The spring and summer of 2020 brought a reckoning for many Americans, with a global pandemic causing mass unemployment and the murder of George Floyd spurring protesters across the country to decry police violence against Black lives. For the restaurant industry, these events brought every failure and uncomfortable truth to the forefront — and exploited and jobless workers suddenly had plenty of time for such conversations.
Social media was flooded with infographics about the racist origins of tipping and the inequities that have kept the hospitality machine running in America since its birth at the blurry end of legalized slavery in this country. Capitalism itself was under a lens, the unfair concentration of power and profit magnified with every report of another billionaire doubling or tripling wealth. Replacing this economic and political system is a long shot, but anti-capitalist practices have existed in bars and restaurants for years now. So what does this look like, and why should everyone care?
Capitalism is an economic system wherein the means of production of goods and services is privately owned rather than state-owned, with those private owners reaping the sole benefit of profits. That leaves the “means of production” — bartenders straining your Margarita and line cooks preparing your al dente pasta — in the hospitality industry exposed to exploitation thanks to notoriously slim margins for success. And since the hospitality industry, like most in this country, was built on the backs of Black people, it should be surprising to no one that the mistreatment of BIPOC, immigrant, and undocumented workers remains prevalent, despite their significant majority as employees in restaurants today.
One of the most basic ways an establishment can ensure the safety of its staff is by providing stable pay. Sadly, tipped workers who serve guests in bars and restaurants often make a subminimum wage, which is legal in all but seven states. Organizations like One Fair Wage seek to end this subminimum wage, but so have business owners.
In 2015, the practice of paying restaurant staff a higher but un-tipped wage cropped up noticeably. Prominent chefs like Alice Waters at Chez Panisse in Berkeley, Calif., began including service fees in guests’ checks in order to facilitate the change, while now-closed Bar Agricole in San Francisco raised its prices 20 percent to do the same. Chef Amanda Cohen was an early advocate for abolishing tipping in New York City when she adopted the practice at her Lower East Side location of Dirt Candy.
A Level Field
One of the most prominent supporters of the movement was Union Square Hospitality Group’s Danny Meyer, who announced back in 2015 that USHG would gradually end tipping and raise menu prices at all of its restaurants. Citing pay disparities between back- and front-of-house employees, which often fuels an unspoken feud between the two, the move to eliminate tipping at such a large and influential restaurant group convinced others to follow suit. This past summer, Meyer reversed the company’s “Hospitality Included” policy, meaning that servers at Gramercy Tavern and Union Square Cafe (to name just a couple) are once again working for tips.
Where Meyer posited that staff should benefit from guests wanting to tip generously in the wake of an economic crisis, Stephanie Watanabe, co-founder of Brooklyn wine bar Coast and Valley, found the opposite to be true. “We instituted a universal living wage, which was super important for us,” she says. “I think we did that in the summer after realizing that folks were not tipping.”
With tips plummeting, Watanabe and her partner Eric Hsu began to have the conversation about livable wages with their staff. “It really solidified for us when Covid hit: People before profits, period. It’s non-negotiable,” she says.
Thanks to her background in filmmaking in Hollywood, Watanabe brought outside perspectives to the argument against tipping, too. The “Most Favored Nations” clause utilized in movie contracts for smaller independent projects — paying the A-list celebrities the same amount as the supporting players — inspired her to try something similar. “We saw the dynamic between dining room and kitchen [employees], and it really bothered us,” says Watanabe of the tipped FOH/untipped BOH schism. “So for me, this was a way to level that and say, ‘No. We’re not going to pay this person less because somehow their job is deemed less valuable than the person who is able to go to get their WSET [Wine & Spirit Education Trust certification].’”
The friction between staff, coupled with the usual caveats of tipping — tipped workers experience higher rates of sexual harassment and people of color are tipped less than their white coworkers — led to a discussion with staff about experimenting with a fixed wage. “We understand the deep roots that tipping has and how ultimately, it’s incredibly, incredibly harmful and racist, and that doesn’t sit well,” Watanabe says. “Every single person, including the owner, gets paid $25 an hour.” This anti-capitalist strategy, which values humans over money, brings her staff equality and stability. It is not, however, an easy way to run a business in America.
“Every month, we’re losing money. But we’re like, ‘and?’” says Watanabe. “Then so be it, then our business can’t survive. Period. And that’s a shame, but it’s also a function of capitalism and society and these systems and structures that exist.”
With profit margins hovering around 1 percent at places like Coast and Valley right now, most investors would be hesitant to risk it all, but many of Watanabe and Hsu’s backers are friends and family who truly believe in their vision. The team recognizes the real struggle that most bars face. “There are good folks out there, and the problem isn’t [that] owners don’t want to pay their people. Some of the time, it’s that they can’t,” Watanabe says.
Even for the big players, a seemingly minimal loss in income might come with strings attached. “Who knows if they’ve got investors and people that they’re beholden to that don’t share their commitment to those things?” Watanabe says. “Then oftentimes, you don’t have a lot of control over it. And that’s where capitalism kind of just comes in and wreaks havoc.”
Nobody is saying that flouting our capitalist tendencies is painless. “To do the right thing is really, really, really hard in this world that we live in,” Watanabe says. “I think it’s like you’re stuck between a rock and a hard place. But for Eric and I, … we can’t violate our own integrity, and so maybe that means we’re bad business people. And at the end of the day, I’d rather be a bad business person than a bad person.”
A High Road
Andrea Borgen Abdallah, owner of Barcito & Bodega in Los Angeles, was once a general manager at Union Square Hospitality Group’s Blue Smoke in Battery Park City, Calif. “I became really interested in that model and what it hopes to achieve — especially when it came to dealing with the inequity between kitchen staff and waitstaff,” she says. Borgen Abdallah followed USHG’s lead and did away with tipping less than a year after Barcito’s September 2015 opening.
Thanks to the restaurant’s proximity to the L.A. Convention Center, Borgen Abdallah noticed business was very cyclical. “[On a] Monday, I would out-sell a Friday night, and there was no method to the madness,” she says. But eliminating tipping created stability for her employees, ensuring that shifts would be predictably fruitful on any given day. “I was also able to introduce healthcare as a result of that,” Borgen Abdallah says — no small feat, given that the Affordable Care Act only requires insurance to be offered if an establishment has a larger staff of 50 or more full-time employees.
In March of 2020, with the shutdowns brought upon by the rise of Covid in the U.S., Borgen Abdallah closed her restaurant and made two important decisions. First, Barcito would continue to pay for the health insurance of its furloughed employees. Second, it would keep jobs available for anyone lacking a solid safety net. In this way, even though the restaurant was unable to provide the same hours, it was able to keep its doors open and its vulnerable staff cared for.
Last year, Barcito was also one of the first restaurants to participate in High Road Kitchens — a group of restaurants working to provide food on a sliding scale to low-wage workers, healthcare workers, and others in need. One Fair Wage, which fights to end subminimum wages nationwide, oversees the program through RAISE (Restaurants Advancing Industry Standards in Employment). Participating High Road Restaurants like Barcito commit to advocating for fair wages and increased racial and gender equity through hiring, training, and promotional practices.
Borgen Abdallah’s dedication to the fight for better wages began while working directly for One Fair Wage in the past, even making trips to Washington, D.C., and her commitment doesn’t seem to be waning. “I think this pandemic certainly exacerbated a lot of the issues that we’ve had for a really long time,” she says. “And I think a lot of people wanted to sweep [them] under the rug and finally were forced to reconcile.” Now, with all that is known about the instability of a life reliant on tips without guaranteed access to healthcare, paid leave, and other benefits, real change could be on the horizon.
It has been one year since the start of the pandemic, and the cry of the overworked and underinsured is once again becoming just a murmur. An increase in vaccine availability quiets much of the fear of going back to a job where contracting Covid remains a danger, but bar and restaurant workers are still far from safe. Returning to work during a national emergency can be confusing, adding new ways for management to exploit staff such as through unsafe Covid practices, unexplained pay changes, and denial of federally required paid sick leave. After so much loss and disruption, mental health is suffering, and affordable insurance is often still tied to employment. One look at the long list of resources put together by the Restaurant Workers Community Foundation, a nonprofit created by and for restaurant workers, gives some insight into just how vastly workers’ lives have been and continue to be affected.
With the passing of President Biden’s latest Covid relief package, small restaurants received access to $28.6 billion in grants, but a $15 federal minimum wage amendment failed. “I think people kind of started to talk about [issues for restaurants],” observes Watanabe, “but it was just like ‘bailout bailout bailout!’ But … that’s not going to cut it anymore.”
Last month, Barcito was able to get all of its employees vaccinated against Covid. As eligibility opens up to the rest of the public, a new normalcy feels within reach. But the sense of urgency to repair broken systems within hospitality threatens to dwindle. “I feel like it has kind of started to fall to the wayside,” Borgen Abdallah says. “The light at the end of the tunnel gets brighter and brighter, and I think it’s just important that we [have] those conversations and that that continues to feel really urgent.”
Anti-capitalist methods can actually work well within our capitalist society, even beyond championing workers’ rights through ensuring stable wages, paid time off, health care, or shared ownership opportunities. American bars and restaurants will need to look at sustainability and minimizing harm not just to people, but to the environment. Ambitious bar programs that are eliminating plastics — eco-friendly paper, metal, bamboo, and even hay straws have become standard — tackling water usage, and targeting waste by focusing on the creative use of what most might toss out have a real chance to lead the way as well.
“I’m hopeful, but I also am disappointed in the industry,” says Watanabe. “I feel like we’ve had a year where we could have addressed some really deep problematic systemic problems in this industry.” Businesses must look frankly once again at where they are lacking in response to the racism, sexism, and ableism that has pervaded hospitality since its early beginnings in this country. If capitalism benefits from white supremacy, then now is the time to challenge them both. “Ultimately, it’s not just about hospitality,” Watanabe says. “This is happening all over the place, and there’s a lot of reckonings happening. It’s really about changing the way we do business to be more conscious, to be more people-centered, to be more thoughtful.”
2020 may have broken us down with its harsh realities, shuttering more than 110,000 bars and restaurants nationwide, but as long as we can keep the momentum of learning and reimagining a better future for this industry — one where it values lives over profits — there is hope. “It’s been a tough year,” says Borgen Abdallah. “I think a lot of it could have been avoided had we done things differently, and I don’t think reverting back to the old way of doing things is the answer.”