Brunch at Camino in February 2015. Photo: Emilie Raguso
Camino is one of several East Bay restaurants that has re-formatted its entire wage structure and eliminated tipping in light of the new Oakland minimum wage. Photo: Emilie Raguso
Camino is one of several East Bay restaurants that has re-formatted its entire wage structure and eliminated tipping in light of the new Oakland minimum wage. Photo: Emilie Raguso

On March 2, the city of Oakland raised its minimum wage by 36%. At $12.25 per hour, the new wage is  the highest in the country — for now. San Francisco matched this wage on May 1, and Emeryville will leapfrog both cities in July.

The wage increase was voted into law last November as a part of Measure FF. Over 80% of Oakland residents supported the measure. And while all Oakland businesses are now required to abide by the new wage, conversations about its benefits and repercussions and have been most active in the restaurant industry.

Restaurants have notoriously small operational budget margins, and are, according to Saru Jayaraman, the co-director of Restaurant Opportunity Centers United (ROC-United) and director of the Food Labor Research Center at UC Berkeley, one of the largest employers of low-wage workers in the United States. Jayaraman reports that seven out of the ten lowest paying jobs in the country are restaurant jobs.

Frances with Saru by Pete Rosos
Saru Jayaraman, seen here speaking with Berkeleyside’s Frances Dinkelspiel at Uncharted 2014, says in the long run wage increases in the restaurant field will be better for business. Photo: Pete Rosos

California does, however, have some protections for restaurant workers. Service staff is required to make at least the state minimum wage; they are not permitted to be paid a “tipped minimum” of $2.13 per hour as they are in other states. Still, the state’s minimum wage of $9 per hour doesn’t go very far in the Bay Area’s booming economy. (Indeed, according to MIT’s Living Wage Calculator, the minimum wage needed to support a single adult in Oakland is over $11; one needs to make over double that number to support even a small family.)

“There’s been an ongoing problem in the restaurant industry where many of our employees have trouble paying the bills. It is bad for the industry and bad for the community,” said Jay Porter, the owner of The Half Orange in Fruitvale and upcoming Salsipuedes in North Oakland. “When one of your most significant industries as a whole employs people at a sub-living wage, that’s not good for the community. That’s money that’s not circulating in the economy. It also means that there’s a really high turnover. It means that a lot of people are having to work 70 to 80 hours a week to pay the bills.”

Measure FF was an attempt to change that problem. The measure not only set Oakland’s minimum wage at $12.25 per hour, but it also added mandatory paid sick leave and provided rules for retaliation should employers not follow the new rules. Oakland’s new wage is now also tied to the Consumer Price Index, and it will be allowed to rise each year on January 1.

Restaurant owners have adapted to the wage increase in various ways. Most, like Porter, have simply increased prices to account for the higher labor costs. Other restaurants, such as Homestead, DopoCamino in Oakland, and Comal in Berkeley, have used this wage increase to re-format their entire wage structure. All four have eliminated tipping and have incorporated the average tip amount (around 20% of the total bill) to the line item charge for each dish on their menus. Still others, like Bocanova in Jack London Square, have added a mandatory service charge to their bill.

These adaptations are part of a larger conversation. Last month saw local and national protests for a $15 minimum wage. Measure FF has prompted many restaurants to reconsider tipping and fair pay between employees. Small, non-English speaking food businesses are closing, or considering it. Emeryville is considering an historically large wage bump — from $9 per hour to over $14. And everyone, especially restaurant workers, are reconsidering what, exactly, a fair wage means.

Jay Porter and Katie Mayfield plan to open Salsipuedes in North Oakland later this year. Photo: Courtesy of Jay Porter
Jay Porter and Katie Mayfield own The Half Orange and forthcoming Salsipuedes. Porter has been an advocate for disrupting the traditional tipping systems in restaurants. Photo: courtesy Jay Porter

Increases better for business?

UC Berkeley’s Institute for Research on Labor and Employment (IRLE) prepared a policy brief on the Oakland measure last June. The research suggested that restaurants and retail businesses would likely be most affected by the increase, but restaurants would only need to raise their prices by 2.5%. Authors Michael Reich, Ken Jacobs, Annette Berndardt and Ian Perry suggested that reduced employee turnover costs and improved work performance would make up for increased labor costs.

However, most of the restaurant owners we have spoken to have all raised their prices much more than 2.5%. Chris Hillyard of Farley’s coffee shops in Uptown and in Emeryville raised his prices between 5% and 15%, depending on the item. Sal Bednarz of Actual Café and Victory Burger gave most of his items at 9% bump. Porter’s prices went up around 15%.

“It is clear that the researchers missed some of the important parts of the picture. They talked about a restaurant price increase of 3%. That still may be the average price increase, but for the small restaurants that I’m talking to, none of us can do it for 3%, none of us,” said Bednarz. “A lot of us are doing double digit price increases, much more.”

Hillyard noted labor costs are more complicated than the direct wage cost. “There are also sick days. Plus workers compensation goes up because your payroll costs have gone up,” he said. Indeed, the IRLE report didn’t include the increased costs of paid sick leave. However, Reich noted in an email that Oakland area restaurant prices have been increasing around 2.4% per year, which makes these bumps part of a general trend.

Despite these price increases, most Oakland restaurants are still doing what they do best.

“Our revenue is up a bit, and our customer traffic is close to what it was before we made the changes. We’ve had a lot of customers who have noticed the price increases. Some already understood why went going up, some didn’t,” said Bednarz. “My crew was well equipped to educate them and had good conversations across the counter.”

However, Bednarz did report that his morning coffee business has been a bit slower than usual. “Who knows what that is. It could be something like our customers are driving a different direction to get to work or that schools in the neighborhood have different hours this week. In a few weeks it may come back, but it may not.” Porter and Hillyard also report fairly consistent business.

Jayaraman says that in the long run, the wage increase will be better for business. “The economy is going to do better. I think we’re going to see better restaurants, better service, better food. I think we’re going to see actually faster job growth. That’s what we’ve seen everywhere else every time the wage has gone up,” she said.

Another IRLE overview report on local minimum wage laws said that wage increases do increase the spending power of employees and that they do typically spend that extra money. The authors did note, however, that research still needs to done to estimate the economic stimulus created by this new spending power.

Perhaps just as important as spending power is employee morale. “You’re going to have healthier workers because they have paid sick days. You’re going to have happier workers because they’re better paid. You’re going to have better service. It’s going to be good for everybody,” said Jayaraman.

However, as Bednarz explained, these changes will not happen overnight. His employees received their first increased pay check three weeks after restaurants instated higher prices. “That’s a number of weeks of lag,” he said. “The folks who are coming to a place like mine in the morning are coming up for their morning coffee, and they’re often daily customers. A small increase in what’s they’re paying, that increases five times. It accumulates. I’m not saying that these people don’t care about what we’re doing, but they may not be able to afford to care.”

Victory Burger, Name that nosh, Dec. 11, 2013. Photo: Emilie Raguso
Sandwiches at Victory Burger have gone up in price by around 9% after the wage increase went into effect. Photo: Emilie Raguso

Front of house or back of the house? Unequal pay

Historically, there have been three different wage structures in place in restaurants. Employees in the “back of the house” — cooks, dishwashers, bussers — make a single hourly wage without tips. Those in the “front of the house” — servers and hosts — make an hourly minimum plus tips on their bills. Managers usually get a salary.

Because California doesn’t allow for a tipped minimum, front-of-house workers typically take home far more income than the cooks and dishwashers in the back of the house — even if the back-of-the-house workers are making more than the minimum wage. This means that, even if all employees get a wage increase, the front of house still stands to bring home substantially more income. If prices increase, tips will increase as well, further increasing take-home pay. (Some restaurant owners we spoke to, like Porter, gave everyone a raise, while others, like Bednarz, raised wages only for those making below $12.25, with a few exceptions.)

At a high-end restaurant where diners are tipping 20% on a $100 tab, the profits for servers can be very high. “I understand that for servers in places that they’re still getting tipped, they’re making a killing,” said Tim Veatch, a cook at Camino.

It is a fairly common practice for restaurants to “pool” tips at the end of service and divide up the total among employees. Typically under this system, servers take home a higher proportion of the tip, while back-of-the-house employees get a smaller percentage.

California’s labor code makes this practice a little more complicated. It does allow for tip pooling, but the original legislation says that tips must go to those who are in a “direct line of service.” However, in 2009, the California Supreme Court ruled on several cases that challenged the wording of the legislation. In Etheridge v. Reins International, the court held that all employees in the “chain of service” are eligible to receive a share of tips, which included dishwashers and other members of the kitchen staff. In Budrow v. Dave & Busters, the court expanded that idea to say that the decision regarding who can participate in the tip pool can be “based on a reasonable assessment of the patron’s intentions.” The differences between a “direct line of” and “chain of” service aren’t exactly clear-cut, and the definition of a “reasonable assessment” is open to legal interpretation.

Each restaurant owner that we spoke to said that they try to balance wages between the front and back of the house as best as possible, but have been wary of violating the law. When Hillyard and his wife and co-owner Amy Hillyard opened Farley’s, the pair intentionally gave their cooks the job of delivering food to customers so that they could legally participate in the tip pool. Bednarz says that he has always pooled tips and has suggested raising the tip share between employees, but the final say came down to the employees.

“There’s a legal minefield that we’re trying to maneuver here as we try to do right. And there are lots of ways that we can do wrong,” said Bednarz. “My interest is in making sure that the staff also feels like it is fair. None of the front of house crew, who have to give up a little bit more of what they take in, is unhappy to give a little bit more of it to the kitchen.”

Part of the reason for their willingness, Bednarz added, is because tip amounts have gone up along with prices. “Prices go up, tips go up, a lot more of the crew get to share more deeply in the pool of tips, and effectively everybody gets a raise,” he said.

When California’s state minimum wage rose from $8 per hour to $9 in July 2014, Camino owners Russell Moore and Allison Hopelain made attempts to encourage the service staff to distribute tips. Unlike Bendarz’s employees, they chose not to.

This was around the time that Veatch started working at the restaurant. “Russ and Allison had made a few attempts to allow the service staff to give us larger portions of the tipped money that was coming in, to cut the kitchen in,” he said. “But the law dictates that you, as the manager of a restaurant, are not allowed to distribute a server’s tips. They have to do that for themselves.”

Veatch believes this system to be entirely inequitable. “The real issue is that the money from tips is part of the kitchen’s doing. That imbalance has always always bothered me, as someone who puts the hours in and who puts the passion in. Then there are other people who can walk in, serve your passion and walk out with two times the amount of money that you made in half the time,” he said.

This fact was part of Moore’s impetus for completely re-formatting his pay structure. “I was tired of the semi-legal prospect of trying to get the waiters to tip out more to the back of the house or trying to alter the tip pool,” he said. “We all know it’s sort of a grey area.” As of January 31, Camino no longer accepts tips.

The not-so-simple question of tipping

Russell Moore, co-owner of Camino:     Photo: courtesy Russell Moore
Russell Moore, co-owner of Camino: “Why don’t we just charge people what it costs to eat at our restaurant?” Photo: courtesy Russell Moore
Russell Moore, co-owner of Camino: “Why don’t we just charge people what it costs to eat at our restaurant?” Photo: courtesy Russell Moore

Moore and Hopelain had always wanted to eliminate tips. Before opening Camino, Moore worked at Chez Panisse, where there is a 17% service charge on all bills. He and Hopelain wanted to take this principle one step further and incorporate that charge into the cost of the dishes. But, he said, “we kind of chickened out. We were going to be in this weird stretch of Oakland and back then there weren’t many restaurants opening there.” The pair instead instated a regular tipping system with a tip pool. They kept all front of house employees at the same wage, where they all shared tasks and tips.

However, Moore said, “As minimum wage has been going up, we’ve thought more and more about how we could change it and what we could do.” They entertained the idea of adding a service charge, as at Chez Panisse, but changed their mind once they read the wording of Measure FF. According to the measure, service charges “shall be paid over in their entirety to the Hospitality Workers performing services for the customers.” The measure also stipulates that supervisors and owners could not take in any of the service charges. Moore was concerned that he wouldn’t legally be able to divide a service charge with the back of the house workers.

“It didn’t seem like we could cleanly have a service charge and cleanly decide where all that money goes,” he said. “So we thought, ‘Why don’t we just charge people what it costs to eat at our restaurant?’”

Each of Camino’s menus advertises its tip-less system in bold type. And the dishes themselves are significantly more expensive — more than 20% — than they were before the change. The increased item price goes directly to paying employees’ higher wages.

So far, says Moore, there hasn’t been any backlash from customers.

Host Hannah Rice is often the first person to explain the new system to guests. “I thought people wouldn’t be so accepting. But everyone has been really excited about it,” she said.

Veatch has been in to eat in the restaurant on his days off and he says that his friends find it exciting. “They’re like, ‘Oh there’s no tip!’ There’s confusion as to what you’re supposed to do, but I talk them through it,” he said. “I think everyone has really accepted it as a beneficial form of dining. You just get to sign your check and leave.”

Porter says that models like Camino’s have been met with criticism from labor activists because “they say it removes money from the pockets of servers and that is against the intent of Measure FF.”

However, notes Jayaraman, “The impetus to move more and more towards living wages paid by the employer as opposed to by consumer tips is a good thing.”

Moore admits that he did lose servers over the wage change. “For some of our more experienced servers, this just gave them the impetus to do that other career that they wanted to do, start that business, go back to school, or do something else. They didn’t leave with ill will,” he said. “A couple went to other restaurants to make more money. But everyone gave lots of notice and we had plenty of time and at the end of the day, we have a really great staff, front and back.”

He has tried to combat employee turnover by increasing hours and reformatting the wage structure to encourage employees to work for promotion. Importantly, Moore says that the current wage structure incentivizes his servers to work five days a week, which qualifies them for health insurance.

Servers’ wages are also more predictable, he said. “I’ve always hated that feeling that servers are guns for hire. Like, ‘Oh it’s going to be a slow night, let’s cut them. Things are dying down, let’s send them home,’” he said. “Our selling points to servers were, ‘Yes, on a good Saturday night you’ll make less money. But on a slow Saturday brunch you’re going to make more.’” On those slow days, Moore gives the front of house staff other tasks to do, such as helping with kitchen prep work, in order for them to keep their hours up.

Moore has also built in a growth track for his front of house employees. Typically, servers do not want to get promoted to a management position, he said, because that salary pays less than the server was making in tips. Plus, in his old system, all servers were paid the same. Now he gives servers with more experience a higher starting wage. “There’s incentive for the new server to learn more and become a better server and manager,” he said. “Like any other job in the world, you can get a raise, or you can not get a raise. We can manage people like you can manage people in any other line of work.”

Rice was hired before the change, and she decided to stay on, despite losing her tips. “Overall I probably make less, but I’m OK with that. I think it is the right thing to do,” she said. “The minimum wage should be helping everyone, and with tips it is only really helping the front of the house. The dishwashers and the bussers get left behind. Everyone works together, so for one person to be making more is unfair.” Rice added that she would be happy to work at another restaurant with a similar tipless pay structure.

For now, though, she hopes to continue to work and move up the ranks at the restaurant. “They’re providing a chance for everyone to move around and be familiar with other parts of the restaurant,” she said. “We get to see different sides of the restaurant and experience a different position.”

On the other hand, Cabril Barnes, a manager at both Actual Café and Victory Burger, says that he would be one of those servers to leave if tips had been eliminated at his restaurant. “Tips are definitely an incentive. I personally would not want to work in a place without tips and work just for a flat base rate,” he said.

Despite the staffing changes, Moore and his employees all report that the restaurant’s service has improved. “We have a better sense of teamwork now,” said Rice. “Guests are looking closer at our service and they’re applauding us. Everyone is noticing positive effects.”

Porter has long been an advocate for eliminating tips. He famously did so at his San Diego restaurant, The Linkery. “The idea that servers are motivated by tips is an enormous fallacy that has been totally disproven,” he said. “Great servers, as long as they are well-compensated, are going to do great work without tipping incentives. It turns out that that is pretty much how every other American works. When you’re fairly compensated, you’re going to do great work out of your own personal pride and the joy of doing great work.”

Indeed, Moore reports that his servers feel just like that. “The servers said something curious the other day at staff meal. They said, ‘There’s something about this which makes everything feel more professional. It makes it feel less like I’m putting on an act for a customer in the hopes that they might tip me. It’s more like I have an incentive to just do a really good job.’”

Bednarz agrees. “You can argue all day long about how tips deviate based on the level of service or product that we give — they don’t. On a crappy day, our tips are just as good as on a good day. We know when we’re screwing up on the floor and when we’re kicking ass. And tips are mostly the same,” he said.

Not surprisingly, Moore’s back of the house team is pleased with the changes. “The cooks got raises and they’re excited that we’ve taken an interest in making it so they can keep living here. Our cooking crew has always been fairly solid, but now it’s really solid,” said Moore. “We pay more than almost anyone now. It’s still not enough, but it’s getting there.”

Added Veatch, “I’ve been in the industry for ten years and I’ve never worked at a restaurant that was more respectful for my hours, did more to pay me for the moments that I’m in there, and cared more for me from a quality-of-life perspective and a cost of living perspective than Camino. I would never go back to a restaurant with a traditional tipping system.”

Moore hopes that more restaurants will see Camino’s success and mimic their payment approach. “What I would love is for the restaurants that are really busy and popular, that make more money, for them to make the change,” he said. “But I think they’re nervous about losing their floor staff.”

“It’s going to be a really big change, and there’s going to be a big transition,” Moore continued. “I think the ‘no tipping’ model might be the model because I think customers are going to get tired of weird charges at restaurants.”

Rice agrees. “I think that we’re going to be seeing a lot of less traditional restaurant [pay structures] over time. We’ll be seeing more restaurants that are adopting what Camino is doing,” said Rice. “Restaurants are also becoming more professional than they were before, which is a big deal for the Bay Area because restaurants are such a big part of our economy.”

Overall, Moore is pleased with the change. “It’s sort of scary being the test case but Allison and I are super happy with it,” he said.

Chinatown's Legendary Palace shut down earlier this year. Photo: sfbaywalk/Flickr
Chinatown’s Legendary Palace shut down earlier this year. Photo: sfbaywalk/Flickr
Chinatown’s Legendary Palace shut down earlier this year. Photo: sfbaywalk/Flickr

Wages increase and Chinatown struggles

Other restaurateurs in Oakland have not been as happy.

In March, stories in on NBC Bay Area, on CBS SF Bay Area, and in the San Francisco Chronicle documented struggles in Oakland’s Chinatown. The Chronicle reported that four restaurants and six grocery stores in and around Chinatown closed in advance of the wage hike, including Legendary Palace, a popular banquet restaurant.

However, Bednarz, who has been working with the Chinatown Chamber of Commerce, says the problem in Chinatown is greater than the repercussions of increased labor costs. “There’s kind of a perfect storm going on in Chinatown. The port strike really hurt during Chinese new year. There is the competition around Chinatown. Other cities now have more Asian markets and restaurants popping up so that people that used to commute to Chinatown to do their shopping now sometimes do it in their home city. Real-estate prices are starting to go up,” he said. “And now there’s this wage increase.”

Chinatown restaurants have generally not followed the same trends as the newer, pricier restaurants in booming parts of Oakland. Instead, they have succeeded based on providing food and other goods at super-low prices. According to Bednarz, it is this pricing structure that may be these businesses’ downfall. “It’s apparent that some Chinatown businesses might need to find other strategies to differentiate themselves. Rather than using price as the primary means to compete, they may need to focus on service and product instead,” Bednarz wrote in an op-ed for Oakland Local. “They might need to use different marketing strategies to reach non-Chinese customers, but need to do this carefully so they don’t alienate their Chinese neighbors.”

Jayaraman takes a harder stance. She points out that all restaurants have to refigure their budgets for all sorts of unexpected price increases, such as food costs or rental agreements. “When other costs go up and you see a business close, the public doesn’t say, ‘Oh well, that means we should have kept food costs artificially down.’ They say, ‘That’s too bad the restaurant couldn’t figure out how to make it work,’” she said. “Why is it that with wages alone, as opposed to every other cost, we say, ‘We should artificially depress wages to help out these business owners?’ We don’t say that with food costs, we don’t say that with supplier costs of any other kind. We can’t say that with human costs either. Human costs are have so much greater impact on so many more people than all the other costs that a restaurant has to pay.”

Both Bednarz and Jayaraman agree that outreach and business support will go a long way to preventing more businesses from closing. “Our feeling is that business that just outright close when the minimum wage goes up either weren’t properly operating to begin with or don’t have the support or the know how and the technical assistance to figure out how to make it work,” said Jayaraman. “I would love these employers that are struggling to be in touch with us and we can provide … peer support, or even potential access to various supports and capital.”

Jayaraman has organized a group of what she calls “High Road Restaurants” within ROC-United. “It’s not only a group of folks that are advocating for better wages and working conditions but it’s also a peer network for employers to learn from one another how to continually raise wages and do the right thing,” she said. In the East Bay, her group includes Arizmendi, Café Gabriela, FuseBOX, Kain’bigan, Kingston 11, PieTisserie, Sweet Bar Bakery, Tamales la Oaxaquena, and the Swan’s Marketplace businesses B-Dama, Cosecha, Miss Ollie’s, and The Cook and Her Farmer. Kingston 11, in particular, has been involved in the group. Jayaraman says that the owners Adrian Henderson, Nigel Jones and Andre King came with her to Washington D.C. during the “Fight for 15” rallies on April 15.

Similarly, Bednarz, along with Hillyard and several other prominent Oakland restaurateurs like Charlie Hallowell of Pizzaiolo, Penrose, and Boot and Shoe Service; Chris Pastena of Chop Bar and Lungomare; Emily and Scott Goldenberg of Caffe 817; and Allison Arevalo and Erin Wade of Homeroom teamed up earlier this year to brainstorm ways to adapt their budget and support other small business owners. “I would characterize the group as being a collection of values-driven restaurant owners, folks who are as concerned about fairness as they are about their own personal financial well being,” said Bednarz.

“We didn’t form it to be an advocacy group or anything, it was more about partnering together,” said Hillyard. “If we wanted to do social marketing stuff together, great. If we just wanted to be a sounding board for ideas for one another, that’s OK too.”

The group’s main objective quickly became clear — education. “We needed to educate the public on why prices were going up and why it’s a good thing because everyone is going to be earning more income,” said Hillyard. “Our customers understood why prices went up and it’s fortunately worked out ok so far.” Member restaurants were active supporters of the Lift Up Oakland campaign, and some, like Bednarz and Hillyard, spoke at rallies and wrote letters to members of Oakland’s government.

“Speaking for myself personally, and interpreting what I hear and see from other folks, we genuinely give a crap about what is happening in all parts of Oakland,” said Bednarz. “And the last thing that I want to see is small businesses that have been anchors of neighborhoods for decades go out of business because they are unable to adapt to the change in their cost structure.”

Barnes, who works for Bednarz, was so impressed with his employer’s involvement that he, too, got involved. He spoke with other neighborhood restaurants and wrote a letter to the new mayor, Libby Schaff, who was been a vocal supporter of the campaign.

The best way to help any business struggling with the wage increase, say both Bednarz and Jayaraman, is to continue to support Oakland businesses, especially those in Chinatown. “Visit Chinatown. Remind yourself that it’s full of interesting restaurants and eat at your favorites. Tell the staff that you’d support them even if they raised their prices a bit,” said Bednarz.

Actual Cafe. Photo: Carrie Cizauskas/Flickr
Actual Café. Photo: Carrie Cizauskas/Flickr

Emeryville set for highest minimum wage in country

Only three miles but a world away from Chinatown, Oakland’s neighbor to the west has been having minimum wage debates of its own. Last week, Emeryville’s city council unanimously approved a rapid minimum wage increase — from $9 to over $14 per hour — to occur this July.

Unlike Oakland’s wage increase, Emeryville’s change did not come about via an election. Instead, the council members drafted and voted on an ordinance to increase the wage on their own, as they did in Berkeley last year. The council has accepted public comments at special city council meetings, but did not call for a study of the increase or ask for input other than during meetings.

The council’s wage will be, by far, the highest in the country, and it is set to increase almost to $16 per hour by by 2019. Despite support for a fair wage, Emeryville small businesses were not supportive of the original proposal, which would have included all businesses with at least 10 employees.

Businesses with fewer than 10 employees would be able to take a small business exemption and phase in the wage increase over three years. Those who take the exemption would would need to match Oakland’s $12.25 wage on July 1; the following year, wages would rise to $13 per hour and continue to increase by one dollar per hour each year until 2019, when the wage would need to match the rest of Emeryville. After pushback from business owners like Hillyard, who has 12 employees at his Emeryville location and wouldn’t have qualified for the exemption, the council has amended its proposal to define a small business at 55 employees.

The problem, said Hillyard, who opened his Emeryville Farley’s location in 2010, is that the increase is scheduled to go in effect overnight. Hillyard has already raised his prices at his Emeryville location to match those at Farley’s East, but doesn’t believe he could retain his customers with a second price increase this summer. “There would definitely be customer push back at that point. I don’t know what we would do,” he said. “Even our employees are saying, ‘Wow, that’s a big increase. That would be great, but that might be hard for the business.’”

Another concern about Emeryville’s wage increase is that it will shift the economic dynamic between it and other East Bay cities. Employees could theoretically leave jobs in Berkeley or Oakland to go work in Emervyille, while customers could theoretically abandon pricier Emeryville restaurants for others across the border.

As Bendarz explained, it isn’t difficult for potential customers to comparison shop. “A latte is a latte and you can get something fairly similar at plenty of places around town. For customers who are particularly price sensitive, it’s not a big trip for them to go two blocks across the Berkeley border and get a similar drink for less,” he said.

In an attempt to stymie these concerns, Berkeley mayor Tom Bates proposed a coordinated regional minimum wage last spring between the East Bay cites of Berkeley, Oakland, Emeryville, Alameda, Albany and El Cerrito. Bates suggested that each neighboring city match Oakland’s wage plan in order to level the playing field between regional businesses. “I don’t want to put our businesses at a disadvantage with regard to neighboring communities. It makes sense for everyone to have the same wage,” he told Berkeleyside in April 2014.

Likewise, Hillyard is in support of a regional approach to wage increase. “It would make it much easier for businesses. For example, [Bednarz’s] Actual Cafe is a block and half away from our Emeryville store. If they’re paying a wage that’s two dollars less per hour that means their prices are going to be less as well and it puts our Emeryville store in a difficult competitive situation. The increase would be a real challenge for Emeryville small businesses,” he said.

As of October, when Berkeley’s minimum wage went up to $10 per hour, Bates was still advocating for a regional wage. It may happen without actual legislation. Both Oakland and Emeryville’s wage increases have prompted further discussion on the part of Berkeley City Council’s Labor Commission. Last month, the commission proposed a revised minimum wage law that would increase wages to $16 by 2017 and include language similar to Measure FF regarding service charges. The council is expected to consider the proposal June 9; meanwhile Berkeley’s Minimum Wage Initiative Coalition plans on filing for a ballot measure petition should the proposal fall through, according to the Conta Costa Times.

Chris Hillyard, owner of Farley's on 65th in Emeryville and Farley's East in Uptown, supported Measure FF, but has concerns about Emeryville's proposed wage increase. Photo courtesy: Chris Hillyard
Chris Hillyard, owner of Farley’s on 65th in Emeryville and Farley’s East in Uptown, supported Measure FF, but has concerns about Emeryville’s proposed wage increase. Photo courtesy: Chris Hillyard
Chris Hillyard, owner of Farley’s on 65th in Emeryville and Farley’s East in Uptown, supported Measure FF, but has concerns about Emeryville’s proposed wage increase. Photo courtesy: Chris Hillyard

Looking to the future: diners encouraged to get involved

The IRLE is currently researching how Oakland restaurants have adapted to the wage increase. The research center collected data on prices before and after the increase, and, according to Reich, plans to release the research soon.

Regardless of the results, Oakland restaurant employees and owners predict more changes to come.

“This is such a big picture win for everybody, but any time that there’s a change in the industry, any time there’s a disruption like this, it will have some kind of random effects,” said Porter. “Some might unfortunately take a hit to their business, and that could be me. There’s no guarantee that it won’t be me. So everyone’s a little nervous because you know that when there’s a sea change like this, it’s the roll of the dice could be that it doesn’t work for me short term.”

However, added Porter, “The only way to make the business sustainable is for price of going out to reflect the price of paying employees in our community enough to live on.”

Pina Kahlo, a barista at the new Speaker Box Café in Uptown, thinks that the minimum wage issue is more complicated. “Minimum wage is going to be minimum wage. The system was never meant to fully take care of [service workers]. It is up to us as individuals to be good neighbors to one another, to see one another has human,” she said.

Her solution? Stay active and engaged. “Come out for fair wage, come be with people who also think and want to hang out and make friends too. If you are not out being with people who expressly say ‘I am about this thing,’ then you are the one that’s missing out,” she said.

Similarly, Jayaraman encourages diners to continue to participate in the wage discussion. “I would encourage the consuming public to continue to express their support for workers having better wages and working conditions every time they eat out,” she said. “It’s both a way to let restaurants know that customers really value these things, and it’s also a way to express support to employers who are making the change, staying in business, doing it right, not complaining and trying to figure it out. … More than ever we should be supporting Oakland restaurants because they’ve made a huge leap.”

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Kate Williams

Kate Williams has been writing about food since 2009. After spending two years developing recipes for cookbooks at America’s Test Kitchen, she moved to Berkeley and began work as a freelance writer and...