Friday, March 23, 2007

Fray by the Bay: Who'll Pay?

San Francisco’s restaurants are squaring off with the city, and the fight is turning decidedly ugly. A story in today’s San Francisco Examiner said the local trade plans to shut for a day to give residents a taste of what their town would be like without its celebrated eateries. It might even spring the lockout as a surprise, Kevin Westlye, head of the Golden Gate Restaurant Association, told the newspaper. Participants might choose a day when the city is packed with conventioneers, who’d be caught by surprise, without the fallback of their home kitchens.

The notion grew out of a meeting last week by an estimated 100 restaurateurs, who gathered to consider responses to recent cost increases that have been foisted on local businesses, including a wage hike (to $9.14 an hour) and a mandate to provide paid sick leave.

The possibility of a shutdown drew a slap from a proponent of the sick-leave measure. “They’re having a two-year-old tantrum, embarrassing themselves and San Francisco,” supervisor Tom Ammiano said of the town’s restaurants.

The story also resurrected earlier local press reports that restaurants there are considering the widespread adoption of a service charge, an extra fee that would be automatically tacked onto guests’ checks. After a local business paper suggested the restaurants might act in concert to lessen the chances of a public backlash to a surcharge, industry leaders were quick to refute the assertion, noting that such a thing could run afoul of anti-trust regulations. They apparently feared accusations that the eateries were fixing prices.

In today’s Examiner story, Westlye is cited as saying that restaurants have indeed considered a service charge of 3 to 5 percent. “If all we do is raise prices, the public would just think we’re being greedy restaurateurs,” he’s quoted as saying.

Walk-offs and shutdowns have not worked well for restaurant staffers in the last few decades. A strike by restaurant and hotel employees in New York City in the 1980s was seen as a pivotal moment in industry labor relations, with the trade’s main union almost universally cited as the loser in that confrontation. The outcome was the same in a strike in Las Vegas.

But a strike by restaurant owners? Only in San Francisco. Or at least that’s what we all should hope.


Anonymous Ryan said...

Just for the record, the Examiner was preceded on this story by myself at the Business Times and then later by the SF Chronicle.

Petty credit issues aside, it is interesting more notice is being taken of this issue on a national level. I enjoy your blog.

March 23, 2007 at 7:04 PM  
Anonymous Steve Sommers said...

Hmmm, the cronies running the city can scheme and mandate the restaurants to death but if the restaurants fight back it’s falls under anti-trust. Anyone else see anything wrong with this picture? I guess the only missing mandate is a hefty fine for restaurants leaving the city or going out of business - that’ll close that little loop-hole.

March 26, 2007 at 10:55 AM  
Anonymous Anonymous said...

As a close watcher of the SF restaurant scene, this type of uninformed and overzealous legislation is already having a deadening effect on one of the country's greatest restaurant cities. Many restaurant owners have taken their businesses to other cities on the Peninsula and East Bay. The drought of new and innovative restaurant openings is already being felt. Supervisor Ammiano (I'm ashamed to say he's from my district), and others need to realize that they are killing this vibrant community. What will his constituents do when there are no restaurants left to pay servers $9+ an hour before tips? The supervisors seem to forget that employers need to stay in business in order to cover sick leave and healthcare.

March 26, 2007 at 11:54 AM  

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