Fight for $15 could trigger full-service payroll problems

Only operators of fast food units in New York City that are part of chains having 30 or more units nationwide will be affected by a state Wage Board decision to mandate a $15-per-hour minimum wage for restaurant workers there. But you can bet the “Fight for $15” campaign will target other areas soon. The problem for operators if it succeeds: how much should they then pay the non-minimum wage earners on staff, particularly cooks and chefs who have invested plenty of time and money to acquire their culinary education and may still be saddled with massive student debt.

An eye-opening article in online newsletter Eater helps illustrate what operators could be up against. When the $15-an-hour minimum wage kicks in, restaurant workers who now earn on average $9.75 per hour, or about $20,280 a year if they work a 40-hour week, will make $31,200 per year.

Good for them. But according to figures supplied by Seattle-based salary tracking data firm Payscale, that number could create a disconnect between a restaurant’s best-educated employees and those who have no specific restaurant-related training or background. It’s not an issue in fast food, but could quickly become one in full-service if or when a $15-per-hour minimum wage rate becomes more common in the restaurant industry.

The data shows that right now, a line cook with an associate’s degree in culinary arts makes on average $24,300 per year while one with a bachelor’s degree takes home $25,900. Pastry chefs with an associate’s culinary degree (average wage $30,700) or bachelor’s culinary degree ($32,900) would be in the same wage ballpark as, for example, a newly hired dishwasher earning $15 an hour and working 40 hours per week. Sous chefs ($37,100 for holders of either type of culinary degree) play a pivotal role in the quality of a restaurant’s food, but all their training and experience would net them just an extra $96 a week more than, say, a pantry newcomer who would make a $15 minimum wage.

Something’s gotta give when this situation occurs, and we know the minimum wage won’t be going down. Look for upward wage pressure to follow the implementation of a $15 minimum wage once its effects trickle down to full-service restaurants.

But that’s not the only problem full-service operators might face.

Restaurants currently have a steady supply of highly trained and motivated culinary school grads eager to work key kitchen jobs for relatively modest wages. The question becomes whether the real-world economic payoff for a culinary school education will still make sense in a $15-an-hour minimum wage world. Perhaps this supply will dry up.

The Eater article makes the case that while culinary school is expensive, it doesn’t translate to higher salaries for graduates. Data points show that:

• A year at a top culinary school costs about the same as one spent at a private, four-year nonprofit college. Tuition is three times as much as a public college does.
• Restaurant workers who hold an associate or bachelor’s degree in the culinary arts earn about the same median salary as culinary workers who have only a high school diploma. Even degreed executive chefs make just two to eleven percent more than high-school-only executive chefs

In a $15-an-hour minimum-wage world, salary numbers like these could convince many aspiring chefs to acquire their culinary training on the job instead of going to culinary school. Be sure to read this article as you ponder whether a rise in the number of young chefs who pursue learning in the school of hard knocks will help or hurt the restaurant world’s supply of up-and-coming talent.

Contact Bob Krummert at [email protected]