The restaurant business is notorious for failure. For the few able to fill every seat and charge exorbitant prices, the business model works. Same with fast food chains, whose business model is down to a science. But for a restauranteur like Yannick Benjamin, whose restaurant Contento was excellent, it seems the notion of business model was never considered.
After more than three years of service, during which The New York Times ranked us twice among the 100 Best Restaurants in New York City and the Michelin Guide gave me its sommelier award, I had to say goodbye to my talented staff and lifelong dream of owning a restaurant. The combination of inflation, rising crime that required us to pay for security guards and declining profits simply proved insurmountable.
That the staff was talented is irrelevant. That owning a restaurant was a lifelong dream is irrelevant. That the restaurant was twice ranked among the 100 best restaurants in the city is, well, irrelevant. If a restaurant can’t make enough money to pay its bills, it will fail. It must fail. No matter how good it may be, it’s still a business. No matter how much the restaurant owner wants to provide well for his staff, provide stable employment, provide health insurance, provide a profit for its owner, it’s still a business. But Benjamin demonstrates little understanding of this.
My story is one small part of an ongoing struggle for restaurant workers and culinary culture across New York City and the country. If you’re wondering why you so rarely see a disabled person like myself on a wheelchair on the floor of your favorite restaurant, why menu prices seem so high or why service feels uneven nearly five years after the pandemic began, the American health care system deserves much of the blame. If that sounds melodramatic, ask your favorite server.
It smells as if this is another slam of the health care system, atop the outpouring of outrage following the murder of UnitedHealthcare CEO Brian Thompson, even if it’s not directly related. Grievances against health insurers aside, people have it in their heads that healthcare is a right, meaning that it somehow magically happens without regard to paying for it. Someone else should pay. The government should pay. It’s not that doctors and nurses should work for free, because that would be ridiculous, even if many people believe docs earn too much.
But when it comes to restaurants, the dynamic is even worse because the need is so great and the ability to provide health insurance to restaurant workers is essentially non-existent for most restaurants.
A glittering cast of chefs from across the country banded together to create the Independent Restaurant Coalition, an organization that began to lobby for financial and legislative protections for restaurant workers. In May 2020, chefs, chain restaurant executives and other culinary professionals went to the White House to campaign for federal assistance for restaurants. I hoped that the silver lining of that horrific global crisis was an opportunity to create a more sustainable restaurant industry, with the kind of jobs that people can keep without worrying about the worst.
This was directed toward restaurants surviving the pandemic, a (hopefully) once-in-a-lifetime event. Restaurants sought a federal cash infusion to make it over the covid hump, but it had nothing to do with changing the business model of restaurants so that they could continue to exist while providing stability and security beyond the scope of their earnings.
According to the U.S. Bureau of Labor Statistics, only 40 percent of full-time hospitality workers have had access to health coverage in 2024, compared to the 87 percent of full-time private sector jobs that offer it. As a result, many of the 17 million Americans who work in restaurants and hospitality are most likely skipping annual checkups or pap smears or praying their cough goes away on its own. They can’t afford to take a sick day.
Restaurant workers need healthcare like everyone else. Is this in doubt? Do they deserve it any less than any other worker? Benjamin goes on to talk about some of the bells and whistles in the same vein, like grief.
In an industry where 10 percent profit margins are a gold standard of success, most restaurants can’t afford to offer standardized pay or consistent hours — the former is one of surveyed employees’ top reasons for leaving restaurant jobs — let alone benefits that give our work force a chance to live with dignity.
If people have other options, why wouldn’t they leave for jobs that better support their physical and mental health? Or that allow them to stay home when sick or grieving or without child care?
Is anybody arguing that restaurant workers don’t deserve a chance to live with dignity? Whether they deserve “mental health” days is another matter, but surely they should be able to take a day off when they’re sick, right?
Perhaps Senator Elizabeth Warren would lay blame for this state of affairs on greedy restaurant owners, since every problem is one of greed in her eyes. But Yannick Benjamin hardly seems greedy. Indeed, he seems very empathetic toward his own employees and workers in the industry as a whole. And yet, even with his award-winning restaurant, he couldn’t manage to pull it off. Hell, he couldn’t even manage to stay in business without giving his employees either stability or healthcare.
During our last six months at Contento, as we crunched numbers to try to keep the lights on, I had to make gut-wrenching decisions. When reservations were sparse, we had to let people go. Against my values as a business owner, we would tell the second bartender to clock out early or rely on one dishwasher instead of two. This affects how people live. My staff aren’t nameless, faceless statistics. They’re people I hired, mentored, valued and admired. I’d met their roommates and their children. They supported me and mourned with me when my dad died earlier this year.
It’s hard to take issue with the things Benjamin wants for his employees. It’s hard to take issue with his argument that culinary artistry won’t survive if the only way to earn a sustainable living is to find a corporate job. But should the restaurant industry rely on government subsidies?
It’s been nearly five years since the pandemic upended every facet of people’s lives, but there’s still time for restaurant industry power players to harness the momentum of those early months. They could use their influence to lobby for subsidies like the tens of billions of dollars that airline executives secured as part of the CARES Act in 2020, and use that cash injection to create a health care model for restaurant workers. With enough pressure, the federal government could distribute a national version of the $3 million fund that New York City provided to some 100 independent restaurants in 2020. A healthier, more stable work force would make the entire industry more sustainable.
There are, of course, other industries that have grown to rely on government subsidies for a variety of reasons, primarily related to our national need for the industry (like transportation or farming) and the lack of a viable business model for the industry to survive. Are restaurants in that category? Should they be? And if they are, don’t child care and home health care workers deserve to live with dignity too? Or should a restaurant whose business model can’t sustain it fail, no matter how talented its employees or how tasty its food?
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“Follow your dreams” has always been awful career advice–Benjamin may have dreamed of owning a restaurant, but he lacked the necessary skill (and, no doubt, luck) to pull it off. Luck is by nature a wildcard, but skill is not, and it seems that the greater one’s skill, the less luck one needs. No, restaurants should not receive taxpayer subsidies–they aren’t vital national infrastructure, and there surely is a viable business model for them (as demonstrated by the fact that many restaurants do succeed without taxpayer subsidies), even if Benjamin didn’t have one (or, for that matter, seem to understand the problem).
Keeping unprofitable businesses afloat isn’t the government’s job.
Proponents of government subsidies as the answer to every problem don’t grasp the economic impacts. Whether it be housing or health care, when billions in federal money are injected into a market, sellers are relieved from the effects of overpricing. The millions of customers who might have been priced out by a markup can pay it once they are given federal money for the purpose. It is as much a price support for the wealthy as a hardship relief for the poor.
Trickle-up economics.
Not “trickle down” or “trickle up” but “GUSH UPWARDS” or even better “The GREAT UPWARDS SUCK”.
On a state level, my phone bill includes a “connectivity fee” which I have learned was originally added to help rural communities acquire telephone access. Those communities have access now (and have for 50+ years) so why the continued subsidies? This fee is around one third of my total bill.
Turns out, the phone companies’ business model includes employing otherwise useless children/cousins/friends of the companies’ managers.
To say their business model is faulty is an insult to buses and passenger trains. The notable exception is the phone companies lobbying efforts which are only outdone by fire departments’ unions (who won’t let a single station close even if the station itself wants to).
All to say, once a business cashes in by getting on the public dime, the beneficiaries are not the needy or most deserving, but those who don’t deserve much of anything at all.
Instead of establishing an organization “that began to lobby for financial and legislative protections for restaurant workers.”, why did they not establish an organization that could provide group health insurance for restaurant workers? Like the way there is one for construction workers, or other industries where the workers are semi-itinerant and not all in one building? Lots of professional people get their healthcare from such organizations, too.
Or, I will offer up my own favorite solution – the system that covers all of the Federal workers in the country (and outside it). Which includes both a government (employer) payment component, and payment by the workers for a share.
In any case, whatever the solution it must include a requirement that everyone pays something for care. No one gets it “for free”.
There are organizations that provide group health insurance for restaurant workers, exactly “like the way there is one for construction workers, or other industries where the workers are semi-itinerant and not all in one building.” They’re called labor unions. But most restaurant owners oppose them and apparently would prefer government subsidiaries. On the other hand, there’s the California approach, which allows restaurants to include a surcharge for employee health care in the form of a percentage of the total bill.
ISTR back in the day where a co-op would be set up for small businesses in a region, typically a single metro area, that would allow any business that met whatever conditions were required (sometimes it was industry related sometimes just geographical) to form a larger insurance pool to get better coverage and rates from the companies. Can’t say if that is still a thing but it seems like it would be advantageous if something like that could be worked out. Maybe find an insurance broker to manage it.
Oh, i know about labor unions, and how they bring all sorts of benefits to workers. They also bring increased costs and aggravation to management, which is why management, of all sizes of businesses, opposes them.
I have actually been a union worker – have you?
One issue to be brought up from Scott’s essay is the ever escalating price of direct labor due to the insatiable appetite of entitlements programs and taxes.
The first duty of a business is to make money so it can continue to operate. Everything else is secondary.
While the modern open-admission restaurant is generally a 19th century invention perfected in the mid 20th, the takeout / central kitchen industry may be as old as the city. However the need for it has never been lower. Only dorm, hostel, or hotel residents require prepared food for every meal, and the available options are higher than any time in history.
Restaurants are a luxury, and because of inflation they are not able to price themselves at luxury levels. Also, restaurant workers have never been skilled labor, and being able to raise a family on a restaurant job was either an accident of happenstance or a testament to doing more with less.
My son in law is a cook, and wants a restaurant. I’ve told him what local restaurant owners are doing: selling their storefronts (or closing them) and either changing businesses or going into trucks where their expenses and labor costs are lower.