The Social Justice Upcharge

Pete Wells was caught in a bind. He couldn’t complain about the mission.

To start, they intend to build a network of small restaurants that people in some of the country’s poorest, most neglected urban neighborhoods can afford. Beyond that, though, the chefs hope that their example of progressive labor practices, interior design attuned to the pulse of the city and cooking that shows responsibility for the health of both customers and the environment will spark a reformation of the fast-food industry.

The only problem was the food sucked.

“I’ll have the chicken noodle soup,” I said.

“It’s actually chicken no-noodle soup,” the woman at the counter answered, as nicely as possible. “It’s got rice, not noodles.”

It turned out there wasn’t any chicken in it, either.

At least it was better than the chile.

This was less like chili than like a slightly spicier version of the meat sauce my corner pizzeria pours over penne. Supermarkets sell canned chilis that are seasoned more persuasively.

Wells gave LocaL zero stars. Apparently, when it comes to restaurants, mission doesn’t count as much as food to Wells. LocaL’s chef/owner Roy Choi gave what Tasting Table called the “perfect response.”

I welcome Pete’s review. It tells me a lot more about the path. I don’t know Pete but he is now inextricably linked to LocoL forever. So I’ll share with you what I wrote to a friend and our team. We got that PMA: “The truth is that LocoL has hit a nerve. Doesn’t mean all people love it, some hate it. But no one is indifferent by it. That’s the spirit of LocoL. It has nothing to do with my ego. It’s something bigger than all of us. Pete Wells is a component to its DNA. His criticisms are a reflection of us and the nerve that LocoL touches. And our imperfections. Also the nerve of challenging the binary structure of privileged thought patterns and how life is not just about what’s a success or failure, but some things are real struggles and growth journeys.

Not that it’s entirely clear to me, but to the extent I understand what this perfect response is saying, you’ve got to suck up sucky food if you want to challenge the “binary structure of privileged thought patterns.” The menu is divided into “$5 ‘burgs’ and $7 ‘bowls.'” You would think they could make a decent “burg” for $5, but then, the Lincoln gets spread a little thin when it has to pay for the mission as well as the gluten-free ground beef substitute.

Restaurants in San Diego, on the other hand, will only pay for the mission begrudgingly.

In a stunning and rapid response, San Diego officials are going to crack down on restaurants that add surcharges to customers’ bill in response to recent minimum wage hikes.

As we just reported, some San Diego restaurants have added a new surcharge of 3-5 percent on meals because of the city’s increased minimum wage that went in effect on New Year’s Day.

Now, the city’s attorney Mara Elliott says restaurants are violating the law by stating on the bill that the surcharge is the result of government mandates and by not divulging the charge to customers before they order. Apparently, this violates California’s false advertising provisions. These restaurants are being threatened with legal action by the city if they don’t cease and desist.

The city makes a valid point. If you advertise one price, say a $5 “burg,” then you need to deliver a $5 “burg.”  San Diego restaurants, however, are taking their menu prices and then taking on a surcharge. Who do they think they are, phone companies?

This is a means of protest, as well as a means of covering the cost, of the San Diego minimum wage hike. If San Diego wants to increase minimum wage, and its citizens are good with it, so be it. But people expect the increase in cost to magically disappear, subsumed by the businesses profit margin and not get passed along to the consumer. Business owners, on the other hand, aren’t thrilled at the idea of them eating the mandate. If citizens want to increase the minimum wage, then citizens have to eat the increase in price. They’re not running charities, but businesses.

The surcharge may be intended as a protest, a means of shoving it down the consumer’s throat that their support for higher minimum wage going in means higher prices coming out. Except you can’t sandbag people to make your protest hurt. If you advertise a $5 “burg,” then deliver a $5 “burg,” not a $5 “burg” plus a surcharge. Unless you’re a telephone company.

To be clear, the new surcharge is not illegal, but the city doesn’t like the bad PR that’s it’s generated is probably afraid of scaring away customers and visitors to city. It’s really coming down to word choice, because the city attorney says that the restaurants can legally describe the surcharge as a response to a government mandate, but not as a government mandate.

There is no law prohibiting restaurants from increasing prices to cover increased expenses. But San Diego takes issue with calling it a government mandated surcharge, as if the law required them to impose it. The law may necessitate it, but certainly doesn’t require it.

The city is trying to do damage control, but instead of reassessing the aggressive minimum wage hike they are blaming the unintended – but not unexpected – effects  on the business community. What better a way to galvanize citizens behind misguided policy then to make businesses and employers the villains?

That’s unfair. Restaurants may well want to protest, but misstating prices and claiming it’s a government mandated charge is untrue. There’s nothing wrong with the truth, or passing along the charge, but doing so honestly isn’t vilifying restaurants. It’s just not being honest. Unless you’re a telephone company.

There’s a mission. There’s food. There’s costs and profits. The old Iron Triangle taught, “fast, cheap or good, pick two.” The new trio is cheap, good or socially just. And remember, as much as you can make a choice for yourself, you can’t force other people to agree with your pick of two.

42 comments on “The Social Justice Upcharge

  1. Keith

    There’s a piece of information missing here. The The IWF piece says: “Many of these diners did not learn of this so-called surcharge – which is not mandated by any governmental entity – until they received their check.”

    That seems to indicate that some learned about the surcharge ahead of time. Was it printed somewhere on the menus? Displayed prominently in a place people ignored it?

    If so, I have far less sympathy for the emptors* involved here.

    * I’ve been told everything sounds better in Latin.

    1. SHG Post author

      I remember getting the bill after Thanksgiving Dinner in San Francisco, and seeing the surcharge. I didn’t mind paying extra at Spago’s, but there’s something about having a lousy meal plus a surcharge. Good food matters.

  2. Scott Jacobs

    Also the nerve of challenging the binary structure of privileged thought patterns

    about how something with “chicken” in the name should have chicken in it, or that chili should have at least some minuscule level of spiciness.

  3. DaveL

    I read Roy Choi’s entire response. It didn’t strike me as humble at all, despite Tasting Table’s characterization. More like the restaurateur’s version of “Want to go get a pizza and have sex? What, you don’t like pizza?”

    1. Scott Jacobs

      It sounded a lot like what you would hear from the people running the failed places on like Ramsey’s Kitchen Nightmares… “I don’t hear any complaints about our food and I think it’s amazing but we get like 4 people total a week to come eat out food I don’t know what the problem is…”

  4. Mike

    For years, restaurants have been tacking on a surcharge on large groups. It’s usually on the order of 18% and is called a gratuity.

    But I suppose this is different.

    1. SHG Post author

      I remember arguing with a guy ones that, if it’s a gratuity, it cannot, by definition, be required. I made no sense to him at all.

      1. Patrick Maupin

        I’ve had the same discussion with the same results enough times that I felt compelled to analyze the thinking from the other side. As near as I can figure, it goes something like this: “Gratuity” has the same root as “gratuitous”, and “gratuitous” means it’s free, unearned. It’s awesome — whenever I get a party of 5 or more, the tip is guaranteed, and I don’t even need to keep the ice tea glasses full.

        1. Brian Cowles

          Actually, I believe the thinking goes more like this:

          1. The restaurant is not going to pay any sort of living wage to their waiters and waitresses. (Around here they pay something like $3/hour.) They can only get away with this because tips are a (supposedly) “expected” part of the meal price, which they can keep hidden.

          2. The waiter therefore has an incentive to service the customers well.

          3. A large group (say 6+ people) requires a lot of work.

          4. Therefore, a waiter serving a large group typically has fewer tables aside from that group.

          5. Some people are assholes.

          6. Therefore, some people will not leave enough of a tip to justify the management’s poor wage-paying ability, regardless of service received.

          7. Some of these people will be in the aforementioned large parties.

          8. Therefore, when a large party doesn’t tip well (or at all), the waiter gets hit from both directions – he loses the large party’s tip, and doesn’t get to make it up from other groups because he’s not serving as many of them as he would normally.

          9. Therefore, in order to forestall this eventuality, the restaurant imposes the gratuity on the customer, regardless of the customer’s wishes or the waiter’s responsibilities.

          1. SHG Post author

            Seriously? You think Patrick needed this explained? Is this because of that rumor that his mother dropped him on his head as an infant, because that rumor has never been proven to be true.

            1. Patrick Maupin

              But a concussion could explain my craving for iced tea, and disdain for waitstaff that don’t keep me adequately supplied.

  5. Jake D

    “But people expect the increase in cost to magically disappear, subsumed by the businesses profit margin and not get passed along to the consumer. ”

    Objection: Hasty Generalization. I support an increased minimum wage and I accept increased costs as a consequence. I do not accept learning of the increased costs after I have agreed to a set price for my meal and consumed it.

    1. SHG Post author

      I support an increased minimum wage and I accept increased costs as a consequence.

      So everyone who doesn’t should send the check to you and you’ll take care of it? Damn kind of you.

      1. MelK

        Where were you when unions were upping the cost of production in the 1930’s with the National Labor Relations Act?

        1. SHG Post author

          I’m not that old, but I am rather familiar with labor history and economics. My undergrad degree was a BS in industrial and labor relations.

      2. Jake D

        No, anyone who doesn’t agree with it is welcome to dine in a less civilized state (or country). This will be particularly easy for our friends in San Diego, who can cross over into Tijuana in minutes to enjoy low-cost food and all the other luxuries of an impoverished local population.

        1. Keith

          If SHG will permit a question, what happens to the people in your “civilized society” that aren’t worth $15 an hour to employ, but are worth $8?

          1. SHG Post author

            I’ll permit the question, but raise one of my own: what happens to those people in Jake’s “civilized society” who can’t afford to pay for his generosity on their dime? Somebody loses, so who does Jake hate most?

        2. SHG Post author

          Kind of you to inflict your feelz on others and make it their problem. Very progressive. Or they could go to New York and enjoy a meal at good restaurants (dare I say, maybe even better restaurants than glorious San Diego?) where there is no upcharge. But hey, why shouldn’t you dictate the feelz and demand that other people for them? Your feelz are right, and isn’t that all that matters?

          1. Jake D

            This has nothing to do with how I feel about anything. Senate Bill 3 passed with the support of millions of Californians and my voice is just a tiny grain of assent, blowing in the Santa Ana winds.

            On the other hand, I happen to believe (not feel) the benefits of a happy, healthy society outweigh the costs of increasing the minimum wage.

            Perhaps it is the feelz of those in the minority on this topic, that require further investigation?

            1. SHG Post author

              Since California leads the nation in sound economics, and voted overwhelmingly for a candidate the other 49 states didn’t, you’re probably right. A happy, healthy society of people who can’t afford things is a perfectly reasonable “belief” (which, by the way, is what priests do). On the other hands, people who are knowledgeable about economics and aren’t hypocrites think otherwise.

              So why do you believe it’s better to starve people? Do you prefer that everyone starve, or only a particular gender or color? Just want to be clear.

            2. Keith

              Oh, you believe. That changes everything. I thought you just felt a certain way, which really can’t be discussed logically because your feelz are yours and not other people’s to understand. But your beliefs… wait, no. Still yours. Still the same problem.

              Ok, I’m done.

            3. Jake D

              “A happy, healthy society of people who can’t afford things ”

              Objection: Speculating. And a theory disproven by the history of minimum wage increases.

              There have been 13 increases to the federal minimum wage since the day I was born, yet pesky consumers everywhere obstinately continue ‘affording things’ and rascally small businesses all over the country refuse to go out of business. All this in spite of the persistent perturbation of fiscal conservatives…It must be a conspiracy to make you all look silly in hindsight!

            4. Keith

              But, to be fair to Jake, he did say that how he felt has nothing to do with this. It passed with the support of millions after all. And if everyone believes, I guess you don’t need to worry about challenging the beliefs.

              Hey Jake, just hope that millions of economists don’t think you’re an imbecile. You won’t like how that turns out either.

            5. Jake D

              “How many of those increases doubled the minimum wage overnight?”

              Objection: Irrelevant & misleading. Neither San Diego nor California SB3 doubles the minimum wage overnight, or at all for that matter.

            6. Keith

              Jake, There is and will always be one minimum wage: zero

              The problem you keep dancing around is that some people may not be worth whatever minimum wage you put into law. And when that happens, the law is not kind. It tells that person, they have no worth to anyone because they cannot be employed.

              It tells businesses that they cannot exist, even if people are willing to work there for wages they deem fair and honest, if those wages are below what you feel they should get. And the law doesn’t make this judgment based on the details of the job, it lays it upon every sector and person in society.

  6. B. McLeod

    Maybe TODAY you can’t force people to agree with your pick of two. However, once the technique is perfected, social justice warriors monitoring menu choices will be circulating petitions calling for any persons who make the wrong pick to be dismissed from any employment and shunned by “normal” society. We’re edging closer to this sort of thing every day, and there is no reason to think politically incorrect menu choices will be spared

  7. PVanderwaart

    So management’s message to its employees, reiterated with every transaction, is “we begrudge you your pay.” Great way to run a business.

    Costs change. Adjust your prices and get on with it.

    1. SHG Post author

      Not their pay. Their government mandated pay increase from the amount they accepted when they took the job. Why not $20 an hour. Why not $100. Why not a million? If businesses don’t make a profit, there’s no business and no jobs. Then management’s message is “Sorry, but you’re fired.” Brilliant.

      1. PVanderwaart

        That’s management thinking. Employee thinking goes more like this: “Not only is management irked to have to pay the new minimum wage, but they were unhappy that the previous, pitifully low rates were as high as they were, greedy pigs.”

        Are they going to add another surcharge when the city raises the mil rate?

        1. SHG Post author

          No, that’s rational thinking instead of feelings. That’s why some people are employees who work for people who own businesses.

        2. Keith

          I’m a trustee of a 501(c)(4) and we have minimum wage employees. We need to pay them more this year because NJ voters decided to raise the minimum wage. The workers don’t bring in more value, and as a non-profit we don’t make more money or have the elasticity to absorb those extra costs easily.

          Perhaps you can explain the “management thinking” that you speak of. To me, it just sounds like we should pay higher than market rates because other people that won’t be paying it, thought it was a good idea.

          1. SHG Post author

            Charitable orgs are collateral damage in the war. I understand his “employee thinking,” and don’t blame any employee for wanting to earn more rather than less. Who doesn’t? But I also understand that businesses exist for a reason, and that reason isn’t to pay employees. All the nice ideas of what people should earn are wonderful, but for the fact that someone has to pay for it. Some people may well be willing. Most are not. Not even the ones who support the increase in theory, but hate it when they get charged more for goods and services. They just can’t connect the dots.

            There’s no particular reason why that would be an employees concern. Why should he care if the owner makes a profit? Why should he care if prices are increased (until the employee is the consumer, at which point he’ll care because it eats up his newfound earnings)? But push must, of necessity, come to shove, and someone, somewhere, must pay.

            As for charitable orgs, so what if you can’t use the money to cure cancer because you have to pay employees. It’s just an unintended charity that defeats the reason for the charitable orgs existence. Aren’t employees worth it?


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