ROCHESTER/BUFFALO — THE $20 BURGER
Like a good burger?
Would you pay $20 for one?
As much as she hates the idea of a $20 burger, Kristen Fratto-Florez fears it’s coming. She and her husband own The Gate House in Rochester.
“This is a casual, family place. This is place where groups come with their kids and their grandparents. They come three times a week sometimes because they can afford to do that,” Fratto-Florez said.
The house specialties are hand-tossed pizzas and lavish burgers. The burgers run from $12-17.
“My husband and myself have invested everything in this business model that is based on a sixteen-dollar burger,” Fratto-Florez said. “My clientele, the people who come to The Gate House are not willing to spend more than that.”
So, why the talk about burgers costing $20?
GOVERNOR CUOMO ORDERS REVIEW OF TIPPED WAGE CREDIT
Back in December, Governor Andrew Cuomo made some news on the radio talk show of grocery store billionaire John Catsimatidis. Wrapping up the interview, Catsimatidis asked what New Yorkers might expect in the coming year.
Cuomo then announced he wanted to look at getting rid of the tipped wage credit.
The Governor explained, “I’m going to start a set of hearings on that because I don’t think that’s working well. It hurts immigrants. Seventy-percent of the employees are women. That’s one of the inequities that were going to be looking at and I’m going to be starting that now.”
Quickly, a series of public hearings were held across the state. Labor Department Commissioner Rita Reardon presided over the so-called “sub-minimum wage hearings”.
WHAT’s THE “SUB-MINIMUM WAGE”?
The minimum wage now in western New York is $10.40 per hour. Workers who collect tips often get less.
It’s typical that restaurant wait staff and some workers at car washes get the subminimum rate of $7.50 per hour. It is expected that these workers will make up the rest with tips from customers.
By state law, in any given work week, if these tipped workers do not average $10.40 per hour combining tips and their subminimum hourly rate, then employers are required to top their paychecks off with cash to reach the minimum wage.
PUSHING TO CHANGE THE RESTAURANT INDUSTRY
The loudest voices calling for elimination of the state’s minimum wage belong to the Restaurant Opportunities Center. It is a labor union supported organization that has been working state by state to change how restaurant workers are paid.
ROC boasts of 13,000 members, has 10 offices around the country, and successfully advocated to eliminate subminimum wages in seven states.
Governor Cuomo in his official announcement of New York’s subminimum wage review seemed to lean heavily on ROC talking points alleging the system is unfair to women and minorities who make up a majority of tipped wage workers.
Supporting the elimination of the subminimum wage in the Buffalo area is UB associate law professor Nicole Hallett.
“There’s widespread wage theft in the restaurant industry,” Hallett said.
She points to a study by the Partnership for the Public Good on low-wage workers in Buffalo and Erie County.
Some 29 tipped wage workers were asked if their employer ever took some of their tips. Seven, or 24%, said yes.
The sample size for that question is far too small to draw scientific conclusions about wage theft.
Asked if the issue of wage theft would be better addressed with more aggressive enforcement of state law, Hallett said that would mean adding many more Labor Department inspectors and investigators and that could get expensive.
“The level of enforcement that you would actually need in order to make sure restaurant owners were complying with the law would be way higher than we have now,” Hallet said.
She continued, “There are many workers who are working at lower end restaurants where the clientele tips less and those are the workers that will really benefit from his proposal.”
“WE MAKE GREAT MONEY”
It’s a busier than usual lunch crowd at the The Gate House.
For the wait staff, it’s an opportunity to make more money.
“I’m very social and outgoing and love moving around, interacting with people. I feel it’s rewarding and I love coming to work,” Stacy Glasgow said.
She’s been waiting tables for most of her adult life. It more than pays the bills for her.
“I drive a brand new Jeep. I take vacations quite a bit. I feel privileged and blessed to be able to do this," Glasgow said.
Bridget Volta is splitting time this day between waiting tables and tending bar, “It’s hard work being on your feet all day for hours and hours, but we make good money.”
At the end of the lunch rush, Vontrice Mounnarat sat down long enough to tell us, “I have a daughter that I take care of. I am able to send her to a good school. I’m able to take care of her on my own.”
There’s good reason to believe these waitresses.
With the employees okay, restaurant management provided us a copy of the wait staff paycheck stubs for a week in June. Servers who worked at least 35 hours that week made from $740-$880 in tips alone.
And it’s these well-paying jobs that could be in jeopardy.
KEEP THE WAITRESSES?...OR THE $20 BURGER?
Fratto-Florez pauses for a moment, blinks her eyes to fight back tears and then said, “These are real people’s lives that we’re talking about her, um, and I don’t want to sacrifice one of them.”
But she says if Governor Cuomo eliminates the subminimum wage, it comes down to math.
“We go to the $20 burger and we keep things the same or we go to counter service and eliminate these jobs,” Fratto-Florez said.
Counter service is what you get when you walk into a fast food restaurant. It’s where customers place orders, pay, get their food and sit down to eat. No waitresses.
Fratto-Florez said adding almost $3 to the hourly wage of her wait staff would erase the restaurant’s weekly profits. She predicts boosting prices would drive away customers.
If forced to choose, it seems her mind is made up.
“I cannot risk changing our pricing model that has worked exceptionally well for ten years,” Fratto-Florez said.
So, waitresses would have to go. Most of them anyway.
THE GOVERNOR’S DECISION?
Even though it’s a decision that would affect tens of thousands of businesses across the state, Governor Cuomo does not seem to be in a hurry to make a call on the state’s subminimum wage. His office referred us to the Labor Department. A spokeswoman for the department said they were still compiling public comment.