- Hi, I'm Kirk Swenson here at Ideas Fest in Asheville, North Carolina.

In this program, our panel discusses challenges and opportunities for creating career pathways in the service industry.

- [Narrator] Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBS NC.

[upbeat music] - Federal minimum wage $7.25 since 2009.

For tipped workers, that minimum wage is $2.13.

Guess when the last time was it that changed.

Any guesses?

[indistinct] Woo, '91 has not changed from $2.13.

So very different, but another number that is important to know the living wage as established by a local organization here is $22.10 in Asheville as of 2024.

Living wage is important.

I would like to talk about that more later, but I wanted to start with those three things in mind and ask you, Betty, I'm gonna start off with you.

With minimum wage and living wage in mind, tell us what a good job is and the difference.

- Ah, that's a very good question.

So a good job is a job that pays a living wage.

Where people are respected for the work that they do, they have a sense of ownership of it.

Where people have an opportunity to participate in health insurance and get their needs met.

And also a good job is one that allows for some advancement where someone can consider long-term, you know, considerate it long-term work.

Some of the work that I do is involved in kind of identifying entrepreneurs who create good jobs.

So that's part of the question that you're asking me about.

So in terms of wages, you know, do you want me to go into a little bit about those different numbers that you quoted?

- [] Sure.

- In terms of what they are.

- [] Mm-hm.

- So there's a living wage, which is deter has been determined by, lots of research organizations come out with this living wage calculator.

And they basically say, you know, what do you need to live, you know, comfortably with the basics in any particular city?

So in Asheville it's twenty what?

- 22.10.

- 22.10.

Then there's this minimum wage, and the federal minimum wage currently is $7.25.

Most states have increased that minimum wage, and some municipalities also have their own minimum wage that's much higher to take into account what it costs to live there.

In seven states in the United States, there is no subminimum wage.

So that $2.13 doesn't apply in seven states: California, Oregon, Washington, Alaska, Minnesota, Montana, and Oregon, I think I said.

But, anyway, so seven states, primarily Western states, they've never had a subminimum wage.

So what a subminimum wage is, it's a percentage of the full minimum wage that's given to tipped workers, people who work for tips, with the assumption that their tips will cover the delta between the full minimum wage and the subminimum wage.

And what we've seen is that is increasingly going down.

So what we're seeing is that in some places, the subminimum wage is not tied to the full minimum wage.

So the full minimum wage is increasing while the subminimum wage is staying low.

And as a result, the customer is actually covering the delta with the tip.

So when you're paying a tip in these restaurants in 43 states, you're not actually paying a tip, you're paying a wage.

So this is part of the work that we're doing at One Fair Wage to pass legislation to make it possible so that restaurants will continue to pay a full living wage, which actually has this incredible effect, you know, reducing the poverty rate of people who work in the restaurant industry, which is really quite high, reducing rates of sexual harassment.

Because we've seen that in the states with no subminimum wage, those states have less incidences of sexual harassment in the food industry.

And then, you know, we're able to really take care of our people a lot better.

And that's what that's about.

- I love the added safety that comes with the higher wage like that.

I did not know that connection before we talked, and I'm really glad to know about that.

It's also part of our thinking at our brewery and living wage is that sometimes a small business has to decide between offering a living wage for that first lowest job and thinking about compression of wages and rewarding the higher positions that are also at the company.

Dean or Katie, do you wanna jump in on how you think about that compression, living wage in general?

- I mean, it might be better for me to start because I feel like Katie is doing things that are sort of beyond what a lot of restaurants are doing, and we're kind of more, we started off kind of, you know, a business opening up and really looking at projections of what we might sell in the location that we're in, and really trying to make sense of, you know, the amount of money that kind of we can afford for labor.

So we kind of look at this projection, and then we sort of kind of fill in, you know, basically, a restaurant that sells a million dollars of food in a year, food and beverage, can kind of think of having, you know, $333,000 for labor on, you know, very basic terms.

And so, you know, all of the restaurants that I've come from, and I know sort of the research that I've done in switching sort of the tipped, you know, portions of pay and trying to change that in a way that's significant has been, you know, challenging for a lot of people.

And in our sense, you know, we kind of really want to improve as we go, and continue to grow as we have our business around.

And so, you know, we're really working in that standard model.

We did know it was important to create a place that is paying as much as we can.

We also try to have, you know, balance and talking with our staff to really understand kind of what their goals are in terms of working full-time, working part-time, day versus night.

We have set our minimum wage at a restaurant at 15 an hour.

And, you know, aside from those things, we try to figure out other aspects of work that will create sort of a culture that will be positive.

And, you know, part of that really for us is listening to the staff and being able to have, you know, communication open.

And we've created some avenues for communication to come in anonymous ways through, you know, certain ways.

But really I think it's about growing and really trying to, you know, there is a tip, the tips portion of how, you know, servers make money can be problematic in certain ways.

And we also have to address issues with that.

There are times where, you know, I would say 99.9% of our guests are that come in are super respectful and wonderful and, you know, we leave with a really positive interaction.

There are times though, however, where, you know, there is kind of a power dynamic that comes into play with the situation of tipping, and it can be very challenging.

- Yeah, we talked about that on our call, and, Katie, you spoke so well about that.

Would you continue?

- Yeah, you know, I think that the restaurant industry, it's like everybody, it's the restaurant industry, guests, and even some employees are like deeply married to the system of tipping and how it is currently structured.

The existence of the subminimum wage pay is because of that deep connection between those things.

And what I have seen and what we were seeing, there's like two problems that can arise in restaurants with the subminimum wage pay model.

If you're paying 2.13 an hour, that's going to traditionally tipped workers, which are like servers and bartenders.

And if you pay that rate, then all tips coming in the restaurant are restricted to going to only servers and bartenders, those specific employees.

And in, you know, some restaurants that are lower in volume or at price point, you know, the problem that it can create is, for example, a tiny, you know, I don't know, one of the problems that it can create is that if a worker is not able to make up the amount of tips up to the 7.25 an hour, which is our state's minimum wage, there's really no, like, it's really hard to have recourse or visibility into that.

And, therefore, yes, it is illegal that particular establishment isn't paying their workers that hourly rate, hitting their minimum wage.

It's really hard for the government to intervene, for there to be repercussions.

And the worker is the one who suffers.

On the other end of the extreme, which was the case in our restaurant years ago before we changed our model, what it does, because we are fortunate to be popular and successful, our price point is a little bit higher because of everything, the quality and the amount of employees that we employ, and that's why it's set that way.

The experience is like casual, fine-dining kind of level.

We were seeing that with all of the tips going only to our servers and bartenders, they were making substantially more money than anyone else in our restaurant, okay, than the cooks, dishwashers, hosts like the people who also equally are contributing to the experience.

I mean, nothing at Curate or La Bodega is created without, you know, the last glass getting polished or the shrimp getting peeled in the prep kitchen.

And so, for us, when the pandemic happened, and we closed down our restaurants, we realized that we could change the model and we followed one of RAISE: Q&A models, which basically we had to commit to paying above federal or the state minimum wage to all hourly workers.

And then we could tip share across all of our workers, which is a model that we began doing.

It's very challenging.

When we first rolled it out, I will be honest, we lost 80 to 90% of our front of house staff.

And it's, you know, of course, we have rebuilt, we've built like a culture and like built things back.

It's a hard change though.

And I say that to speak to how difficult it is for a restaurant to make a change in their wage structure because the idea of, you know, upsetting the employee base is really challenging.

And then there was some education on our guest side as well, not understanding, "Wait, so my tip doesn't just go to you.

It's getting spread?"

and feeling like that's unfair when it's actually creating higher wages across the board and better equity.

- Katie, I have a question.

When you transitioned to that model, and there was kind of pushback from the servers, was that based on what they saw, or what they perceived to be this change?

In other words, one of the narratives we hear, specifically from the National Restaurant Association who does these surveys of restaurant workers, they say that restaurant workers don't want to be paid the full minimum wage with tips on top.

Well, what they don't get is that we're not talking about just the minimum wage.

We're talking about tips on top of that, that gets shared.

And I think that a lot of servers kind of think, "Oh, if you pay me the full minimum wage, my tips will go away."

They somehow have this perception that magically tips will kind of go down, but they don't because people don't tip based on what they think you're making in an hourly wage.

They tip based on service and food and also some certain, you know, personal bias as well.

So tell me, how did that work out?

- Yeah, I do think most of it is perception, and we did layer in like just on the hiring, like an explanation that we would just to make people feel a little bit better about this change both in the front and back of house that we would commit to them earning a living wage, you know, per hour at a base, at a minimum with their pay and tips like, you know, combined together, which, of course, is what we continue to do, but it's complicated.

I think tipping is complicated.

I honestly wish it would go away.

There's lots of reasons why that's a really hard thing to change.

- I think it also is about like resetting the culture just a little bit.

I think so many front of the house servers are so used to this idea of like, "This is my section, this is my work, and I should be getting paid and compensated for what I am specifically doing."

And it sort of goes against sort of this idea of restaurants, really, the best restaurants function as one.

And there's this, you know, if you can create a culture where the front and the back of the house, you know, they get along and everyone, the servers are working together for the same purpose in all sections.

And it really it's just so much more positive environment to be in.

And those restaurants really shine because people notice that's happening, and it's part of the experience.

I think that really makes it wonderful.

And it can be a challenge, and I think there's so many people who are in the hospitality front of the house that are just set on this is the way it has been and, you know, so it takes a lot of figuring it out, really figuring out answers to all the questions and being able to present it in a way that's gonna make it a positive part of the culture.

- Yeah, it's one company and at Highland, I think that we have even a more diverse company because we have the manufacturing side and the hospitality side.

We don't really have a back of the house on the hospitality side as much, but they can feel very separate.

And I'm constantly trying to have us feel like one company trying to do good things together and sort of row in the same direction.

But it is really challenging, and I'm sure we could take cues from what you guys have done.

I was thinking about tipping too, and, I mean, do any of you have tip fatigue?

- [Audience] Yes.

- I think I was asked at the dry cleaner to tip last week.

And, you know, it's just really interesting I think post Covid phenomenon that has happened.

And there's also value, I did not think of it as a power struggle, but not power struggle.

That's not a good, power dynamic is a better word.

And so having that in my thinking is helpful because I only had in my mind my experience of enjoying the connection with a server and giving a great tip is this thing you joyfully do when you have that great connection.

But we're talking mostly about good businesses, we're trying to be good employers.

We have generally good people coming to our businesses, and there are entire segments of the population that don't have that good experience, that just don't have that kind of positive feedback loop.

So helping everyone be in a good place, I think is what you are going for, Betty, right?

- Yeah, and it's about making sure that the server has the experience that no matter what happens in any given day, they will be making their wage.

And the tip is a tip and it is a reward for good service.

And, you know, I do believe that over time this tip fatigue will end up making people less interested in tipping.

And although tipping in full service restaurants, 97% of people surveyed, and that comes from the Pew Research Center, say, basically, that they tip at full service restaurants no matter what.

And I don't necessarily think that will change, but they might feel funny about tipping at 20%.

They might, you know?

And they don't like service charges, people don't like service charges because they like to have that control over that little piece, right?

Oh, sorry, I don't know, you know, what's gonna eventually happen with that.

- And I think you said that in California service charges are no longer legal, is that correct?

- Well, they're starting to legislate about that.

I don't know so much about it, but it is problematic because I think they can put them on, but they have to kind of be very specific about who the service charge is going to.

A lot of restaurants, you know, that transition to one fair wage, the full minimum wage, will put on a service charge as a way of subsidizing that wage and making it possible.

But that actually isn't a tip.

That actually isn't acting the same way as a tip either.

So that's also problematic.

And then the 20% is considered revenue, which the owner can do whatever they want with it technically.

And then it also goes into the calculation of taxes and workers' compensation.

So the service charge isn't necessarily the best answer to the question.

- Right, what would happen if we got rid of tipping?

Like, could your businesses survive that way?

- I mean, I think that that question is like for all of our customers, right?

The biggest fear and reason behind not eliminating tipping in an establishment is that customers will not like it because in a restaurant like Curate, because it's full service, there is still a customer mentality of wanting to give the dollar amount equivalent to the experience that they had.

And the truth is, is like the best power that the customer has is whether or not they come back, and not how much they are withholding from a particular individual, you know, for the service.

And the other thing is that in order to eliminate tipping in our establishment, we would have to raise prices 20% at least, right?

Because those dollars are going to pay our workers, and that is something else that is a big fear.

Can the market support a check average that is 20% greater than it currently is and being the first one in a market to do that, that's why it doesn't change, right?

Because it's like so scary all of a sudden you could lose everything.

- I won't be the first to do it.

- This is what I'm saying.

[laughing] - I wanna talk about something encouraging for a minute because what I heard all of us say, right, at the beginning is that we're thinking about, and these are my words that I use at our company, sort of whole person health.

So their financial health is what we talked about, also their emotional health, their physical health.

So there are ways that we are thinking about as employers and as organizers to do that.

Would you like to talk about that a little bit?

How you go about it?

- So, you know, for us, we are a restaurant currently that has 33 employees.

When we get to the 50 employee level, we will then be, I guess, assisted in getting the insurance.

Right now, we put people in touch with a rep who gets them, you know, the marketplace insurance.

And so we have a person for that.

We also have dental and vision insurance.

It's tough to kind of, you know, provide benefits beyond being as small as we are.

So, you know, we have some plans to get a couple of new businesses going, and once we do that, that will all change.

But aside from that, you know, we really value feedback anonymously or, you know, it could also be in any form is something we really value.

We also work with a lot of organizations like the Giving Kitchen and, you know, there's the Southern Smoke Foundation and Ben's Friends that provide sort of resources that are for people who are in need, who are in the restaurant industry, who maybe don't have, you know, a ton of support or don't know where to go for mental health issues or other things.

So really trying to get that as part of the culture.

And I talk about listening a lot because I feel like when you're establishing a culture of a restaurant, it can be everything to your business and to the people that work there, but, you know, people ask me sometimes what our culture is and I feel like I, I can't really speak to what the culture is.

We can only kind of listen and sort of try to create based on the feedback that we get.

We can have an intention for that, but it's really up to the people who are working with us to truly tell us what the culture is.

And so it's about kind of each day trying to learn and to take all of the information that we have, all of the mistakes that we've made and trying to kind of make things better as we go.

In the restaurant industry, I think we will go insane if we don't have an agenda and a mission of getting better because there are days that can be grueling, and, you know, it can be very painful at times, but the way to kind of move through those moments of, you know, utter disaster that we experience from time to time in restaurants is to really like, you know, put everything out there and say, "What can we do to make sure that doesn't happen again?"

And part of that is daily sort of working to learn better ways to create that good culture in our restaurant.

- I think that one of the things you did that's beyond your restaurant even is to raise money for the food bank.

And I don't know if your hat is that organization, but you raised $15,000 recently.

Would you talk more about that?

- Yeah, so, you know, we opened up Seabird, and I think that a lot of times people, a few times that we've opened restaurants, the second one, people will come to us and say, you know, "What is the concept?"

And I think more often than not, I just kind of say, "It's gonna be a community restaurant," and that confuses people.

And then when you're trying to explain what that is exactly before the restaurant is open, it's confusing for myself to even answer.

But I think, you know, in looking at Seabird and kind of seeing where we've started and where we are now, I think we're a restaurant and an organization that functions in the community and is kind of, you know, made whole by the relationships that we have from our crew, from our farmers, from, you know, non-profits that are in our community that we care about and we wanna support.

And so that's kind of what, the restaurant kind of takes on a life of its own and it's about the relationships of the people and the organization that interact with our restaurant.

And so for the James Beard Awards this year, we held a watch party at the restaurant that was basically a fundraiser for our local food bank Of Central and Eastern North Carolina.

We charged a flat rate for tickets, and then all of the money went to the food bank.

And so I think also adding to that aspect of culture, it's showing, you know, our crew and our guests as well that like we can all kind of work together and do things that feel good.

And I think sometimes, you know, as selfish as it can sound, raising money for the food bank in your community and doing something in your community and volunteering can feel good, you know, to be a part of that.

So that was one little thing that we did.

- I'm getting, I mean, it's clear that you're sharing values with your entire team and compensation is not just in money, it can be in emotional support, it can be in community building, and all of these other great things.

Another thing I love that you said is that your benefits, you kind of apologize for being a small business and offering great benefits that a lot of restaurants don't offer at all.

And you have health insurance and you have dental, and one of the things I've noticed at Highland too is that our benefits have grown as the business grows.

So cheers to good business.

That is a great, great thing.

- Exactly.

- It's great benefit.

- So now on a more delicate subject, I want to go back to living wage.

There are pieces of that, that I think are important to sort of dissect.

One of the things that I've learned about living wage is that it is an important sort of reference point to have.

Also, the calculation of it I find very interesting, and it has changed in recent years, at least in Asheville.

So I'd love to kind of break that up.

What I have hesitation about is that living wage takes into account the average price of a single room apartment, so for one person to live, and that's the most expensive living situation with what is called like the least amount of money that should be paid.

So that's a tough thing to equate for me.

And, Katie, we touched on that a little bit, and I wondered if you could add anything too.

- Yeah, I'd be happy to.

Thinking about what Dean just said, like when we first started, when we first opened Curate, we didn't offer the benefits that we offer now.

I'm coming from the future, Dean, 13 years later, and it takes time, right?

Because it takes time for restaurants to establish their client base and to get their feet under them, particularly independent restaurants that don't have that support.

It's all brand new.

It's like just takes time for the whole wheel to function, and then to be able to layer on these benefits.

But one of the things that we are all striving to do is to offer good jobs.

And a good job is not just the base pay.

We need to support the whole person.

We want to create careers, we want people in the hospitality industry to be able to move up.

We want them to have health insurance and, you know, all of these things that we now offer like health insurance and paid time off and sick pay and also a matched 401k because retirement out of the restaurant industry is equally important.

And we have over the years developed this amazing benefits package to be able to support the whole person.

The challenge that I see with the local, you know, just economics living wage calculation is the lack of taking those things into consideration for what the full wage that a business is offering.

So it's just being calculated based on a flat hourly dollars per hour rate.

And so there's no way to see, you know, which businesses and things are also creating pathways for growth.

And it's complicated.

Like, I'm not saying that, you know, if you're managing that organization that this is an easy ask.

I think it's very complicated, but I think that that one number can be challenging because it's hard to balance all of the benefits of the whole person.

There are real dollars behind offering those things that then contribute to the person's health, happiness, future.

It makes it easier to live in our community.

- Yes, it is not easy, and I would love to find the intersection of a living wage and a good job and a good employer.

Those things should marry up.

That would feel really good.

You mentioned career advancement, and that's a great topic because at any business, not just small business, it is so tempting, we've done it, you have a team of people doing a job, you need a leader, you hire the best one at that job to lead the team.

How often does that work?

- Nope.

- Half the time?

It's definitely not 100 in our experience.

So at your companies, how do you address career advancement, and do you also address moving out to move up?

- That's a good question.

- That is a good question.

Yes, I mean, I think, you know, some of the things that we have done, first of all, implemented some clearer training.

Like, if you are a line cook and you start learning more than one station, you get pay that increases based on your knowledge base.

And this was something that took us time to develop, and we offer similar training programs on the front of the house because the better educated you are, the better job that you are doing.

And then also we love to promote from within.

Like, I think because the best thing about promoting within is protecting culture, right?

You've already seen that individual mesh and excel in your culture.

The number of times that I've hired a wonderful, you know, a qualified person who then came in and it was a culture just clash.

Like, that is problematic, right?

So, you know, I'm very proud that, you know, a person who started as a bartender with us is now our restaurant operations manager, a woman who started as a host is our lead manager for the front of the house at Curate, somebody who started as a server is our wine director.

Like, you know, that just feels so great because we're creating those opportunities for growth but it takes time.

- I think what's what you're pointing to too is that the restaurant industry is notoriously an industry that has extremely high turnover for a variety of reasons, because, you know, sometimes it's because the people who work in the industry really do want some flexibility and so they tend to go and leave.

But, in general, restaurant owners don't often want to invest that kind of time and training in their employees because they are afraid of them leaving, which is a vicious cycle, right?

If you're not gonna be training someone, they're gonna leave.

And, you know, if you think they're gonna leave then it's just gonna perpetuate.

And I think what you're speaking to specifically Katie is the training and the attention, I don't think I've ever worked in a restaurant, even my own restaurant, where we actually had a process in place that showed people like where they could improve.

Like, if you do this, we'll, you know, bump you up, and if you get here, we'll bump you up.

And these are things that exist in other professions, but they don't really exist in the restaurant generally.

And what would it look like if we could actually take the time to implement that?

And that's very much part of culture as well.

What we're talking about is, you know, if you really value keeping people and training people, you know, the restaurant industry is where a lot of young people start their careers.

They don't start careers in it, but they start working.

This is where they get their first job.

And if we can actually create an environment in which folks feel, you know, valued, they see there's something to be learned, there's training there.

What does it mean to make a good wage?

How is it to be treated fairly without sexual harassment?

Because from my very first job, that was my experience.

We're really giving young people a really good lesson to learn how to work.

And the restaurant industry is a perfect, you know, place for that if it's done well.

- I think it's hard.

I think we need to give restaurants, particularly starting independent restaurants, Dean, like I remember those beginning years and you just like cannot keep your head above water, you know?

So giving them a blueprint for training programs for starting restaurants would be really helpful.

I mean, the only reason we have one is because as I said, I'm like 13 years in the future, and we've had the time over time to promote and put the resources in to be able to do that.

But in the beginning, you're just like barely making ends meet and getting day in, day out.

And that I think that's a challenge.

- Yeah, and that's another obstacle to being able to develop these things.

That's why people should hire people like me, you know, to do your HR work, right, exactly, you know?

- One thing I will add that we recently added, which I think has been really helpful, that speaks to your point about letting the employees go and then is we created this thing where if somebody leaves and then they come back within 13 weeks of leaving, so they go out because they want to try something new, but then they realize that it's also not what they thought it was going to be, that they get to come back at the same status of like PTO and things like that as when they were, so that we don't start them back at zero, because, you know, there is that feeling like the grass is greener out there, maybe there's a better opportunity and we want people to go out and like find it, and then come back.

And sometimes they leave and they don't come back.

That happens often as well.

And, you know, that's part of business.

- I feel like also the intention of wanting to do something that's gonna further, you know, education or, you know, experience as far as your staff goes always pays off even if they leave and they go somewhere else.

The culture has been created and people know your intentions.

And so I think that can be really valuable in making, you know, your business a place that is desirable to work in.

And I think that, you know, we've gone through, when we first opened, we had a manager bonus situation, where it was like we broke everybody's category, you know, and looked at the numbers and gave bonuses for that first year and a half.

And, again, we're new, we're getting this thing up and running.

This is Lydia and I's first business that we've ever had to undertake all on our own.

And so we thought this would be something that would, you know, really retain great employees and all of these things.

And about a year and a half in we were like, well, maybe it would make more sense if we, you know, it didn't seem like people really noticed it, or cared as much about it, but people were asking about benefits.

And so we looked into it and we were like, well, these are some benefits.

We kind of proposed it to everybody and we talk about it.

And so the vision and dental thing we're like, would that be more valuable if we could give that to everybody?

So, like, we'll probably revisit that again.

I'm currently working with a business coach because I'm, like, I come from a background of cooking and so getting into this, you know, like, I've been a lifelong cook and getting into, you know, this area, it's like, you know, realizing that we need resources and we need help to kind of, you know, find the best ways to retain and to create these places that feel good to work and, you know, and pay as much as we can.

- That's so smart, so good.

I just was noticing our brewery, so in packaging brewing, they've done a really great job of setting different levels.

Here's how you get to the next level and your brewer two, three, and you get a bump in pay every time that happens.

Packaging is the same, so there's four levels in packaging.

And it's a great thing for advancement.

It's also causes tension with a living wage.

If you're paying a higher living wage, you might not be able to have those steps and have that clarity and have the advancement and the steps that really are like these tangible things that don't take forever to reach, and that could be done at a smaller company.

So it's good to think about those two things together, because they don't marry up perfectly.

- And I had just like a thought about, you know, a lot of some of these challenges come from the fact that the hospitality industry, in general, is known to have low profit margins, right?

That's just like part of it.

It's hard, right?

It's hard to make enough dollars, but the reason that it's hard is because the cost of goods and the cost of labor is higher than any other industry I wanna say.

I mean, don't quote me exactly if that is true, but that would be my guess, you know?

- And it's higher than ever.

- Yes, and it's higher than it ever has been in the past.

And it only keeps going up, and it will only forever continue going up.

But the truth is, is that means that the vast majority of dollars, if we're talking about restaurants having a 3% to 6%, I think average is like 3 to 10 or something like that, profit margin on the bottom line.

That means 90 to 97% of every single dollar that comes into a hospitality business goes straight back out into the community.

It's going to the workers, which make up 35% at least of that whole math equation.

All of the cost of goods, the local farmers that we support with the other 33% and then all the other supplies and things that we buy in the community.

So if you think about, one of the arguments that I really struggle with is the idea that restaurant jobs are not good jobs or that restaurants are not good employers, but they are the backbone of our community here.

I mean, the economic drivers that are coming out of each and every restaurant, brewery, hospitality industry job in this community is enormous.

And we need to like start to understand that and work together to support the workers and those businesses so that we can continue to thrive.

- Amen.

- I would just also like to say that Katie and Felix have, just in the time that we've known them, y'all are so willing to like share information and your experience and like where like in the kind of just in the name of, you know, lifting other independent restaurants, and I think everyone in the restaurant community really appreciates that about you guys.

- Thank you.

- So thank you.

- Yes, much appreciated.

[audience applauds] - Quick personal side note, Lydia worked with us, Dean's wife, running our pastry program at Night Valve.

Those of you who remember that place.

And, of course, they went on to do far great, incredible things on their own.

And we were happy that she came, spent some time, and then left to do greater things with you, Dean.

- She didn't come back in less than 13 weeks.

- No, she didn't, she didn't.

She didn't, and good on her, so.

- I have already cut the Q&A time a little bit short, but I will wrap up by saying you all are so accomplished and amazing.

I also pulled out that I think all of us have worked with our spouses or do currently.

Is that correct?

- Yes.

- So join us next year for an all day session on how to work with spouse.

And now we're gonna have 10 minutes of Q&A, and I'll start on my right.

- So I worked, I'm an orthopedic surgeon now, but I worked waitressing, I've worked cooking, I've worked all aspects of restaurants pretty much except for ordering.

I could never do that.

But growing up, to me, that wasn't a career path.

I never looked at it as a way to get a full living wage.

I had roommates, I was not looking to support a family with a job.

You and Felix came up in Europe in the restaurants where the wait staff culture is very different.

It's a career, it's more like it is in New York.

But in smaller towns, smaller places, that was a job that high schoolers or college students or, you know, multi-income families had.

So how is that shifting now because now you're looking to support this.

You know, people are looking to support families or they're looking at this as a career where the cultural mores I don't think have changed or the cultural perceptions around restaurant jobs have not kept up with that.

- I mean, I think that change starts with each of our employees who works with us and them seeing like what we're doing, what we're trying to create.

I think it's more than just the benefits and the other things.

It's also scheduling flexibility and other things.

There are some inherent challenges to raising families and the restaurant industry that clash a bit, that are hard to solve, but as much as we possibly can, I think we are like taking steps in that direction and seeing our employees, they're the first ones who are starting to like see it and staying with us longer and seeing their opportunities to move up.

And that feels really wonderful.

- I also think it's okay to have, you know, if it is sort of a temporary thing for some people, it provides that and, you know, I think it's also restaurants are, you know, they're just so important in our communities and without them things would just not be as as nice.

- Yeah, they would not.

- I wanna say hello to chef.

- How you doing?

- I'm from Wilmington too.

So I was wondering if you ever given any thought to like a structured wage system in a restaurant business because I'm thinking of the lowest of the low in the restaurant, the guy at the dishwasher.

My sister-in-law was a general manager at a restaurant and successful restaurant in Wilmington.

And that was her constant complaint.

She couldn't find or keep dishwashers because it's hard work.

And I remember once she couldn't find somebody and I said, well, I don't why I said this, but "I'll help you, you know, for the next few days."

So I worked as a dishwasher in a restaurant, and there's no air conditioning, there's nothing.

And I was the lowest paid guy.

I didn't even really expect to get paid.

But the question is the structured wage thing, all right?

But the idea that, you know, everybody else was gone, basically, and I'm still washing pots and pans and everything else.

I'm wondering, you know, even with your good wage thing, everybody gets paid 15, the waitresses and whatever still get tips and everything else, but the dishwasher is back there still working.

And I just wonder, that was my question, the structured wage.

- Makes like $30 an hour, ma'am.

I mean, dishwashers are now making more than most cooks in some instances, because it's an extremely hard job, and it is the heart of the kitchen, and it's really important to have a good dishwasher, someone who shows up all the time, and it's hard work.

And so specifically since this pandemic, you see dishwashers making upwards of 20, $25 an hour.

I don't know if that's true.

- Our nighttime dishwashers start at 20 an hour, and part of the reason is because it's a shorter shift.

They come in a little bit later than cooks, so there's less opportunity to make that.

And, you know, the other part is because the work is so hard.

But also I think that, you know, the other side too is, like, I personally would rather be back their washing dishes than waiting tables, I would say.

And I've done both jobs, but there's something that is very calming about the dish pit to me.

[audience chuckles] - And so many people start there, you know, it's important.

- There's a personality difference.

I mean, even speaking among like hospitality workers and brewers at Highland, there's a personality difference.

If you have a a department celebration with each of those, they're very, very different.

- You know, you were speaking specifically about a wage structure, and that is, really, I think, when we're talking about good jobs, it's really important that people know when they're working how much money they're gonna be making.

And so that is really key to creating better restaurant jobs, is actually putting, you know, structures in place around how much money you're gonna be making and where it's going, you know, how it's going up.

It's also a really good way for restaurant owners to be more secure in their labor costs and know how much things are gonna cost them.

And it also, and my feeling is once you pay everyone at least the full minimum wage, you don't run the risks and liabilities of paying them less.

So if you're not making the delta, if you're not paying that person who didn't make their full wage in a given hour, if you're not paying them that full wage, you run the risk of of being sued and wage theft.

And in the Department of Labor, you know, a huge percentage of the labor claims are wage theft claims.

And it's a problem, it's a real problem.

- We've got a couple minutes left.

What was your question?

- My question relates actually to that structure.

I was wondering how housing plays a role in being either a barrier or something that you may consider offering in the future.

I know there are employee housing programs that provide either a stipend or a portion of that structure that could be tax free as an offering.

I wanted to know if that was something you've ever considered.

- I mean, definitely I think, you know, first of all, the just economics living wage calculation is strictly based on housing prices in the community.

And so we're all seeing that go up, and that is a challenge that we, I think it's hard on the individual independent restaurant operator.

I think that's wonderful.

I would love to look more into the tax benefits of supporting with housing stipends and if that's something we could do.

But I do think like that is something we need all of your support in.

Like, I think this is something the whole community needs to wrap their arms around, and I think the important thing is we're talking about workforce housing, you know, which, like, I think there's a couple different levels.

There's that like affordable, the lower levels, which are our employees because of the wages that they make are in this like middle place, right?

They're not in the low, so they're in this like middle gap of workforce housing.

That would be wonderful for us to kind of figure out as a community.

- Yeah, and I think my limited knowledge of workforce housing makes things like, you know, when there was a mill in a town and it was the only thing in town and people came from miles, it was the only employer, huge employer, and then they had workforce housing.

So on that smaller scale, we thought about it too and just ran into such complexities and responsibilities, legal responsibilities that it becomes terrifying really quickly, just like childcare.

We've looked at that, that became terrifying so quickly, even though it's such a great need.

- And it bumps up against the other pieces, it bumps up against also a lot of issues in the community where, I mean, workforce housing requires high density housing, right?

High density housing is not a problem, it's part of growth.

It's part of what we need in order.

And I think sometimes it's like not in my neighborhood, you know, it's just challenging.

There's a lot of building and construction that's getting blocked that actually would be beneficial to lower the average housing rate in the community if we have more supply, right?

I mean, that's how the capitalism model works, right?

So more supply and it comes down, but we've gotta get behind building in order to support it.

- Yes, your question please.

- Yes, I was living in New York before coming to Asheville and quite a long time before Covid, Danny Meyer, who's one of the best restaurateurs in New York, stopped tipping in all of his restaurants.

There was a huge controversy about that.

I am no longer live in New York.

And I don't know whether they disbanded that or not.

There was a lot of push for them to not do that because, of course, the prices went up.

Do you have any idea what happened to that experiment?

- Some of it they did shift their model slightly due to customer pushback on not having the power of the tip.

It honestly was a storyline that made us nervous about eliminating tipping.

So we're not quite there.

And I do think the issue, subminimum wage pay is definitely a thing that exists in our community and in the whole country.

I struggle with this because it's continued existence is going to retain the tipping structure as it currently is, you know, so it's hard, right, which goes first.

We'll see, it's challenging.

- Yeah.

- Hi, I'm Tanya with National Institute for Racial Equity.

I saw that this is dignity and egguity, equity for service workers.

Food, you make me think of eggs.

So my question is, what are you doing in your restaurants to... Equity means removing barriers, right?

So we remove barriers to equity.

I see and I hear that you're removing the barriers to fair wages by opening up the idea of tipping and all of that stuff.

But what I wanna know is what are you doing to reduce the barriers for access for all people to work in your restaurant and not just have the people of color work in the back of the house and bringing people of color to the front of the house, your hiring practices around that.

And also with... thank you, yeah.

And also with the continuation of what that looks like in the future for your restaurants.

So, thank you very much.

- Well, I just wanna put this in, and one of the things that we do at RAISE: High Road Restaurants is we've developed a toolkit, a specific toolkit, it's called the Race and Gender Equity Toolkit.

It's designed specifically for restaurant owners who are working towards a more racial and gender equity, you know, platform.

It's specifically aimed at what are your practices that you are currently doing, which weed out and create any sense of exclusion and create a more inclusive environment.

So it might involve really looking at your hiring practices, taking a very close look at your job postings, where you're posting them, how you're posting them, and all of that.

And then we also encourage, we also show restaurant owners how to create an equity action program.

So that's part of my work is to actually lead people through that and make sure that there are specific, I mean, one of the key I things is to make sure that in the hiring process, you're bringing in the voices of everyone in your restaurant community so that everyone has a voice and is able to actually address, you know, speak to this person who you're hiring so that you actually continue to create that race and gender equity aspect of your business.

So, you know, that's a key part of what we do.

We offer that for free to any restaurant owner who wants to go on our website and register for that training.

It's a very essential piece of what we do because One Fair Wage, the subminimum wage affects people of color, women, immigrants, formerly incarcerated more than anyone else.

And so that is the cornerstone, the underlying important piece of what we do at High Road Restaurants.

- Thank you for asking.

- Thank you, Betty.

And I would add to that aspirational representation on a website is one way to help.

It does not solve issues, but it definitely helps.

And I was guided by friends and professionals to have aspirational images on our website of a more inclusive customer base and staff images as well.

So that has been helpful.

And to add to yours, Betty, subminimum wage, as I understand disproportionately affects women and people of color.

So by working on that issue, then we are helping equity.

- Right, then you're really supporting to make a more equitable society.

I mean, I think that's what we are all talking about here is we're really interested in making a more equitable restaurant industry and by paying fair wages and making sure that there is equity between those folks who work in the kitchen and those folks who work in the front is really an important piece of what we do.

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