Shake Shack founder calls for $15 an hour minimum wage in New York restaurants

Danny Meyer believes it’s in the interests of business to pay workers more as staff shortages continue across US

Oliver O'Connell
New York
Wednesday 20 October 2021 22:23
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Danny Meyer, the New York restaurateur and founder of the Shake Shack chain of burger outlets, has joined calls to raise the minimum wage in restaurants to $15 an hour, reiterating his support for fairer pay in the industry.

Mr Meyer believes that paying people “the right amount of money” is in the interests of business and wants New York Governor Kathy Hochul to act.

“I don’t know that I’ve seen anything that is more in our self-interest as a business,” said Mr Meyer.

“We can solve this and in the end, it is in our self-interest to do the right thing. And I believe Governor Hochul sees this.”

Restaurants, and the hospitality industry as a whole, are going through a staffing shortage in the aftermath of the pandemic as millions of Americans have not yet returned to work, holding out for better wages or conditions.

During the pandemic, hospitality workers suffered greatly as millions were laid off when their places of employment were shuttered as part of state lockdowns.

Raising wages to $15 an hour might go some way to attracting people back to work in an industry that is famously low-paid in the US, with many workers relying on tips.

Despite efforts by progressive Democrats to increase it, the federal minimum wage has remained at $7.25 an hour since 2009, but for tipped workers, it is a shocking $2.13 in most states.

Mr Meyer joins a host of politicians and activists determined to raise wages in the hospitality industry.

On Tuesday he was present at the launch of the book One Fair Wage by Saru Jayaraman, Bloomberg reports.

Ms Jayaraman is president of the One Fair Wage organisation, which campaigns for higher pay.

She notes that hundreds of New York restaurants have already brought wages up to $15 an hour with tips to help with recruitment during the staffing shortage.

One Fair Wage reports that by May 2021, 53 per cent of employed restaurant workers surveyed by the group reported that they are considering leaving the industry, 76 per cent of that number said they were leaving due to low wages and tips.

More than three-quarters said they would only stay if their job provided a full, stable, liveable wage with tips on top.

Thousands of restaurants have already boosted wages to attract new workers and retain existing staff. Mr Meyer and Ms Jayaraman want New York state to enact legislation to make it law, arguing that it will help the local food industry.

Speaking out against the wage increase, the National Restaurant Association said in a statement earlier this year that a nationwide increase will “create insurmountable costs for many operators”.

In November 2015, Mr Meyer’s Union Square Hospitality Group said it would overhaul its pricing structure by increasing menu prices to better remunerate staff, and eliminate tipping.

The practice, known as “Hospitality Included”, was rolled out across the group’s fine-dining locations including The Modern, Gramercy Park Tavern, and Union Square Cafe, and was largely welcomed by the industry.

The practice ended in July 2020 as restaurants reopened for outdoor dining after the first wave of the pandemic and businesses had to cope with ongoing uncertainty as to when things might return to normal.

​​“It’s against that precarious and unpredictable backdrop that we are concluding the chapter on Hospitality Included, and reopening with tips, all the while advocating for policy changes that will introduce much-needed equity into the compensation system,” Mr Meyer wrote at the time.

Mr Meyer gave kitchen staff a 25 per cent pay increase and bowed to try to persuade lawmakers to change the existing rules about tip-sharing.

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