Cost of Business

August 14, 2021 T.T.

Much is made of late with regards to the role of inflation and our nation’s economic recovery. We are seeing HELP WANTED signs in almost all industries (those are largely low paying service sector jobs the ones most hit hard by the quarantine) and then we have the issue of pay and safety at work that once seem relegated to the OSHA folks and those jobs we think normally as physically dangerous seem to be almost all jobs now. And lastly we have the belief that the extended unemployment benefits and extra incentives that were last dished out months ago have many folks living high on the hog and buying up all those retail goods we keep hearing about that are now selling out and cannot be restocked due to supply chain disruptions, once again attributed to all things Covid.

The reality is Americans were never paid sufficiently and wages have never been commensurate to the cost of living which is why most Americans pay well over 40% of their income to housing. With the eviction moratorium looming overhead we are hearing now about many being taken to court to find that millions of “Gummit” money is awaiting processing that could be distributed to those landlords who are demanding back rent. Some simply refuse and for whatever reason want to evict said tenants, and said tenants are usually faces of color and struggle in the best of times to make that monthly obligation. Much like judgements made by Bill Collectors few make it to court to debate the charges and allegations and the same goes with renter’s courts and the process to navigate said system is again all related to the thing no one wants to teach – critical race theory. The system is set up so complicated (as these Lawyers explain) that unless you can afford legal support to assist you are on your own. And this is largely applicable to faces of color/the poor. So let’s roll through an example: You are poor, you owe money (rent, bills etc) and you can’t pay them all, so you take on a money lender bullshit high interest loan to try to consolidate, or you simply pay the minimum on each or you simply ignore one, and pay in succession or order of import. In other words there will be always one debtor getting shafted with the idea of paying them more the next time around. So the debtor/landlord files a judgement which is then mailed (no they don’t serve them as once did) and in turn you either ignore it, don’t receive it or cannot take the time off of work, arrange child care, transportation, get the paperwork completed and supported, let alone know where you are to go and what to do when you get there, it usually means you lose, before you walk in the door. That is a part of what CRT is trying to say that the system is set up for failure for those who are not white. **

***this is where I note that in the South there are wide swaths of poverty that crosses color lines but the white poor rarely acknowledge they are poor, the may participate in some of the social safety nets, but they often don’t as a way of elevating themselves above the Black community and for whatever reason they see subsidized housing, food stamps and medicaid as the way the Government supports Black people or as Reagan once said, “The Welfare Queen.” And yet they are as dirt poor and in need there is where race finally takes one on the ladder of the South but it is down at the bottom folks, openly race hating/baiting is not their priority. That is the North that does that. Hi Seattle! ***

I love when we say old folks are on a “fixed income” UH WE ALL ARE. And even that is debatable, again, many people do not work a 40 hour work week. Many of the service jobs are flexible schedules that do not guarantee a specific set days/hours worked. This is of course bypassing the issues regarding the race and gender pay gap that has persisted with the decline of unions that did its best to reconcile that issue; The few jobs that are union organized do get this, but even there, there is a difference in organizing between the two colored collars, as exemplified by the pursuit to organize Amazon, versus those at magazines and newspapers. Funny how that works isn’t it? Or is that about education and the ability to communicate effectively vs about need and desire to collectively bargain? But even those businesses that have strong union members since the pandemic are still awaiting a return to full time staffing/hours thanks to the endless change in dynamics due to Covid.

Covid exposed a lot of the problems the average worker was facing, irregular hours, low pay, no health care or retirement benefits, little advancement/training, high housing costs, transportation issues and of course sick leave. When you are white collar you have the perk of commuting from the bedroom to the office, you have sick leave, health care benefits, retirement planning, a career track and of course wage and salary reviews annually. The jobs done are considered less essential ironically and that truly exposed the reality of America, the essential workers are the lowest paid, the sickest and the most invisible. They are now so invisible they are not filling the jobs they once did without complaint.

But here is the Venn Diagram of life, we overlap in our interests and pursuits. We all like to go on holiday, we like to go to sporting or other entertainment venues and we love to go out shopping and more importantly – eating. And with Covid there is no clearer widespread damage outside of human lives, than the one in the restaurant industry. From large to small many of businesses that make and serve food, be it fast, casual or elegant, found themselves having to pivot or close in which to survive. Funny how the word survival has taken on so many meanings when it comes to Covid, but we have used it interchangeably to describe cancer patients, sexual assault victims, or any other form of disease, pain or failure. It is like the term, Fixed Income, WE ALL ARE.

I do dine out when traveling, and over the years that has finally evolved into one night usually sitting at a bar when I order up. I used to go to dine out and it is fucking boring as hell to sit at a table and do course after course alone. I did the last big dine at Collective Retreats Lodge on Governor’s Island where I stayed for a night of glamping in June. It was fantastic until they charged me for two dinners, then not so much. Untangling that hot mess ruined the experience in its entirety. And yes I had lunch there before and they did the same. Single diners are clearly a problem there. But the food was amazing and each course was a revelation of delight. Food is great when someone else takes you on an adventure that you would never do at home and that is why every now and then I step it up. But the cost of that and the time involved for me to sit alone really defines that it is not worth it in every sense of the word. The average cost for me to do a real meal is around $200 bucks. Yes that is right, when I walk away with a bill less than 50 it means I did not drink or eat anywhere near what I would if I was truly there to enjoy a meal out. And maybe that is the point, I should not be spending that but once or twice a year. And more Americans need to realize that. The Brunch Crowd have to the most annoying folks ever and as Gabrielle Hamilton a Chef has written about and the late Anthony Bourdain has as well, it is the least profitable and most thrown together menu option. But it is cheap and it puts asses in seats and the low margins of restaurants this is their version of fast casual. But also we have excess in portions and quality. And the reality is that many of the chains that are blooming with onions and endless pasta need to rethink that on two counts – cost and health. This contributes to many of the larger issues of Covid when it comes to pre-existing conditions that led to many deaths; the overall Comorbidity of Americans (look at Trump lives off fast food and yet Golfs.. gee Tiger Woods gets a pin in his leg and is fitter) has many overweight, high blood pressure, diabetes and all of this is preventable. We sure fear preventative medicine or care don’t we?

Food is an obsession in America. Dinner is a meal that is the round table, the event, the special occasion, the date night, the celebration or just the chance to reset. When you go out the idea is to take the night off from the heavy lifting of shopping, planning, prepping, eating and cleaning. Now take that and multiply that by at least 10. It takes that many people to prep your food, clean your plate, make your drink, bring that drink and plate to you and lastly the two or three to actually make the food. The ordering, the planning and the delivery is also a chain of command and again a series of businesses that do the laundry and cleaning of the establishment when closed. And add the guardian of the gate, the host/hostess and the series of individuals that manage the wine and liquor to enable you to have a choice from which to choose. So let’s play how many people does it take to make your meal and dining out experience just that, an experience. A whole fucking lot! And all of them have to be paid, make a living wage, not work when sick so you don’t get sick and that all the food, all the dishes, plates, glasses and silverware is clean for you to use and that all has to be done in less than a 24 hour turnaround time as many restaurants are open 12 hours a day to make it work. It is a low profit margin business in the best of times and these are not the best of times.

My Mother said that I was to pick a profession that I could do anywhere and that was food or teaching. She did not mention hospitality which I could also do but maybe she had a thought about that business that she did not share but let’s put it this way, if she thought it was to protect me from sexual situations she did not realize that women are not safe in any profession regardless. And yes folks ask those Nuns about that one. I spent about three months working in a old folks home serving lunch and dinners four days a week. The worst.job.ever. I learned two things: That I don’t want to end up in an old folks home (yeah right there alright); and that I hated the food service industry. I do like the service trade and loved working retail overall as when I was unionized and had set hours I did well and made money, it still sucks but I did great at it and it made me a great Teacher. So I guess Mother was right.

But we are also lousy guests and hard to serve. Today I am seeing a much more abusive behavior by customers, on planes, on trains, in automobiles, in stores and on the street. We are an angry lot that Covid enabled and exposed. We hit the gas pedal on this one and the crazy are racing the autobahn and the rest of us are just dodging the speeding cars. No folks we are not ever going back to “normal” whatever that was or is. We are in survival mode. See that word is all purpose.

I read this essay about the idea that restaurants need to rethink the model and in turn how we see ourselves in relation to that business, from costs to frequency, it is time to maybe turn back time. Cher called that one.

Restaurants Will Never Be the Same. They Shouldn’t Be.

Aug. 10, 2021 The New York Times

By Peter Hoffman Mr. Hoffman operated the New York City restaurants Savoy, Back Forty and Back Forty West from 1990 to 2016.

Few business sectors have experienced such violent swings between feast and famine in the last year as restaurants. Early in the pandemic, there was a demand problem: Few to no customers were willing to take the risk of eating in a dining room. Today, people are going out to eat again, and amid overwhelming demand, there’s a supply issue: A serious labor shortage confronts restaurants across the country.

As a chef and former restaurant owner, I know that the root causes of this predicament date to well before the pandemic. To address it, restaurants must fundamentally change. Diners must, too.

Operating on the thinnest of margins, restaurants often engage in a race to the bottom to offer diners “value” and keep them coming back. They buy cheap ingredients, pay low wages and stretch people to their limits. In many restaurants, immigrants and people of color are marginalized, and reports of sexual harassment and assault are widespread. And restaurant culture more broadly shames employees for taking care of themselves, valorizes abuse as “tough love” and shows little regard for work-life balance.

This can be especially true in high-end, prestigious restaurants. They’re often worse places to work because they capitalize on the résumé-building value of their reputations, extracting even greater sacrifices from employees. Abuse (often glamorized on reality TV shows with celebrity chefs) is excused as necessary to create a superlative dining experience for the customer.

It’s no wonder that in the last year and a half, both front (hosting and waiting) and back-of-the-house (kitchen) restaurant workers have quit the industry in droves.

Restaurants’ staffing crises were not created by former employees opting to collect unemployment benefits rather than return to work, as some people have argued. Rather, many restaurant employees have discovered that having time to care for family members, engage in self-improvement projects or participate more in parenting and household chores improved their well-being. They have reflected on the abuse, exploitation and lack of safety they endured in kitchens and dining rooms, and questioned whether or not to return.

There’s little to reassure workers that returning to restaurants now is a safe or wise choice. Although many corporations are delaying return-to-work requirements until later in the fall or even next year to protect the health of all their employees, restaurants that survived the pandemic — and many didn’t — are welcoming customers back out of necessity. Workplace safety remains a real concern. In this ongoing pandemic fueled now by the Delta variant, restaurants cannot easily adapt to social distancing or staggered work schedules. By design, kitchens are tight spaces, and restaurant work involves closely interacting with an ever-changing cast of strangers. Working from home is not an option. And as diners return to restaurants, some seem to have forgotten their manners. Reports of rude and abusive customers have proliferated.

Thankfully, extended unemployment benefits have afforded some restaurant workers breathing room to consider whether to return. Increased wages are a necessary first step to convince them, but for many workers, the decision is not only a financial one, said Steven Picker, executive director of the NYC Department of Small Business Services’ Food and Beverage Industry Partnership, an alliance between the city and industry professionals and businesses. We must take this moment, he said, as “an opportunity to commit to improvements in talent management and workplace culture — critical components in the restaurant industry’s ability to be healthy and resilient.”

Owners can begin those improvements by increasing the size of staff and committing to mentoring and supporting employees, practices common in other industries.

Calling out sick, for example, does not have to signify weakness or lack of commitment. As much as I was intent on creating a positive work environment in my restaurants, we often ran with just adequate staffing. As a result, we had little flexibility in responding to staffing emergencies. We leaned on people to come into work, whether they were fully recovered or not. This led to instances when influenza outbreaks moved through the entire staff, wreaking scheduling havoc and even possibly transmitting the illness to guests. At the time, risking transmission was an acceptable cost of doing business. Fortunately, the pandemic has taught us that restaurants can better serve their community by building the staffing capacity to allow ill employees to stay home.

The changes restaurant owners must make will succeed only if diners support them. If restaurants are to raise their wages, grow their staffing rosters and improve their cultures, diners will have to pay more to dine out and should embrace those increases as expressions of their own values.

I have faith that diners can accept these changes gracefully, even if it means going out to eat less often. As a pioneer of the farm-to-table movement, I was one of many chefs who accustomed diners to paying what we understood to be the real cost of good food. At my restaurants, we heralded farming practices that built up the soil. Our diners willingly paid higher prices for food produced this way. Our reputation was built on transparency and the tacit agreement between chef and diner that, for the benefit of the planet, everyone was participating in paying the true cost of food.

Adjusting to the price of better work cultures will be difficult for many. But dining out less isn’t necessarily a bad thing. Treating a restaurant meal as a special occasion rather than a frequent convenience may represent a quality of life improvement for all. And operating restaurants five days a week, instead of seven, could make work life more manageable for staff members.

Unlike the taste of a fabulous heirloom tomato, a kinder and more fair work culture may not be immediately discernible on the palate. But many consumers already fold labor considerations into their ingredient choices. They buy coffee and chocolate from Fair Trade sources that pay living wage premiums to workers, for example.

Can we build a work culture that doesn’t thrive on exploitative policies? The answer will depend on whether owners can improve workplace culture and food sourcing, whether diners will pay higher prices for those improvements and whether we can view restaurant dining not as a replacement for home cooking but as a special addition to it.

Covid Chronicles – The Holiday Edition

December 13, 2020 T.T.

With about two weeks left to Christmas and the inevitable third wave or fourth depending on who is counting.. again we had Memorial Day, the Fourth of July, Labor Day and Thanksgiving. We we warned repeatedly during each to stay long and distant and while Covid spiked in some places it declined in others and round and round we went bringing us all back to ground zero with the same hysterical warnings, the same threats, the increasing numbers of hospitalizations and deaths which have never stopped while all the world’s a stage and we are all players in this macabre scenario that reminds me of the Jerry Lewis telethon of my youth, with the never ending pleading, begging, and tears just to remember the ones being lost to a disease that could be cured. That is what we need America, a COVID telethon! Dolly Parton would be the perfect host as she is already a winner in the Covid Chronicles donating a cool Million to Vanderbilt one of the hospitals working with Big Pharma on the vaccine.

And that is where we are America the roll out of vaccine number one to hot spots in America. Undoubtedly Jared Kushner who really showed his talents and gifts for crisis management during the nascent days with the PPE and Ventilator distribution issues will perhaps hopefully take a backseat on this one and let professionals take over to distribute the drugs to those in need. Remember those days with naval ships arriving in ports, field hospitals being erected in convention centers and the charity tents in public parks? Good times folks as those numbers of cases handled and the outcomes are still in question and the costs have yet to be fully explained on how and why many hospitals remained under utilized while others were maxed out with portable tents in parking lots and refrigerator trucks for the dead left on side streets by dumpsters which became a rather significant marker to explain how we were handling Covid in Phase One.

We have had several months to improve and centralize communications, to figure out how to educate and operate schools, how to handle crowd control and compliance and yet we have done fuck all nothing other than posture and threaten. It is working out great, or not.

The issues of self responsibility continue as now violence has begun on the streets over the failed re-election of the Dr. Frankenstein who has no interest in the continuing crisis and once again Governors are assuming control, co-opting Igor for their own agenda and like the media whore he is he simply pipes in supportive yet cautious remarks which mean nothing except to remind everyone to mask up. I recall that same messaging from him back in the 80’s, no love without a glove or something like that. While I do respect Fauci I feel he is not who we need to reach a younger and more diverse audience especially faces of color and those who are not well into Science. This has been another of the more insidious issues using Fauci and Birx two white Seniors to somehow communicate to the Tik Tok age and find a voice in those larger at-risk groups that are not old folks. Fauci’s recent affirmation with Big Daddy Bully Cuomo to close restaurants with no data to back this up is again another issue across the country in California that evoked the same mandate. There is so little real contact tracing and tracking that few believe indoor dining is the cause and reason behind the uptick when the last stat mentioned by Cuomo was that 76% of the cases were tied to “small gatherings.” Okay so they were where? Homes or in a public place or again the big perp – Churches – where they can no longer mandate closures on thanks to the Supreme Court. Again, here is where religious leaders would be an effective messengers to talk to those about how one can still be a participant in a religious community without the need to congregate in a specific place. But nope, crickets.

So we can keep schools open despite the fact that few educators wish to keep open but the consultants and policy wonks and those parents who hate caring for their kids see otherwise. The constant citing of statements like “falling behind” or the “lost generation” have been used to somehow validate that opening schools and allowing full attendance is the key to something, that something again seems economic in value and not about health and safety of those who work inside said buildings, you know the Teachers and Admins as well as all the other back of the house players who keep schools operating. You know that village thing.

I have always thought it was odd that the only data we ever hear are the positive cases, the number of hospitalizations and deaths. We have no idea how many are tested a day, what the status of thier case was/is and the number of recovered. Europe does provide that but even ages, gender race are not given. If we had a robust contract tracking and tracing we would but we don’t. Jared get on that you must have time on your hands.

The overwhelming failure by our Government be it on the Federal or State level is quite clear and it is why there is little compliance and at times sheer confusion as to what the current protocol is to be on a daily basis with now the incoming Administration adding their two cents further confusing and infuriating the Trumptards.

As for the media they do their best to further lend a voice not needed to the din with their endless stating conflicting studies and data that have not been vetted and tested to the level that should be before reporting. Facts matter and the most bizarre story was one in The Washington Post about South Korea finding a patron who contracted Covid in a restaurant with limited exposure of a scant 5 minutes from another seated over 23 feet away. Really? Of course that story was a rewrite of an LA Times story. No mention in either about possible extenuating circumstances or full examination of the strain verifying it through DNA testing and complete tracking/tracing of all the participants movements, their exposures to others? Wow that South Korea is amazing that is K Pop level shit right there. Or not. The article had no South Korean sources other than a person NOT involved in the study.. okay then. As for the American scientists and doctors contacted had doubt, one saying this:

“The problem that you tend to have is one of missing information,” says Richard Martinello, an associate professor at Yale School of Medicine and a specialist in adult and pediatric infectious diseases.“They may know well what happened within that restaurant,” Martinello adds, “but they don’t know what happened on the sidewalk outside the restaurant. They don’t know what happened back in the kitchen at the restaurant. There are so many other aspects,” including the fact that one in five people infected with the coronavirus will experience no symptoms, but may still spread the virus. But then again there is a story there that will scare the shit out of everyone and in turn validate the latest round of closing just restaurants, but not anything else. I see said the reporter who upon examining his credentials I see his was one with regards to restaurant reviews not science or foreign reporting including failing to list the CDC’s findings on indoor dining. Good job, I like BimBap too!

And if you question any of this you are labeled “histrionic” as that is the man’s way of saying to a woman, “I don’t like what you have to say, it confuses me.” Ah yes my menses is the problem, shame I don’t have menses anymore. The lack of true effective communication is a bigger problem than Covid at this point and it contributes to why few are truly grasping the urgency. And that many rely upon “social” media for information, shame that social distancing can’t be applied to that as well.

I read this report in of all things USA Today about the failures of the U.S. Government from the very early stages of this disease and how the haphazard manner of coordination and control led to what we are now dealing with. There is no way of knowing if better management could of stopped or offset this entirely but there are valid issues surrounding the death toll that clearly is related to this issue.

This says it all:

The virus shouldn’t have been able to sneak up on the United States. The world’s most powerful nation, historically among the most successful at stymieing infectious illnesses, had ample lead time during which the deadly pandemic was rampaging through Asia, and then Europe.

But in an early vacuum of leadership at almost every government level, with the message from the White House that the virus was not anything to worry about, Americans unwittingly spread the lethal virus to loved ones and strangers alike.

The U.S. squandered its early advantage. Roughly one year after the virus first came into existence, the country has suffered a loss of life far worse than any other.

I have written much about Covid and kept up with many studies, theories and stories about the virus, its transmission and the issues about vaccines and efficacy. I am over Fauci but I have been for a long time frankly and would like to see new faces (not celebrities there Cuomo but actual medical professionals) who could message more effectively than another aging white man, second wave fast approaching, January 20th. I also would like real information, better and more comprehensive data in which to understand the who/what/where/when/why. Shouting out numbers like I am in Vegas is not working for me and it is not improving my histrionics in the least. There is no cure for that apparently either.

Grubby Hands

April 14, 2020 T.T.

Today Whole Foods announced shutting the door to Bryant Park store in NYC with no explanation. I suspect a POS test there. In the interim they have too many requests for delivery so now it is a wait list and assigned times for those assessed I am sure using an algorithm that determines how much money one has spent in the past and a prediction of spending in the future, which means I am in high zone there. But again I loathe the experience and actually enjoy shopping as it is pretty chill with mostly professional shoppers and a few crackpots but otherwise its good.

As for food shortages that may be in some cases and regions as they have had shutdowns of Tyson plants and now Smithfield for Covid positive tests that require cleaning. Funny they have had a history of issues that have contributed to food borne illness in the past but sure now you care. And in turn we have immense waste of food due to shut downs of commercial kitchens and businesses that are large vendors and users of dairy and other produce. The diversion of said products has not fully been realizzed. So here we go with that hysteria next and I love cheese and found a moldy block the other day from my failed attempt at hoarding and obsessively shoving food down my face in panic mode.. oh wait. No. But now due to that I will regret wasting that excellent cheese.

But there are also supply chains and transportation issues that have come from this pandemic and truckers who are now essential workers and have to commute through hot zones with fewer rest stops and sanitations are at now pushing the pedal to the medal. And this is a field that had a major labor shortage are now being pushed to the limit.

I also noticed this week we have fewer take out options as one after another close with the endless restrictions and loss of consistent business have led to closures which I suspect will mean permanently after this ends. And this includes fresh bakery and other items that you take for granted in the best of times, now you really want a Baguette to go with that cheese. And to this the absurd meal delivery services which are expensive and often equally wasteful are not a better option as they too are facing shortages, so again stay home! I need to go shopping.

And we have had a massive amounts of complaints about GrubHub delivery agents who are thieves (not a new problem) and signing up to basically jack food so this again seems to add already fraught situations more issues and more frustration. Same with Instacart. Go figure. And all of these poor people that do tryy to do the right thing are jacked as well, go figure. So every time any jackass says to me stay home I will go YOU FIRST.

And one of the factors of this is the endless fees and costs associated with the delivery agents which was an issue before this began and why I never used them and when I did immediately regretted it (many have or had their own and in that case it was not an issue) so when another moron whom I was discussing the issue of these and why I loathe delivery and prefer to pick up and tip directly the actual workers in the restaurant, she said she is doing it to save the business. I had no time to correct that as again I am done with stupid; Now that we are FORCED to stay home and rely on others to do all of it nothing says opportunity to pad the bill.

And when the next Executive Order is signed by Daddy I am going to do what all children do, send them the bills.

DoorDash, GrubHub, Uber Eats accused of charging ‘exorbitant fees,’ using ‘monopoly power’
Nathan Bomey, USA TODAY

A new lawsuit against the major food-delivery services accuses them of charging “exorbitant fees” and forcing restaurants to raise prices for dine-in customers.

In the lawsuit seeking class-action status, several customers allege that GrubHub, DoorDash, Uber Eats and Postmates have “monopoly power” that they wield against restaurants and consumers.

Their fees range from 13.5% to 40% of purchases, the lawsuit says, adding that the companies “prevent competition and limit consumer choice.”

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“Specifically, Defendants use their market power to impose unlawful price restraints in their merchant contracts, which have the design and effect of restricting price competition from competitors in order to maintain … market share.”

The lawsuit, which is not tied to the coronavirus pandemic, accuses the food delivery companies of forcing restaurants to charge “uniform prices for restaurants” menu items throughout all purchase platforms, preventing “restaurants from charging different prices to meal delivery customers than they charge to dine-in customers for the same menu items.”

That restriction qualifies as an “unlawful price restraint,” the plaintiffs allege.

GrubHub declined to comment Tuesday. Representatives of DoorDash, Uber Eats and Postmates weren’t immediately available to comment.

The plaintiffs – Mariam Davitashvili, Adam Bensimon and Mia Sapienza – said that if restaurants were not restricted from doing so, they could charge lower prices for food sold through their own delivery services or food sold for dining in.

They filed the lawsuit Monday in a federal court in New York.

Food Glorious Food

November 3, 2017 T.T.

One of the heroic stories in Nashville is the one behind Slim & Huskies pizza and now their new Rollout store. Located on the emerging Buchanan Street in North Nashville where Jefferson just a few blocks south was the historically based district this is the new Nashville. The boys who run and created their pizza and in turn shop hire all local residents, encourage them to walk and in turn build a community that has been decimated for decades.

This is where we are confused about the issues that we call segregation but in turn embrace “International” districts of largely Asian entities and industries. And the same with Latino areas that have a continental air. The two that come to mind is Chinatown in San Francisco and the Mission District that while are popular tourist destinations were/are thriving communities for immigrants in which to live and work. Same with Mulberry street in Manhattan. But thanks to Gentrification the reality is that they are now changing and in turn losing their affordability and diversity. That happened to Jefferson street as it runs adjacent to Germantown and its increasingly whiter and higher prices. Head up north a couple of blocks it is being attempted on Buchanan. North Nashville does not have long until it too faces re-branding and in turn a change of color.

Food is the number one small business that many can own. Then there are franchises of larger well established fast food chains or other businesses that enable an individual to build a business without building a name. Ace Hardware is one such franchise and here in the Nashville area many shut down in the Eastern region when the owner failed to sell his stores. Ace had to intervene to save at least one store and in turn the others are closed. With that goes jobs and local shops that build community and accessibility without having to drive to a big box store. I recall when I worked at an Ace and the owner viewed himself as possibly opening a chain of urban Aces throughout Seattle. That failed and it is now closed as it sat too close to the shadow of Amazon and their push for growth. Rents and salary’s cannot be paid when business is an average of $10 bucks a sale. I tried to warn him that he needed to understand sales per square foot and operating costs, looking at sales in time frames to staff accordingly but he was having none of it, another rich kid with dreams of delusion. I ended up going back to Substitute Teaching full time as hours and morals got cut and I left hat in hand feeling bad watching dreams tank. Few of the people who worked there were happy from day one and the turnover within the first six months reflected it. Without a decent staff then it is just a store to buy batteries as when one thinks hardware one thinks knowledge. And as the owner had never worked in retail, never worked in hardware, no experience in anything even remotely connected but this is the tech and investor trade, they just know everything about everything.

And I saw this with the fitness joint across the street. The owner had delusions of grandeur and in turn chains of Rain fitness throughout Seattle. He too overextended and could not compete with the much bigger push in fitness which too has seen evolutions of change that change and in turn glut the market. He did non competes with staff, threatened lawsuits and tried integration with even Amazon and in turn had to sell some of his gyms. We have how many Ballet bar gyms? Intense fitness? Soul Cycles? Hot Yoga? The parallels are not lost here. The women who owned a chain of Barre’s in Seattle sold three of them right when I left Seattle as they were losing money, working 60 hours a week and exhausted. They own two now and they are much happier and saner. There comes a point when dreams of grandeur are ones of delusion.

Sound familiar? Donald Trump comes to mind.

Our local rag, The Tennessean, and our weekly, The Nashville Scene, have page after page on restaurant openings and reviews with each new opening akin to a christening. When I think of that I think of the Titanic and well we know how that turned out.

Restaurants be they franchises or chains or single shingles have success rates that vary upon region, the economic climate and in turn trends in food. The Restaurant Industry attempts to put forward a financial analysis that of course Wall Street uses to push or pull endorsements. We have seen their trends from Real Estate to Health Care and we know how well those worked out. Sort of like the Titanic, no?

And when I read this article (below) I was not surprised. One of the big issues not addressed is the rising tide issue of wages and health care. Most businesses are like the ones profiled, one person, one idea and they work the line for hours at a time. The fast food industry which relies on a patterned protocol are utterly different. The staff works the absurd minimum wage with no fixed schedules and the new trend of non-compete clauses built in a shitty hourly work-to-hire agreement so where one slings the fryer should be irrelevant but with few competing for said jobs that is the reasoning behind that. Fast casual is just one step above the drive through but they have faced their own serious health issues that once plagued the fast food industry. Jack-in-the-box vs Chipolte is a good example.

Then we have chains that much like the ones here throughout Nashville. Large investment groups that open a series of restaurants that have a chain feel but not and in turn are more flexible to industry changes and can fold up shop or change themes on a dime. The hospitality industry is huge here in Nashvegas and what few get that the second the joint offers table service and has a back of house the wage structure changes to the much LOWER federal minimum wage for food servers at least $2.13 per hour be paid to employees that receive at least $30 per month in tips. If wages and tips do not equal the federal minimum wage of $7.25 per hour during any week, the employer is required to increase cash wages to compensate.

So hence the limited service concept, where you order at a counter, the food is brought to you by a kitchen server who also prepares the food and in turn washes the dishes. Go to any “restaurant” here in Nashville that is the dominant food store and some have dishwasher/busser but they share duties with the barista’s and order takers who do the beverages and handle customer orders. It was something I had never seen before until I moved here but that is I suspect a cultural regional feature it is a blend between Panera and diner. It is odd but I am used to it now. I asked how much they earned and almost all make one to two dollars above minimum wage with tips. And for the record Southerners are known for not tipping. **For the record, I am a baby boomer, a woman, a Democrat and not Southern. I tip. Well not on Lyft as frankly when I am directing them and we are going a five minute ride where half the time I feel uncomfortable I don’t. But then with women drivers I almost always do. Sexist maybe?

So when you go out to eat forget the farm to table bullshit that is out of the average Americans price range and in turn interest, they are obsessed with quantity over quality and if they can somewhat combine the two then okay then! But trends in food can lead to over saturation and in turn decimation of those who were there all along just not as cool and in turn cannot front the operating costs that the new kid in town has fueled by all that new money. Gentrification comes with the food business and that marks the beginning of the end of the hood. Tastes change and so do those who live nearby. Then comes the accusation of cultural appropriation and in in reality there is some truth to that but also it is about money, who gets the loans and the funds and that is about access. Remember accessibility and availability are not the same. So while I applaud the team and Slim & Husky’s who are keeping in real and locating their second joint in Antioch in another largely black hood, they are few and far between. That is the key to success and building community, if it is good they will come but will they stay. That is another issue all together.

I quit eating out quite awhile ago. One as a woman I felt odd and hence fast casual would be a good fit. No. I do takeout and or delivery as now we can open that up thanks to the MANY MANY services that also glut the market. Postmates, Delivery Dash, Uber Eats which too cannibalize the market to the point of extreme. In Seattle we had Amazon Prime delivery and I loved it. But again there is a point of where one asks: When is too much, too much?

Thanks to Wall St., There May Be Too Many Restaurants

By RACHEL ABRAMS and ROBERT GEBELOFF
THE NEW YORK TIMES
OCT. 31, 2017

PLAINFIELD, Ill. — The way Marcus Mooney saw it, he wasn’t just selling hot dogs — he was selling experiences.

In addition to the classics — a cheese dog and a chili dog — his restaurant, Frank’s Night Out, served hot dogs topped with more exotic ingredients, like a “Surf & Turf Dog” featuring crumbles of garlic-basted Maine lobster.

But the hot dog experiences Mr. Mooney offered were just one choice among hundreds for hungry motorists seeking a quick, inexpensive meal on this restaurant-laden stretch of Illinois Highway 59. His sales dropped. After opening his restaurant in 2013 and putting in seven-day work weeks, Mr. Mooney shuttered it last year.

“There becomes a point where there’s too many choices,” Mr. Mooney said recently. “The more restaurants that opened up, the more it took away from business for us.”

After a prolonged stretch of explosive growth, fueled by interest from Wall Street, experts say there are now too many fast-food, casual and other chain restaurants.

Since the early 2000s, banks, private equity firms and other financial institutions have poured billions into the restaurant industry as they sought out more tangible enterprises than the dot-com start-ups that were going belly-up. There are now more than 620,000 eating and drinking places in the United States, according to the Bureau of Labor Statistics, and the number of restaurants is growing at about twice the rate of the population.

That trend is evident on a more local level here in the sprawling suburbs southwest of Chicago, where the population is growing fast, but the number of restaurants is growing even faster. Twenty years ago, Mr. Mooney would have been competing against about 600 eateries in the region; by the end of last year, that number had more than doubled.

“Everybody thinks their brand has what it takes to succeed in the marketplace,” said Victor Fernandez, an industry analyst with TDn2K, a Dallas-based firm that gathers data on the chain restaurant industry. “You look at a location that looks good, but everybody is looking at the same place and they all come in, and the result is you get oversaturation.”

The glut of restaurants has increased the pressure on individual restaurant owners. Industry sales are up nationally, but growth has slowed to the lowest rate since 2010.

Customers continue to spend a large share of their food budget in restaurants, but they’re spreading the money across a larger number of establishments, so profits are split into smaller individual pieces. Yet the industry — particularly chain restaurants — continues to expand, a strategy that both masks the problem and makes it likely that more places will falter.

Sales at individual chain restaurants, compared with a year earlier, began dropping in early 2016, analysts reported. A majority of restaurants reported sales growth in just four of the last 22 monthly surveys from the National Restaurant Association. Before that, most restaurants had reported growth for 20 consecutive months, from March 2014 through October 2015, the survey found.

As Americans work longer hours and confront an ever-growing array of food options, they are spending a growing share of their food budget — about 44 cents per dollar — on restaurants, according to food economists at the United States Department of Agriculture Economic Research Service.

But while consumer demand contributed to the restaurant boom, it was changes on Wall Street that really fueled the explosion. Chains like Del Taco, Papa Murphy’s and others began attracting money from private equity firms, and banks like Wells Fargo and Bank of America saw lending opportunities in the restaurant industry.

Those developments complemented each other well. New fast-food investors wanted to rely less on owning restaurants, and offloaded many company locations to eager buyers who came with bags of cheap money from the banks. The investors could then count on a steady stream of franchise fees and royalty payments — buffers against overall sales declines if, say, the market ever became oversaturated. And they didn’t have to worry about actually operating the restaurants.

Franchisees pay for the right to operate a McDonald’s or a Subway, following rules that dictate everything from what type of taco to sell to where to buy iceberg lettuce. They take on the risks and costs of running the restaurants, in exchange for the marketing muscle and name recognition these big companies provide. While every Dunkin’ Donuts or Taco Bell may look the same, dozens and sometimes hundreds of independent owners can operate most of the restaurants within a single brand.

But some franchisees say they’re being pressured to open too many stores as food companies push for new revenue streams. Buying an existing restaurant, for example, may mean agreeing to build 10 new ones.

“They want us to sign aggressive development agreements,” said Shoukat Dhanani, the chief executive officer of the Dhanani Group, which owns hundreds of Burger King and Popeyes restaurants. “I didn’t see that even five years ago.”

The shuttering of restaurants could have a major impact on the labor market. Since 2010, restaurants have accounted for one out of every seven new jobs, and many restaurateurs complain that it has become increasingly difficult to hire and retain workers. In Muscogee County, Ga., a former textile center, the Labor Department reported an overall decline in employment of 2,000 jobs since 2001 — but a gain of 2,700 restaurant jobs.

Those positions could be in jeopardy if sales continue to fall and force more restaurants to close. Over the summer, the parent company of Applebee’s announced it would close more than 100 locations. In 2016 Subway, the nation’s largest fast-food chain by location count, closed more locations than it opened, the first time in its history that had happened.

“Year over year, we are seeing chain restaurants grow at twice the rate of overall population growth,” said Mr. Fernandez, the TDn2K analyst. “We believe now there are probably too many restaurants and too many brands.”

In this business environment, restaurant owners are often risking their personal fortunes when they open a Pizza Hut or create their own idea for a restaurant, like Frank’s Night Out.

Melissa Arcache also plowed her life savings into her dream of running a successful restaurant. She now owns three branches of Bahama Buck’s, an island-themed frozen dessert chain decorated with surfboards and novelty mileage signs listing the distance to Bermuda and the Bimini Islands, in the Houston area.

Even before Hurricane Harvey hit Texas, Ms. Arcache was struggling. Sales in August were down 10 percent from last year, and business fell further after the storm. She looks at all of the competitors opening up shop nearby and wonders what she can do.

She said she doesn’t have a Plan B.

“This is what we’re going to make work,” Ms. Arcache said during an interview at her store in Houston, which was recently vandalized, leaving behind dents in the walls she has yet to patch up. “This is what’s going to feed my future kids and hopefully get them through college,” she said.

Mr. Mooney also put his life savings into his restaurant, Frank’s Night Out, only to see it fail. His personal life suffered, too — he was married when Frank’s opened but divorced by the time it closed.

He now works as head chef for a company that owns a brewery and restaurant in the same strip mall where Frank’s Night Out was located, and passes by his old restaurant on his way to work.

Transformed into a beef and gyro shop, the new establishment sells one of the items he created, a hot dog wrapped in bacon and topped with macaroni and cheese, lettuce and tomatoes. It even has the same name — the “Deep South Dog.”

At first, Mr. Mooney said, he felt relief when he looked in and saw few customers. “It allows you to think that the failure of it was not you,” he said.

But nine months later he’s rooting for the new restaurant to succeed.

“Now it’s kind of like, oh, man, I’m glad people are going in,” he said.

Can I take your order?

August 23, 2016 T.T.

Well the narrative seems to focus on food, be it the raising wages of fast food workers, the farm to table movement, or the fact that it has now become an era of fast casual versus chic dining. I loathe them all.

The last time I went out was to the Ryman to see Bill Maher, I had a 8 dollar Turkey Sammie and a 12 dollar glass of wine. Neither were that great. Well the wine was fine the sammie just average. I go there everyday and have a $4.00 coffee, occasionally a bagel for a total of $10 bucks. Throw in a tip and that is my budget for going out to eat.

I went to a sit down restaurant and sat in the bar, it was over $40 dollars for a veal chop, 2 glasses of wine and a salad. It was just okay.

I don’t have any reason to go out to dinner frankly as it is boring, expensive and not that good. I love ethnic food that while I can cook at home having it done by the people who for them is not ethnic makes the difference. I spent $40 on Indian takeout and for that I got 2 days worth of food. The same goes for any Asian cuisine. I am not a fan of Mexican food yet all the components I like so I do a variation at home. I do not eat fast “casual” and when I moved to Nashville I did some of the local places for a couple of days while I was Air BnBing up the road. It was cheaper and I could sit in my pj’s and watch TV versus sit at a bar or at table, alone being bored spending money for food I could make at home.

I happen to love to cook. True not every day and I do enjoy having food made for me but I still prefer taking it home,putting it on my china, wearing pjs and watching a movie. I spend premimum on my home so I want to get the money’s worth that it entails. If I lived in a 10 x 10 studio I see going out and would do so. But that adds up and eventually that money could be spent finding a place more suitable. But when you are young and the pods offer $500 rent you think “deal” and those costs are itemized and accountable but are your daily coffees, snacks, lunches, etc? I went through and itemized all my costs on my coffees and they were hitting over $50 bucks a week. And the coffees like the food were not all that great. I have been thinking that while I pay to get out of the house and that is really the prime motivator to get out for an hour, shoot the breeze with the staff or maybe someone sitting next to me at a table (which like the coffee has varying consistency of quality) is important for my mental health and need for socialization.

That is an entire whole other issue being a woman of a “certain age” who has no family, friends and ostensibly works in day labor (that is a substitutes teachers real gig) so meeting my peers is next to near impossible. The other option is joining a Church or a Meetup group. I am on the latter right now and that will do until I decide what and if actual organized religion will have to step up to fill the gap. I am a person of faith but there is something about confinement and the idea that I can’t drop in and out to a church of the day to find my soul and appreciate that as sufficient. Again it shows I have massive commitment issues and in turn explains why I gravitate to “temp” gigs, do not network or even know how to make friends let alone long lasting relationships. But irony, pun intended, I am not alone in that.

And what is interesting is in my conversation with a Barber in East Nashville I commented on the massive gentrification that is happening all over Nashville. Some areas are more advanced, some are higher end but there is no shortage of housing developments and new building developments all over the city. But the odd thing is there is no infrastructure to support it and no services which to accompany it.

There are few walkable neighborhoods in Nashville and the one they seem most proud of since the growth of the city is The Gulch. They serve it via a free bus although a regular MTA goes through it and there is nothing there but restaurants and an odd outpost of a small natural bodega that has a much larger outpost in East Nashville – the Turnip Truck. Well if I lived in the million dollar apt/condos there and this was my only grocery store option I would live with it but then again the West End which hotel after hotel, new apartments and a busy corridor has an aged Piggly Wiggly, so it could be worse.

So I see that focus on restaurants are a key especially to a town that thrives on tourism and education as their prime destinations. But to thrive and grow the jobs that accompany them must be sufficient and pay living wages in order to be sustainable. That is not the case here. I see this as a long term problem with housing not commensurate with wages and that the car culture and costs that it entails another.

Nashville is a boom town with immense potential but the haphazard manner in which it is done is distressing. When the focus is on restaurants and fast food there is a transient factor, the idea that this is right to work state with little labor organization nor ability to do so it also affects that industry. So if anyone thinks it is the rising costs of labor that is causing food prices to rise may be somewhat right but this is an industry that has always paid people even below the minimum wage as allowed by law, forcing tipping for low level to inadequate service and add to that the handling of food that the supposed bastion of the industry Chipolte learned the hard way.

I believe that eating out is largely due to irregular schedules, endless hours commuting, families working two jobs and few to little opportunities to shop for affordable healthy food. I should know as here in Nashville the two walkable hoods one is not even in Nashville. I go by 30 minutes on a bus to Whole Foods in Green Hills or I rent a car on weekends (car sharing is not fully realized – yet) to shop for foods. Even the Kroger there is high end while those in Nashville seem to lack. Again that is due to the historical concept of Nashville being a low rent area, there are huge housing projects in almost all the hoods in the immediate areas other than Hillsboro and West End. Why? Vanderbilt.

There are many many plates juggling here in Nashville and I admire their ability to see the future and it is bright. I have such faith and hope but at times one feels very alone and yes lonely when you try to find your place in a new place. But maybe one day I will go out and eat a meal even alone and like it.

So when I read the below article my first thought was have you seen the empty storefronts and businesses with the idea that it could work as a restaurant? I see that everywhere here. They closed a Dollar General in downtown Nashville yet it has no Department Store, Specialty Stores, more than one drugstore, no dry cleaner, no movie house – NOTHING but bar after bar. Yikes. So if this is so then the entire food service industry relies on Tourists as any of the residents of the growing area are not going out every night, are they? And that economy does not sound sustainable for the all that are coming here. Not all of us want to be in hospitality. And the other economy – the sharing one – well that fuels Lyft, Uber, Postmates, Grub Hub and all of that is about what – getting somewhere as the bus doesn’t serve us or bringing us what – food. Add to that the endless quasi food delivery/cooking school for the home, such as Blue Apron, that enables people to stay home for less. It is the circle of life and Nashville and that is not one I can see myself living in for the long haul if they elect to ignore a downtown core of services and infrastructure to sustain them. It will go back to be NashVegas and home to Colleges and Universities with an endless revolving door, and most restaurants do, it is often the employee entrance however.

A ‘restaurant recession’ sounds scary. Are we really on the brink of one?
By Sarah Halzack The Washington Post August 22 2106

In the past several weeks, the picture that we’ve gotten of the restaurant industry hasn’t exactly been a promising one. Dunkin’ Donuts saw traffic slip at its U.S. locations in the latest quarter. Potbelly Sandwich Works said it expects to be challenged by a “more cautious consumer” in the near future. And McDonald’s said its sales were hampered by a broad-based retreat from dining out.

Talk of a “restaurant recession” has been percolating on the Internet after an investment bank analyst used the provocative phrase in a research note to describe where the dining industry — and the overall economy — might be headed. So what’s going on here? Here, we break down a few popular theories.

Theory 1: This is an early, foreboding sign that consumers are starting pull back on their spending. This is the most frightening of the possibilities, because if it’s right, it suggests the broader economy could be poised for slowdown. But it’s also the explanation that seems toughest to prove.

Let’s start with the factors that are causing the hand wringing. For one, restaurants have been one of the bright spots of the broader retail industry for years now, but recent data suggests business is getting gloomier. NPD Group, a market research firm, found that visits to fast-casual eateries fell in the most recent quarter for the first time since it began tracking them in 2004. Trade publication Nation’s Restaurant News found that sales at publicly traded restaurants saw a median decline of 1.7 percent in the second quarter.

There’s some anecdotal evidence, too, that seems discouraging. Michael O’Donnell, the chief executive of the parent company of Ruth’s Chris Steak House, told investors in late July that its a la carte dining business is struggling. Unlike its happy hour or private events business, that area is usually fueled by what he called “aspirational” diners, the ones who might go to the steakhouse for a birthday or anniversary dinner.

Mark Kalinowski, a restaurant industry analyst for Nomura, said he believes restaurant sales can offer the earliest hints of an economic downshift.

“How you eat and what you’re spending money on to eat tends to be a very real-time decision by literally hundreds of millions of people,” Kalinowski said.

But before you start fretting that economic storm clouds are forming, consider that there are plenty of other indications these fears are overblown. Healthy consumer spending is what powered GDP growth in the second quarter. The National Retail Federation recently bumped up its forecast for industry-wide growth for the year, saying factors such as high consumer confidence drove the decision. And then there’s the fact that some retailers have seen shoppers coming out in full force. Home Depot recorded a 6 percent increase in revenue this quarter, and sales were up 8.1 percent of items that cost more than $900. TJX Cos., the parent of T.J. Maxx and Marshalls, saw total sales soar 7 percent. Within the restaurant industry, Domino’s Pizza and Papa John’s had a solid quarter.

Theory 2: Grocery shopping is looking like a good deal right now. According to data from the Bureau of Labor Statistics, prices for “food at home” — a proxy for grocery store prices — fell 0.2 percent in July and have declined 1.6 percent over the last 12 months. Meanwhile, the “food away from home” category has seen prices move in the opposite direction: They notched up 0.2 percent last month and 2.8 percent over the previous year.

Executives from McDonald’s, Wendy’s, and Jack In the Box each mentioned this pattern on their most recent earnings calls because they believe the wide gap in prices was a challenge to their sales in the most recent quarter. And it indeed seems plausible that some shoppers saw such good comparative value at the grocery store, they might have backed off from eating out. Plus, big chains such as Whole Foods Market are making a push around prepared foods, which offer more direct competition to quick-service and fast-casual restaurant players.

Theory 3: These earnings reports aren’t capturing the full picture. Of the 25 largest restaurant brands in the United States this quarter, Kalinowski said only one likely posted an increase of 5 percent or better in sales at restaurants open more than a year. That would be lowest number of restaurants hitting that threshold in any quarter so far this decade, Kalinowski said.

But that doesn’t necessarily mean things are looking rough out there. It just means business is tough for those particular mega-brands. It doesn’t tell us much about how regional players or independent outposts are faring. Think about these dynamics in the D.C. area: Local favorites Sweetgreen and Cava Grill have been opening shops rapidly across the region. When you started adding one of those spots to your regular lunch or dinner rotation, it probably came at the expense of dollars you used to spend somewhere else — Chipotle, perhaps, or Panera Bread.

“Ultimately, consumers are spreading their purchasing across a broader range of brands,” said Darren Tristano, president of restaurant research firm Technomic.

And then there’s the customers who are lining up at Bad Saint or scrambling to get a reservation at Pineapple & Pearls. The earnings of the big restaurant companies do little to illuminate what is going on with these experience-oriented consumers, who are dining out almost as a hobby.

A ‘restaurant recession’ sounds scary. Are we really on the brink of one?
By Sarah Halzack August 22 at 7:00 AM

A Dunkin’ Donuts restaurant. (Susana Gonzalez/Bloomberg)

Mark Kalinowski, a restaurant industry analyst for Nomura, said he believes restaurant sales can offer the earliest hints of an economic downshift.

“How you eat and what you’re spending money on to eat tends to be a very real-time decision by literally hundreds of millions of people,” Kalinowski said.

“Ultimately, consumers are spreading their purchasing across a broader range of brands,” said Darren Tristano, president of restaurant research firm Technomic.

One Hand Washes Another

February 10, 2014 T.T.

I have long lamented about the fraud and duplicity that has resulted from the excessive number of “not for profits” engaging in a for profit related activity/industry, while declaring tax breaks and attaining governmental funding and grants for largely doing political work.

And and on that note, another research think tank activist group often cited for their studies regarding economics, comes this one about their lobbying efforts to stave off demands for increasing minimum wage.

Now we have many organizations that are tied to the Philanthropists who in turn fund their pet projects, lobby on their behalf and are quite open about it. Then we have those in such illustrious groups that fund several groups will varying names but the same goals and aspirations, run by third parties and we are not given disclosure information nor any subsequent tax filings as it is not required by law.

I like this one as it has no actual office, staff or any real address. It in fact “shares” the space with the man who does all their public work as a “contracted” employee, Mr. Richard Berman. Reading his interesting resume does make one imagine the whole “up by your bootstraps” mantra so advocated by the right hand squad nor is this the first time this group has appeared in the Times with regards to the issue.

And while many small businesses are concerned about a wage hike, this group seems to be the most well connected and ambitious in their efforts to derail an increase in our minimum wage. And if it means concocting studies that extrapolate or eliminate data to ensure the desired outcome, so be it.

And of course it centers around the restaurant industy. And this is one business and industry with deep pockets and a concern as the issue is one that across the country has traction and support. They have done their best to vilify those who are active in the movement and gone to court in cities like Sea Tac who have already shown that the voters agree.

Buy there is a general concern by business admitting there is a deterioration by the working and middle class that are killing their core businesses. From Applebee’s to Sears those once bastions with a clear customer base may find themselves with a door closed for business, for good. And yet the idea and concept of rising wages and in turn encouraging growth and spending is discouraged. Teeth meet the hand.

Numbers don’t lie but the people who actually calculate them….

Fight Over Minimum Wage Illustrates Web of Industry Ties

By ERIC LIPTON
FEB. 9, 2014

WASHINGTON — Just four blocks from the White House is the headquarters of the Employment Policies Institute, a widely quoted economic research center whose academic reports have repeatedly warned that increasing the minimum wage could be harmful, increasing poverty and unemployment.

But something fundamental goes unsaid in the institute’s reports: The nonprofit group is run by a public relations firm that also represents the restaurant industry, as part of a tightly coordinated effort to defeat the minimum wage increase that the White House and Democrats in Congress have pushed for.

They do it with the gloss of research, and play a critical and often underappreciated role in multilevel lobbying campaigns, backed by corporate lobbyists and labor unions, with a potential payoff that can be in the millions of dollars for the interests they represent.

“It is the way of Washington now — and that is unfortunate,” said John Weaver, a Republican political consultant who has helped run several presidential campaigns. “Because if it’s not dishonest, it’s at least disingenuous.”

In this case, the policy dispute is over whether increasing the minimum wage by nearly 40 percent to $10.10 an hour within two and a half years would reduce poverty or further it.

Even if the legislation never passes — and it is unlikely to, given the political divide in Congress — millions of dollars will be spent this year on lobbying firms, nonprofit research organizations and advertising campaigns, as industry groups like the National Restaurant Association and the National Retail Federation try to bury it. Liberal groups, in turn, will be spending lots of money as they try to make the debate a political issue for the midterm elections.

The left has its own prominent groups, like the Center for American Progress and the Economic Policy Institute, whose donors include nearly 20 labor unions, and whose reports, with their own aura of objectivity, consistently conclude that raising the minimum wage makes good economic sense. But none has played such a prominent and multifaceted role in recent months as the conservative Employment Policies Institute.

The Employment Policies Institute, founded two decades ago, is led by the advertising and public relations executive Richard B. Berman, who has made millions of dollars in Washington by taking up the causes of corporate America. He has repeatedly created official-sounding nonprofit groups like the Center for Consumer Freedom that have challenged limits like the ban on indoor smoking and the push to restrict calorie counts in fast foods.
In recent months, Mr. Berman’s firm has taken out full-page advertisements in The New York Times and The Wall Street Journal and plastered a Metro station near the Capitol with advertisements, including one featuring a giant photograph of Representative Nancy Pelosi, the California Democrat who is a proponent of the minimum wage increase, that read, “Teens Who Can’t Find a Job Should Blame Her.”

These messages, also promoted on websites operated by Mr. Berman’s firm, including minimumwage.com, instruct anyone skeptical about the arguments to consult the reports prepared by the Employment Policies Institute, most often described only as a “nonprofit research organization.”

But the dividing line between the institute and Mr. Berman’s firm was difficult to discern during two visits last week to the eighth-floor office at 1090 Vermont Avenue, a building near the White House that is the headquarters for both.

The sign at the entrance is for Berman and Company, as the Employment Policies Institute has no employees of its own. Mr. Berman’s for-profit advertising firm, instead, “bills” the nonprofit institute for the services his employees provide to the institute. This arrangement effectively means that the nonprofit is a moneymaking venture for Mr. Berman, whose advertising firm was paid $1.1 million by the institute in 2012, according to its tax returns, or 44 percent of its total budget, with most of the rest of the money used to buy advertisements.
Disclosure reports filed by individual foundations show that its donors in recent years have included the Lynde and Harry Bradley Foundation, a longtime supporter of conservative causes. Mr. Berman and Mr. Saltsman would not identify other donors, but did say they included the restaurant industry. But its tax return shows that the $2.4 million in listed donations received in 2012 came from only 11 contributors, who wrote checks for as much as $500,000 apiece.

Mr. Saltsman, 30, who has an undergraduate degree in economics from the University of Michigan and previously worked for the federal Bureau of Labor Statistics, drafts dozens of letters to the editor and opinion articles for newspapers, arguing that increasing the minimum wage would hurt more than help. Other special institute projects included a recent survey of lawmakers who support the minimum wage increase asking if they pay their interns — a report The Daily Caller, a conservative online publication, then released, calling out the lawmakers with unpaid interns as hypocrites.

The major reports released by the institute are prepared by outside academics, like Joseph J. Sabia, an associate professor of economics at San Diego State University, who has collected at least $180,000 in grant money from Mr. Berman’s group over the last eight years to deliver seven separate reports, each one concluding that increasing the minimum wage has caused more harm than good — or at least no significant benefit for the poor.

“There is never a good time to raise the minimum wage,” Mr. Sabia said at a briefing in the Longworth House Office Building late last month that was co-sponsored by the institute, as he laid out the findings of his newest report to Capitol Hill staff members and reporters. “You are not reaching the poor workers you want to help.”

Mr. Sabia said in an interview late last month that his research conclusions were developed independently. “I don’t write advocacy policy briefs,” he said. His papers are also submitted to academic journals, which publish them after a peer-review process — a standard, he noted, that publications put out by left-leaning groups like the Economic Policy Institute often do not meet.

What is clear is that the reports by the Employment Policies Institute are a critical element in the lobbying campaign against the increase in the minimum wage, as restaurant industry groups, in their own statements and news releases, often cite the institute’s reports, creating the Washington echo chamber effect that is so coveted by industry lobbyists.
“Once you have the study, you can point it to it to prove your case — even if you paid to get it written,” said one lobbyist, who asked not to be named because his clients rely on him to use this technique.

But some questions have been raised about the institute-funded work. Saul D. Hoffman, a professor of economics at University of Delaware, examined the employment data Mr. Sabia used for a 2012 paper funded in part by the institute. Mr. Hoffman concluded that the narrow cut of data Mr. Sabia picked was perhaps unintentionally skewed, and once corrected, it would have showed that the 2004 increase in New York State’s minimum wage had no negative impact on employment — the opposite of the conclusion the institute had proclaimed in its news releases.

Mr. Berman, 71, a onetime auto mechanic turned labor lawyer and restaurant industry executive, rejected any suggestion that his reports were based on bias or faulty data.
“I get very upset when people say we are putting out junk science and twisted economics, because that happens to be our criticism of other people,” Mr. Berman said in an interview at his office. Yet internal company documents show that members of Mr. Berman’s team — at least when they have been involved in some of the other corporate-backed projects — have discussed ways to massage academic data to change outcomes.

For example, an academic study published by researchers at the University of Southern California concluded that soda had higher concentrations of high-fructose corn syrup than advertised. Mr. Berman’s team, hired by the corn refining industry to defend its sweeteners, mobilized staff at his Center for Consumer Freedom to challenge the results.

“If the results contradict U.S.C., we can publish them,” said an email sent to Mr. Berman and other staff in October 2010 from a Berman employee at the time, referring to the University of Southern California report. The exchange became public recently as a result of a lawsuit between the sugar and corn refining industries. “If for any reason the results confirm U.S.C., we can just bury the data.” Mr. Berman said that the employee who wrote that email left more than a year ago and that such practices were not allowed at the institute.

Left-leaning groups like the Citizens for Responsibility and Ethics in Washington have filed legal complaints, arguing that the large payments to Mr. Berman’s for-profit firm may violate the law, an accusation that Berman and Company strongly disputes.

What is most important, said Lisa Graves, the executive director of an organization responsible for the online publication PR Watch, is that newspapers detail Employment Policies Institute’s corporate ties when they cite research it publishes. Such disclosure happened in less than 20 percent of the cases over a three-year period, an analysis by PR Watch found.

“They are trying to peddle an industry wish list, but mask it as if they are independent experts,” she said. “They are little more than phony experts on retainer.”