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The Tipping Point

When Oakland's new minimum wage kicks in on March 2, many restaurants plan to raise prices — and, in a few cases, eliminate tips altogether.



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And Ty Hudson, a researcher for UNITE HERE Local 2850, the union that represents hotel, food service, and casino workers in the East Bay and North Bay, argues that while he strongly supports higher wages for back-of-the-house employees, he doesn't think restaurant owners should use the line cook's low pay as an excuse to take money away from servers — to essentially pit two classes of workers against each other.

"We don't believe in fighting amongst ourselves over the scraps," Hudson said. "We believe in a bigger pie."

In Hudson's view, the vast majority of servers don't lead the kind of charmed life that some restaurateurs describe — they aren't "raking in the dough," especially if they don't work at a high-end dining establishment. "CEOs are overpaid. Waiters and waitresses are not overpaid," he said.

Nevertheless, Hudson said that he wasn't necessarily opposed to the idea of the restaurant industry moving away from the culture of tipping — of placing the burden of adequate compensation back on the employer, where it belongs, rather than on the customer. But both he and Allegretto of the UC Berkeley Center for Wage and Employment Dynamics say they would feel more comfortable with a shift in that direction if more protections were put in place for the workers.

Indeed, this was part of the reason why labor organizations pushed to add a provision to Measure FF that stipulated that money from any "service charges" that a restaurant collected would all be given back to the employees that provided the service — a significant change from the state law, which allows businesses to simply treat that money as general revenue. This is true, for instance, of restaurants in Berkeley, such as Chez Panisse and Comal, that charge a service fee: None of that money goes directly to the server, though the restaurants use the revenue to help fund better overall wages for their employees.

When the minimum wage increase first passed, several Oakland restaurants, including Camino and Duende, initially announced that they would be implementing a service fee in lieu of tipping, but then recanted because of the hazy legal area surrounding what restaurant people refer to as the "chain of service." Are workers who aren't directly waiting on tables — cooks, for instance — part of the chain and, thus, eligible to take a cut of the service fee revenue? Recent court rulings indicate that this might be the case, but the lack of certainty led most of those restaurant owners to go in a different direction. They wanted to make sure back-of-the-house employees got a fair share of that money, but worried that they'd be opening themselves up to a lawsuit.

But Allegretto said that the intention of that provision was only to make sure that employers didn't keep the service fee for themselves, not to keep it out of the cooks' hands. Whether that interpretation will stand up in court remains to be seen.

There's another option, but it's one that might be difficult for both restaurant owners and customers to accept: Restaurants could raise their prices high enough so that they could afford to give both their servers and their cooks a healthy raise. But would diners be willing to pay those prices?

Ultimately, Actual Cafe's Bednarz admitted that it's easy for him and his peers to lose perspective when it comes to the topic of a minimum wage increase. What gets lost amid all of this hand-wringing, he said, is that there are a lot of workers whose lives will be vastly improved by the new law — a benefit to society that far outweighs any inconvenience he has to work through as a business owner.

"There is a much bigger Oakland at stake here," Bednarz said.

Meanwhile, Sassen said he's just relieved that he's made his plans public now, and that for the most part, the feedback that he's gotten has been positive. He said he definitely has a sense of fear about how customers will respond, and whether his servers will stick around. But he's also convinced that the tipless system is the way of the future — and that there's no way the restaurant industry can continue to allow the cooks, whose craft forms the foundation for Oakland's much-vaunted food movement, to reap so few of that movement's benefits.

"The system that we have is very extreme," he said. "Why don't we go back to something more normal?"

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