Why Restaurants Are Expensive: Labor

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restaurant labor

Because all these vegetables are not going to peel and chop themselves.

In the previous post of this series, I discussed why food is increasingly more expensive for restaurants. This was a good first step in explaining why the price of food is higher at restaurants than it is in grocery stores and, it is just one of the factors at play. Another reason why it is less expensive to cook food at home is you are most likely not taking a salary for your services as a cook, server, or dishwasher, in your own home. Cooking is one of the tasks you perform in addition to your job. If you choose not to cook at home, you can go to a restaurant; where, there are people who shop for food, cook the food, serve the food, and clean up after you. It is their job and much like when you go to your job, these people insist on getting paid for their services.

When you look around a restaurant it is important to realize that everyone you see is being paid at least in part by the price of the food and drink being sold. You should also know there are just as many people that you cannot see working in the back of the restaurant to prepare your meal. Fortunately for you, the National Restaurant Association has one of the most effective lobbying arms of any special interest. They are hard at work for you, as a guest; often at the expense of the people you see at a restaurant. Most everyone you see when you are at a restaurant has agreed to work for less than minimum wage in hopes of making tips. While you only tip a server or bartender; the server or bartender must share their tip with several other employees who work at the restaurant. In effect, these “other employees” are subsidizing the cost of you meal.

The time you see the employees is only part of the time they spend at the restaurant. If you are the first guest at a restaurant when they open for the day, you are still several hours behind the first employee to arrive. The kitchen has been hard at work for hours preparing all of the items that go into your meal to ensure you are not kept waiting for your meal. The servers and bartenders arrived an hour before guests to make sure everything is stocked and ready for your arrival. Long before the first dollar is received by a restaurant and the first tip is given to a server, people are hard at work on your meal. The same applies to the last guest to leave the restaurant. Once the last guest leaves, the hard work begins. Cleaning, resetting, mopping, vacuuming, restocking, taking out the trash, and several other tasks are completed after guests leave.

While these factors are at play in every restaurant, they are magnified at more upscale restaurants, and guests expect more quality from the meals they receive there. This requires these types of restaurants to hire staff members with more experience and training. The high school student who runs the microwave at a chain restaurant does not demand the same salary as an experienced chef with a culinary degree. Just as experience, advanced degrees, and awards command higher salaries in other fields, the chef that cooks the meal for your special occasions demands a higher salary. Thanks to the lobbying efforts mentioned earlier, most of the people you can see at a restaurant are still working for less than minimum wage. The experienced server works for the same rate as the rookie at a chain restaurant, while providing a higher level of service. The compensation for their expertise is a larger tip as the percentage of the price of the higher priced meal.

The cost of a meal in a restaurant must be taken into account the wages of all of the people responsible for the meal. Before comparing the price of the meal at a restaurant, to the cost of cooking at home, you must determine how much your time is worth. Adding that hourly wage for every step of the process of purchasing, preparing, cooking, and cleaning to the price of food at the grocery store provides a far more accurate comparison. The price of food and the wages paid to employees are not the only factors that have to be taken into account. In coming posts, I will discuss several other factors that add to the price of food in a restaurant, showing a greater value than you recognize.

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About David Hayden

David Hayden is the creator of The Hospitality Formula Network, a series of websites dedicated to all aspects of the restaurant industry. He is also the author of the book Tips2: Tips For Improving Your Tips and Building Your Brand With Facebook.

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