everyone wants to open a restaurant. Not everyone knows how to run one. If she's not cooking, managing the front of house, etc..., what is she doing?
> culinary cultures of Turkey, Greece and the Levant area
There's shawarma shops everywhere in the western world. They all offer Mediterranean/Levantine cuisine, what does this restaurant offer beyond that?
> Over the past two years, it was quickly and often apparent that there’s nothing that a small and young business in SF could do to make the city a living option for its employees.
Yes there is, pay more. And to pay them more, raise prices. If people can afford to pay rent and they still want to go out to eat, they'll pay more. That being said, you need to have a compelling product. Not sure someone with no restaurant background selling a commoditized product is going to be able to produce a compelling product.
> As alluded to earlier, the mass exodus of individuals from this workforce leaves fewer people and less reason for those people to excel.
Yes, people leave because they're not paid enough. Pay more and maybe they'll stay.
> The impact is seen when we tried the aspirational ‘Service Charge Inclusive’ model. Diners were so dismayed by it.
Of course they were. No one likes add-ons that they weren't told about. Instead of adding a 'service charge', just raise the menu prices. You know, the same as in Europe and other places where service is included.
All I see when I read this article is someone who knows nothing about restaurants, adds no value to her own restaurant, claims she's innovative and knows better but then reverts to the restaurant status quo and claims it doesn't work.
This is what I don't get about restaurants. Some of us work in them for 10-40 years. Do our apprenticeships in restaurants that win awards, have Michelin stars, are top 50 in the world, and work 80 hour weeks for decades on end. And then someone who got a little money from Google thinks they can just open something, hire people and be successful. Just imagine if Sergei Brin and Larry page were restaurant managers who thought they could hire a few programmers, rent an office and create Google?
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[ 3.0 ms ] story [ 276 ms ] threadEngineers outside of American tech centers are generally highly underpaid.
I’m not holding my breath for my European government retirement benefit to actually be useful in thirty years, to be honest.
That said it's easy to look over the skills of some of these folks. Being able to be gracious and provide a good customer experience for 8+hrs/day in a hectic environment requires skills that take effort to learn and maintain.
"With the service charge, our servers were making $38 per hour (hourly base + hourly service charge) or the equivalent of $70,000 to $80,000 a year if you were working for us full-time."
If it's a standard 40 hour work week then I agree - it's much higher than I thought.
How do you pay for housing in SF with $900/mo or less?
I picked vue because I prefer it's templates to jsx, and I like vuex and it's sort of well documented for use with laravel. But if I hadn't picked vue, I'd have gone with react because of market domination.
I'm currently even thinking of pivoting from laravel to node based backends because it seems js devs make all the $$... and I'm not so locked into laravel that I can't move or jump to other frameworks.
The more you know the more you can charge...I have many friends who target a specific vertical like Fintech that charge between $100-200/hour for js/node development as freelancers. Working on teams I've made around $35/hr, solo depending on the client I've pitched 40-60... I work w/ a lot of small businesses who that's on the high end for them --they're used to wordpress devs at $25 or less per hour on upwork.
Clojure being a bit obscure though, I think freelance would be harder to secure, but a full-time gig at a shop/agency or startup who's apps are built on that framework would be easier, as long as you have a good portfolio and very active github showing activity w/ that.
What industries do you understand? How can you add business value?
In comparison with my more experienced co-workers that were offering cut-rate deals, I garnered more respect and support, had higher client satisfaction, and almost every client I had decided to stay in my book of business during transitions.
Charge a lot. Be good enough to deserve it. Use that impostor syndrome to up your game.
Part of my issues also were ADHD made it really hard to stay on task and focus but now I'm on meds for that and I'm super focused when I'm in my office, I'm also really neat and orderly around the house lol.
Not to mention, good waiters know about food, wine, spirits and have the soft skills required to put up with people who frequent restaurants.
Anyhow, barrier to entry is a bad excuse. Education does not equal a good living.
> Education does not equal a good living
No but it is heavily correlated with one.
There are plenty of restaurants that will hire an 18 year old with no experience and literally no qualifications to be a waiter. Lots of places when they are looking for experienced staff just hire anyone who had any waiting experience. They aren't nearly as picky as development managers.
I don't know of any software companies that will just hire an 18 year old to write their code without any training or experience. Without a 4 year degree I've seen it take people usually a year or longer of spending all of their free time coding to get their first coding job.
But if you think it's as easy to get your first waiting job as software engineering job(which is very different from my friends experience who has done both), what do you think is the cause of the wage discrepancy?
And they'll likely be working in a chain restaurant barely making more than minimum wage, not breaking $20K per year.
> Lots of places when they are looking for experienced staff just hire anyone who had any waiting experience.
And again, waiters in such a situation will likely not be making much money.
To actually make $60K or more as a waiter, you need to have selling ability, wine knowledge and the skills to get into a better restaurant. You likely won't see anywhere close to this until you have 5 or more years of good experience (not unlike getting a traditional education).
If you're working at Chili's (or equivalent), lets say the average person spends $30. You serve 30 people in a night, that's $900 in sales (18% is $160). Now let's say you work in a high end steakhouse, steaks can run $50 each, appetizers $25 each, and then there's wine. Bottles can run anywhere from $50 to thousands. But let's say you sell a $120 bottle, which is a pretty common price-point in those types of restaurants. For a table of 2, 2 appetizers, 2 steaks and that bottle of wine adds up to $135/per person. Times 30 people per night, around $4K in sales, with tips being $780 (although, in reality, some of that goes to your support staff - bussers, host, sommelier).
Anyhow no, a coder won't get a great job right away. And a server won't get a lucrative job right away. You still need to build up to that point in the restaurant industry. You can't just do what cooks and waiters do at places like Eleven Madison Park, Benu, Saison, etc... without lots of training and experience.
So why shouldn't it be a possibility for a restaurant worker to make a 'professional' income?
I'm not arguing that a restaurant worker shouldn't make a professional income, I'm arguing why they don't.
Do you think it's a conspiracy by restaurant owners to keep down wages?
I wouldn't call that innovative. Innovative would be paying a fixed salaray which allows your staff to live in SF without relying on tips.
Others have done it in the US too. In lots of countries the world over, tipping is a plus, not a requirement.
https://www.nytimes.com/2015/10/15/dining/danny-meyer-restau...
I can understand why people with valuable skillsets are willing to balance the cost of commuting from their dream homestead to their place of work but I can't see how this system works for those on the bottom rungs of the societal ladder.
Long commute times makes it far more difficult to hire. Why wouldn't an employer care about that?
Me: Think about what you just said.
My takeaway from the article is that all "middle class luxury" businesses are slowly being priced out of SF, which is a non-issue for everyone living outside of that bubble but should be of enormous concern to those banking on the future success of the area. Eventually no one will want to move there for a price employers can afford to pay. In the grander scope of things, I'm actually supportive of the concept of fast food and cheap dine-out businesses going under because the habits people form around them are killing us as a people.
At most you could claim: "A worker in food service with family will not be able to afford living in SF, as a restaurant will not be able to pay the needed salary without raising prices above what the market will bear"
Here you go: https://techcrunch.com/2014/04/14/sf-housing/
All the numbers and data have gotten worse in 2014.
Oh yeah, and SF's onerous rules are making it even harder to expand the housing supply: https://www.bizjournals.com/sanfrancisco/news/2018/12/19/hou...
High-paying small businesses, especially when employees do not have children to support, do fine. It's not like you see mass retail vacancy in SF.
If the author meant 2+ hours round trip: Lots of tech employees making 200k+ do this regularly. For example, driving from your house to the Fremont BART station and taking the train into downtown San Francisco can easily take 1 hour and 15 minutes one way.
If the author meant 2+ hours one way: There are affordable areas outside of San Francisco's borders that have a reasonable commute. This is especially true if you're willing to have roommates, although that would be more difficult if you have four children like one of the employees mentioned in the article. Oakland comes to mind - you can take the BART from Oakland to the Mission (where the restaurant in the article is located) in ~35 minutes.
While I do think that there is a housing issue in the Bay Area, I don't think the lines you quoted from the article are fair.
The next recession is going to be brutal.
[1] https://www.politifact.com/california/statements/2018/dec/18...
The problem is vastly reduced if you can shift healthcare costs from the unfunded pensions to single payer or Medicare for all, I think that’s likely to happen in the next 20 years.
Incidentally, I think the young new-money transplants that the author trashes in her article are likely to be more sympathetic on this issue than SF native homeowners.
Presumably other restaurants are thriving? Are we sure this particular one just didn't have the right business model, like most attempted restaurants don't? The restaurant industry is notoriously competitive, and the customer is always right -- you've got to give them the food they want (not the food you think they should want) at the location they want at a price that's competitive.
As long as plenty of other restaurants are managing to pay their staff enough so that they'll commute... and it doesn't seem like restaurants are disappearing from SF... then isn't this just the case of a bad business plan, or product-market-mistmatch, for this one particular restaurant?
If your friend can't find enough people then the wage he's paying is less than the market-clearing price.
Doesn't matter if you or I think their pay is peanuts or not.
When the market price of coffee increases, coffee shops don't cry that they can't find coffee, they pay the higher price and then they raise prices.
But when the market price of labor increases, employers don't raise their wages, and then they say they can't find workers and can't afford to pay more.
Why is labor pricing treated differently from any other economic input?
Not paying peanuts still doesn't mean it's enough.
Anyhow, my opinion as someone in the restaurant business, the blogger's business had plenty of flaws.
That's what I wrote.
Once they do start to disappear en masse the city will be a less desirable place to live in, rents will drop and restaurants will be able to move back in -- AKA the flip side of the law of supply and demand.
Right now there's a major imbalance with all the Silicon Valley folks wanting to live in the city causing the pricing structure to get all out of wack but eventually it will stabilize as these things tend to do. Just sucks if you're the one trying to keep a service oriented business running in the current market.
Maybe some are, but a lot are not. From my experience the vast majority in SF only last a few years. I talked with a friend who lived in SF for 30 years and he said it's pretty normal to see restaurants regularly go out of business. Supposedly because renting the space is so insanely expensive. But there's always another sucker who thinks they can win this game.
I think it’s because it has relatively low barriers to entry, is something a lot of people want to do, and it seems easy.
This is how the restaurant industry works everywhere. It's how most small businesses work.
Not really. I haven't eaten from a restaurant or a takeout in four years, maybe a few times in the last decade. When on the road I sometimes eat ready made food from a supermarket, but mostly bring something home prepared. Restaurants are a convenience, a luxury even.
It isn't an austerity measure for me though. I enjoy the process and get most meals prepared by someone who really cares about what I want and is the world's leading expert on that subject.
I'm seriously not trying to poke fun but do you mean your mother?
Prices are high enough now, where we almost never eat out anymore. Even at the movie theater, I skip the 8$ popcorn and bring some snacks in a bag.
She doesn't realize that she has a role in this as well? How much did she pay for her house/rent? Did she outbid someone in cash?
Yes, I realize the supply side is a major issue to. SF should build more.
It's just the finger pointing (those evil landlords with their Ellis evictions!) made me chuckle a bit.
Wow. Or you could actually pay them a living wage that doesn’t require public subsidy. If this were Walmart making this statement they would be crucified.
https://www.learnliberty.org/wp-content/uploads/2016/08/welf...
If you are a single parent with two children you get the same net income at $30,000 as at $80,0000 due to benefits getting cut off above $30,000/year income.
The logical policy would perhaps be to equalize income to a certain treshold depending on available funds and budget on a particular year. This would also make investments in transits and housing more stable for everyone involved, simplyfing business decisions and quite possibly increase long term profitability.
It has this effect, but I'd blame the need to simplify over malevolence.
SF's below market rate housing is a great example of a huge welfare cliff. Make under $60k? You can get a 1 bedroom for $1600/month. Don't? Join everyone else fighting at $3k/month or what not.
So yah, it's a bit ridiculous that we have a system where someone making $59k does better than $70k.
But it's really hard to administer everything as a phase-out system, especially with non-cash benefits. (currently the apartments are required to charge X rent.. so what should happen to the person making $70k/year?)
Hence, these blunt-edge qualifications.
They should ask they employer to only pay them $59k?
Sounds like SF should experiment with marginal rent, based on how marginal tax rates work. Something like: landlords charge a base $x rent, if you make above $50K a bit more is added one, make above $60K a bit more is added, etc. That was the person making $1 over some arbitrary cutoff isn't much worse off.
The original paper[2] is interesting for a few reasons. First, it identifies the problem on page 15 as steep drop offs in some welfare programs, instead of a more tapered reduction in benefits. Second, it's apparent that the linked image is the most extreme scenario - which applies to only a small segment of the population. Indeed, once you look at the 2-parent household example on page 30, the cliff is much less severe. In the end the paper recommends giving individual states more power to set benefits in a way that tapers off the benefit received and removes the welfare cliff.
What neither of these sources mention is the other, tried and true way to address the problem: making many of these benefits universal. The obvious example is healthcare, where those making 30k/year and 120k+/year get access to the same public system. But other public benefits like public childcare are not unheard of[4].
[1] https://www.learnliberty.org/blog/the-welfare-cliff-and-why-...
[2] https://d2dv7hze646xr.cloudfront.net/wp-content/uploads/2014...
[3] https://www.learnliberty.org/blog/the-sweet-cakes-case-let-t...
[4] https://eric.ed.gov/?id=ED367491
It's a problem if you have children to support.
Paying restaurant workers a 2-3x living wage is a fine idea except that it would raise the price of a pork chop to $45 and close the restaurant. Darn macroeconomics!
Just be honest, the meal needs to cost more because the cost of production is more.
Maybe some day we'll get it and sales tax to be part of the list price. But that will probably take legal force.
However, that said, restaurateurs need to realize that it changes the business model. Their waiters are no longer de facto independent contractors that have aligned incentives. Instead they are regular wage earning employees that need more management attention. It's fairly easy to see the impact if you go to a restaurant with a service included threshold (e.g. party of six) and try it both ways.
At the end of the day, it's all about execution, and unless you're able to fully commit to abolishing tips, don't bother trying.
The "healthy SF" 4% mandate is especially egregious. It's simply a common way for restaurants to falsely advertise prices. When I see it, I'm left with a strongly negative impression, and I tip significantly less as a result.
No it's not and no there aren't! I can't believe you think this is normal. Not tipping unless you particularly appreciate the service is like... dumping your fast food trash out the car window when you're done with it. You can probably do it every week for years and get away with it but it's awful behavior.
The problem is that every actor - from the diner to the server - is so used to the tipping system. Diners won't factor in the fact that they don't have to tip, because they will probably still want to tip (as mentioned in the article, a lot of people like the feeling of control tipping gives them). Servers won't like it because unlike a service charge or tip, that 20% baked in isn't only for them and they will feel like the owner is shorting them compared to tips (even if they aren't).
Path dependence is hard. I don't know how to fix this situation.
I personally think that to get zoning approval to build an office tower in this area, you should need to get someone to agree to build an apartment tower nearby with a similar number of units. I mean, I'm not saying they need to be owned by the same people or that those apartments will be occupied only by people who work in that office building, but you need housing nearby where there are jobs.
Lack of affordable housing is doing the suffocation. America was built by a strong middle class, and SF is setting an example of what happens when people stop caring about the middle class and $70K/year becomes low income.
Wow, the charitable impulses here are overwhelming. You'll pay him more, as long as it doesn't lift him out of poverty. Wow. Wow.
If you want more staff, pay staff more. This easy equation has been understood for thousands of years but business owners find it difficult to comprehend when it is their business.
If a salary increase makes him ineligible for the services that he's using to stay in the city, the higher salary could be an effective cut in pay.
While it's possible to pay him a large enough salary to make up for those services, it's likely more than the business can afford.
On the labor side, there's enough labor competition to drive salaries of line cooks to $50k/year. That's about $38k post-tax, which even after spending spending $19k/year in rent (split a two bedroom maybe 40 min from downtown) leaves $19k. Not great, but mind you the average line cook in the US is pulling $30k/year pre-tax (24k post-tax) -- the COL difference is pretty much compensated for.
Where things break down badly is with older, more experienced workers that have/might have families (e.g. the cook with 4 kids in the intro paragraph). Space comes at a premium in the Bay Area and if they prefer to not be crammed in to a small place, the salary an experienced worker can make isn't going to cut it to cover the desired marginal living space.
The final piece in the puzzle is that the desired salary multiple of these experienced workers (over entry-level ones) is higher than their productivity gains. That is, if the experienced cook needs twice as much take-home ($110k pre-tax) as the entry-level one (due to family needs), unfortunately, there is insufficient customer demand to pay 2.2x as much for food for this higher quality. (but mind you much more base demand in SF than elsewhere!). Result is that experienced folks move to areas where housing costs (per-sq feet) are lower as a percent of salary.
Net effect might be that the dominant strategy for someone in the restaurant business is to start out in SF but later move to a somewhat lower COL area. With such a strong economic incentive, restaurant composition will likewise follow; city policies, etc. are likely secondary.
In your example, you have the worker coming out okay or possibly slightly ahead (compared to lower COL areas) by spending half their net on rent. But by this 3x rule the landlords renting a property that costs $19k/yr would want to see an income of at least $57k and the worker wouldn't qualify.
Or, in even shorter terms, high land rents divert value away from skilled workers and towards largely parasitical speculators.
If working class adults with families aren't able to afford to raise a family in San Francisco and therefore move to lower COL areas, what's the future of San Francisco?
Where will future inexperienced workers come from if not from today's working class families?
Also, there is no mention of trying to raise the prices of their products in order to pay their employees a living wage. I guess that could mean you go out of business if your competition offers a similar product but doesn't raise prices. But I would personally be ok with that. Otherwise what's the service you're really providing? Guilt free eating for your customers who you shield from what those prices are paying the welfare dependent cook? I'm ok with not being in that business.
Think of a restaurant owner more like the founder of a start-up. They're literally responsible for everything. Or should be, if they have any sense. Outsourcing every single aspect of a start-up isn't a great idea, is it?
Ideally, a restaurant owner creates the concept, menu, picks the location, hires staff, trains staff, sets service standards, cooks or interacts with guests, orders product, sets prices, etc... You can't just hire people and expect success. If you're a first time owner and not in the restaurant at least 70 hours per week, you're probably going to fail.
Also, restaurateurs can eventually put in a few less hours. The main point is that it pays off to be there for the startup phase, especially if you actually bring skills and talent to your business.
The biggest problem I've seen in restaurants is owners who aren't restaurant people or don't have the right personality and temperament for it.
That said, a friend who runs one of my favorite places in SF posted this article to Facebook and said it's really spot on. Diners expect food to be cheaper than the labor market permits.
Since you lived nearby, I always felt that the location was unlikely to succeed. Is there actually a lot of foot traffic there?
The places that are succeeding are all second or third efforts - maybe experience really pays off?
Plenty of restaurants are doing fine; she simply didn't produce what people wanted.
SF needs to adopt more Japanese style ordering machines. You choose and pay up front. When you are done you just leave. It's beautiful.
I feel like North American restaurants are only willing to implement these with awful touchscreen UX, like the McDonald's touchscreen displays.
I don't know how the economics work out in Japan. I'm sure a large part is cultural and shared knowledge.
Maybe there's an opportunity for vendors of Japanese ticketing machines to jump into the San Francisco market??
It's the supermarket self-checkout UX horrible -> I'm automatically treated as a criminal because I can't checkout the next item before bagging the first. I have two hands darnit!
My annoyances are particularly as compared to Japanese-style ordering machines, which in my experience are simple, reliable, fast, and easy to use. My complaints, off the top of my head:
* Responsiveness to touch feels about a decade behind consumer capacitive touch displays.
* Gratuitous animations are slow.
* For a simple order where you know exactly what you want, there are far too many steps. (IIRC, for a black coffee, the button tapping flow goes something like this: English -> Hot Beverages -> Coffee -> Small -> Add to Cart -> Checkout -> Paying with card -> Paying with Bank card.) And you have to deal with the slow/bad touch response and animations for every one of these screens.
* There's no way to avoid the machine spitting out a BPA-covered thermal paper receipt. (Other than the receipt dispensation being out of order, which happens pretty frequently.)
> It's the supermarket self-checkout UX horrible
Oh, we have our own egregious example of that up in Canada, where the largest grocery chain in the country got rid of most of the text on self-checkouts in favour of just icons: https://www.blogto.com/tech/2018/05/loblaws-self-checkout-sy...
You shouldn't have to waste mental bandwidth on that needless bullshit - the only reasons are price point sleaze.
Personally, I prefer the ticketing/ordering machine. Katz's Deli in NYC famously uses a ticketing system.
SF needs to adopt more Japanese style ordering machines, density, public transit...
Sure, a few places that have those machines have tables but it's still a different vibe from a restaurant.
The bigger issue with those particular machines is they aren't compatible with western or in particular USA culture. Japanese generally don't ask for exceptions. Westerners often ask for tons of exceptions and substitutions either for medical reasons, religion reasons, personal convictions, or preference.
Go sit down, order from kiosk at table (or from kiosk up front). Panera for instance pretty much does this now.
It seems to work. We Americans can adapt!
I went there last night. Looked like there was one guy working by himself. He poured my drink and gave me a buzzer. When my food was ready, I went back to pick it up.
It looked pretty clear that the owners figured the cost of the pager system was cheaper than having a second person working.
This is at an indoor soccer place, where he could have somebody from the front desk help cover when he needs to use the restroom, etc. Cooking is mostly putting stuff into a deep fryer.
At a different restaurant, the pager system still might mean going from cashier, cook, and runner to just cashier and cook.
1. They should have either not had four kids or 2. should train to pick a higher paying job. 3. Or move to a cheaper part of the country.
The question is: how do we train people for better jobs or when jobs aren’t available, how do we make sure they ..well..live?
These are the questions we should be asking and not talking about SF restaurants and housing unavailability.
Where is the ‘Linkedin’ and retraining resources for people like this cook?
This author with a MBA just didn’t make compelling reading.
If you have paid any attention at all, you would realize we live in an increasingly service-based economy. The repercussions of that undermine your entire thesis, which is the long-time neoliberal position that there are millions of jobs sitting empty for decades on end that could be filled if only people had gotten enough college. Well, the solutions have been pursued and all numbers conclude the diagnosis was false.
While people like him ought to be responsible wrt procreation and family planning...surely there has to be something from this side of job market too?
Maybe restaurants WILL disappear. Like movie theatres and book stores and retail eventually will..in that case, cooking is a skill. Perhaps there has to be a program where they can cook for students or in offices with ten clients. Regulations has to be relaxed. CA food laws and business licenses are too stringent and difficult to navigate.
I also want to say that in CA..being reliant on undocumented laborers in the restaurant industry has created an artificial pricing. Food is cheap but rent is high. Labour has become the unmanageable variable while in fact, food was cheap because the savings from hiring cheap labour was passed on to the customer.
Or maybe the solution is going to be universal health care and universal basic income. That might be another possibility but whats happening right now isn’t sustainable.
I can tell how we will create jobs there tho’..instead of having people spraying toxic chemicals in orchards with masks on..we can have autonomous drones or sprayers but staff can be trained to use the programs and equipment. But here is the rub. Where you needed maybe 30 labourers in the field doing low wage job..now one robot and one operator/supervisor can do it for a single high paying job. So..while certainly that one person has upward mobility..what about the rest of the 29 low skill workers? How are they going to be trained and what will they do? This is something tech sector and the govt has to think about...I don’t think we have spent enough time or effort worrying about it or pursuing it...honestly..it’s not killer AI that scares me..but it’s unemployed..poor low skill people who don’t have means to support themselves in a world where jobs will get scarce is what scares me.
In terms of children, there are many people who feel very strongly that a life goal to raise children is a moral imperative that supercedes any consideration of wealth or affordability.
Many people who can only get low-skilled jobs also rely on their extended network of family, friends, church, whatever. The prospect of moving to a different place is preposterous to them, because even if they had marginally better pay compared to costs of living it would’t matter at all if they don’t have their grandmother nearby to offer frequent free child care, or they couldn’t see a longtime family friend who helps with hard times or addiction issues or many other types of things.
It’s also quite hard to relocate for most people. It’s not like being a cook 5 hours away is the type of job you scout out and uproot your life over. What if that restaurant goes out of business? How much other available employment liquidity is there after you uproot & move? Who pays the relocation costs? What about uprooting kids’ lives?
Finally, a lot of people have generational and/or cultural attachment to a specific place, and they believe that this also supercedes any market conditions related to housing or jobs. Doesn’t matter if it’s a natural disaster, an economic crash, or being priced out by gentrification... you have to imagine the mindset of “this is where I am from, this is where my family is,” and the feeling that if generational home can’t be sustained, that this is a greater loss than it would be to slide into poverty.
Obviously not all of this applies to the situation of the article, but generally this is hard. A lot of people simply commit to an ideology they believe is literally exempt from being affected by economic conditions, and that those values transcend any other type of decision-making.
Why is being a line cook in a relatively high-end SF restaurant a "minimum wage" job? Especially when severs in the same restaurant are apparently bringing home $80-90k a year?
I don't disagree with your point, but one issue in SF and elsewhere in the Bay Area is that tech worker salaries have skyrocketed while wages for everyone else have been relatively flat. Why is that happening and what if anything can be done about it?
I'm curious what the author is actually adding to the restaurant's value? In the current economic climate in the US, there's more capital than places to put it. Everyone wants to open a restaurant. Not everyone knows how to run one. If she's not cooking, managing the front of house, etc..., what is she doing?
> culinary cultures of Turkey, Greece and the Levant area
There's shawarma shops everywhere in the western world. They all offer Mediterranean/Levantine cuisine, what does this restaurant offer beyond that?
> Over the past two years, it was quickly and often apparent that there’s nothing that a small and young business in SF could do to make the city a living option for its employees.
Yes there is, pay more. And to pay them more, raise prices. If people can afford to pay rent and they still want to go out to eat, they'll pay more. That being said, you need to have a compelling product. Not sure someone with no restaurant background selling a commoditized product is going to be able to produce a compelling product.
> As alluded to earlier, the mass exodus of individuals from this workforce leaves fewer people and less reason for those people to excel.
Yes, people leave because they're not paid enough. Pay more and maybe they'll stay.
> The impact is seen when we tried the aspirational ‘Service Charge Inclusive’ model. Diners were so dismayed by it.
Of course they were. No one likes add-ons that they weren't told about. Instead of adding a 'service charge', just raise the menu prices. You know, the same as in Europe and other places where service is included.
All I see when I read this article is someone who knows nothing about restaurants, adds no value to her own restaurant, claims she's innovative and knows better but then reverts to the restaurant status quo and claims it doesn't work.
This is what I don't get about restaurants. Some of us work in them for 10-40 years. Do our apprenticeships in restaurants that win awards, have Michelin stars, are top 50 in the world, and work 80 hour weeks for decades on end. And then someone who got a little money from Google thinks they can just open something, hire people and be successful. Just imagine if Sergei Brin and Larry page were restaurant managers who thought they could hire a few programmers, rent an office and create Google?
Innovating.