Restaurant Closing Time

Sometimes, notwithstanding our wishes and hopes, we just can’t change or escape the basic laws of economics.  California restaurants are learning this lesson — one that so many other businesses have learned in so many other settings for so many years.

A number of California communities, including San Francisco, have decided that they should legislate substantial increases to the minimum wage, so that the minimum wage will reach $15 — a number that was picked not through the guidance of the invisible hand of supply and demand, but because it sounds goods when politicians promise it.  Basic laws of economics will tell you that if you increase the costs for a business, the business has only a few options:  either absorb the increase by cutting costs in other areas (or accepting lower profits), or increase their prices to make up for the extra costs, or recognize that you just can’t make the economics of the business work and close your doors.  In California, a number of restaurants have decided that the latter route is the only viable option.

o-restaurant-worker-facebookIn the Bay Area, at least 60 restaurants have closed since September, and as a result a number of line cooks, car valets, dishwashers, table bussers, and waiters — the people who were supposed to be helped by the $15 minimum wage initiatives, incidentally — have lost their jobs.  These results in the San Francisco area, where wages for starting workers are higher than in less affluent parts of the state, are leaving some Californians who aren’t living in economic dreamland wondering what the effects will be when a statewide minimum wage takes effect and inland areas, which already have higher unemployment numbers and where starting pay is correspondingly lower, are affected.

This restaurant closing effect shouldn’t be a surprise.  Many restaurants run on very thin margins as it is, trying to find that magic balance between quality food and reasonable prices and cool ambiance that diners are looking for.  They don’t have big profit margins that can simply absorb higher wages.  If minimum-wage legislation substantially increases their costs, most restaurants just don’t have the option of jacking up their prices because they know they are going to lose their more cost-sensitive patrons.  And there really aren’t many other areas in which restaurants can make up for increased labor costs.  Tinker with the quality of the food, or the ingredients, or the portion size, and you’ll likely end up losing your more discriminating patrons — and many restauranteurs who are passionate about food probably wouldn’t want to change how they prepare dishes, anyway.  So the logical option, unfortunately, is closing.

In short, the five-star joints, where there is less price sensitivity and where the wages may already be higher, will survive, but many of the more basic restaurants will struggle and close.  The cause-and-effect relationship is so predictable that a recent academic study found that every $1 hike in the minimum wage brings a 14 percent increase in the likelihood that a 3.5-star restaurant on Yelp! will close its doors.

The people who are advocating for large increases in the minimum wage no doubt are well-intentioned, but their efforts ultimately are misguided because you simply cannot ignore, or legislate away, the laws of economics.   How many times do we have to see this play before people start getting the plot?

Small Plates

Last night the Marquette Warrior and I had dinner at a restaurant called Amada.  It’s one of those tapas places that offers a number of “small plate” options that the diners can share.  (In our case no sharing occurred because the MW is a strict vegetarian and I go for meat options, so we didn’t quite fulfill the restaurant’s intent.)

Tapas restaurants have a good aspect and a bad aspect.  The bad is that there are lots of choices, so you end up carefully scrutinizing the menu and spending a long time thinking through your order.  The good is that you end up with very tasty food that is always well presented and served in moderate portion sizes.  The result is a fine meal where you don’t get plates groaning with food, and after you’ve cleaned your plates — which both the MW and I did, with relish — you rise from the table feeling satisfied but not uncomfortably stuffed.

We’ve got a problem with food waste in this country, and some of it results from unconsumed food left on plates that were overfilled at the outset.  At tapas places, that isn’t an issue, which is another advantage to the tapas model.

The Restaurant Canary

We’ve all heard about the proverbial canary in the coal mine.  In the days before air quality monitoring technology was developed, canaries were put into the mine shafts because they were especially sensitive to dust and gas in the air.  If you were a coal miner and you noticed that the canary wasn’t chirping any more, you knew it was time to grab your pick and hurry back up to the surface.

101815-cheese-foto4Is the restaurant sector the canary for the modern American economy?  Some economists think so.  They reach the logical inference — one that I’ve seen substantiated by personal experience in the past — that people are more likely to eat out when they’ve got cash on hand, and less likely to eat out when they know they’ve got to tighten their belts.  Going out to eat is one of the first “luxury” expenditures to hit the cutting room floor when times get lean because people can save money by making their own food and eating at home.

If restaurants are, in fact, a leading economic indicator, the canary may be indicating that tough times are ahead for the American economy.  Restaurant and bar sales have fallen in three of the last six months, and analysts have downgraded the stocks in the chain restaurants that are staples of the strip malls found at every crossroads in America — places like Chipotle, Panera Bread, and Cheesecake Factory.  One analyst says that the performance of the restaurant sector looks remarkably like what it was in 2000 and again in 2007, right before the last recessions hit.  Analysts also are noting that, in addition to declining consumer spending, restaurants are facing business and profitability challenges due to changes in overtime regulations and increases in the minimum wage.

The U.S. economy is so sprawling and multi-faceted, it’s hard to pick one area as the true canary.  But if the restaurant sector is the right choice, it may be time for the American consumer to start heading for the open air.

Pie-Eyed


If you’re on the road in a faraway place, how do you know where you’ll get good food?  My theory is that you look for pie.  And, if you see a place with a sign touting the pie offerings, so much the better!  The concept underlying the theory is that anyone who has the patience to make a good pie with a light, flaky crust is likely to care about the quality of all the food she serves.  

It’s a theory that’s held up pretty well.

Here, in West Glacier, the theory was again put to the test — and I’m happy to report that the Glacier Highland Restaurant, right across the street from the west entrance to Glacier National Park, affirmed the theory with flying colors.  The grinning Cheri, proprietor of the Pie Bar, conveyed the truth.  Kish raved about the coconut cream pie, my apple pie a la mode, shown below, was excellent, and every morsel of food we’ve had there has been good.

We’ll be heading over there for breakfast tomorrow.  Say, have I mentioned that people used to eat pie for breakfast?

Sins Of The Silent Auction

If you’ve been to any kind of charitable fundraising event in the past 25 years, you’ve probably encountered a “silent auction.”  That’s where various items — signed sports paraphernalia, artwork, one-night stays at a hotel, golf bags, massage treatments, wine, weekend stays at a condo in Cancun, and other potentially enticing options — are displayed on tables for attendees to examine.  Rather than making bids at the behest of a live auctioneer, the interested parties write their bids on paper and then lurk around to see if somebody else outbids them before the auction closes at the designated time.

auction-from-golf-tableKish and I have bought things at silent auctions, but they’ve been tangible things that you can carry away, like a needlepoint stool or a small hand-painted table.  We’ve never been the prevailing bidder on any kind of silent auction item that involves any element of personal service.  I’ve wondered how, say, a guitar lesson or a restaurant visit obtained through a silent auction would work out.  After all, the proprietor who donated the item isn’t getting paid at the time you show up; they’re just redeeming the coupon they provided weeks or even months before and probably long since forgotten.  Would that fact affect the quality of the experience?

We’ve now seen different answers to that question.  Some months ago two of our friends won a silent auction item that allowed them to bring a group to a local place called The Kitchen to make a meal with the help of the gourmet cooks on hand and drink selected wine pairings with each course; they invited us to join and we all had a wonderful time.  More recently, other friends won a silent auction item that involved a special fixed-course meal at a local restaurant and graciously asked us to come along.  In that instance, the service of the food was very slow, with long gaps between courses even though the place wasn’t crowded.  With old friends for company the time passed very enjoyably, with a lot of laughs — but the delays were noticeable and remarked upon, and I couldn’t help but wonder whether we had second-fiddle status in the eyes of the restaurant.

So now I’ve developed a multi-faceted theory about silent auctions.  I think you’re always safe bidding on a tangible, displayed item, because you know exactly what you might be getting.  The signed, framed photo of your favorite sports star isn’t going to change.  But when it comes to the personal service options, I think you need to assess the source.  If you have reason to believe that the offeror has some skin in the game — because, say, they are offering one free yoga lesson and hope that you’ll be so impressed you come back for more, or they’re a new business and are counting on your positive experience to get a good comment on their Facebook page and help with their word-of-mouth — you’re probably on solid ground.  If it’s an established restaurant, though, and the items relegates you to an off-night, you might need to brace yourself for less than stellar service.

Valter’s At The Maennerchor

Last night we checked out the latest restaurant to grace the German Village venue:  Valter’s at the Maennerchor.  It’s a new food option at one of the oldest, most iconic locations in Columbus — the Columbus Maennerchor (German for men’s choir) building.  The Maennerchor itself has been a part of the Columbus arts community since 1848.

IMG_0443It’s not surprising, then, that the restaurant has a strong German theme, from the Maennerchor plaques on the walls, to the cozy rooms, to the excellent beer selection, and finally to the menu options themselves.  (Although, when we where there, a bagpiper and drummer from the Columbus Shamrock Club stopped by to treat us to some music before enjoying a few pints at the bar, and when they left they departed with a heartfelt rendition of Carmen Ohio, The Ohio State University’s familiar alma mater.  I can now attest that Carmen Ohio sounds pretty darned good when played on a bagpipe.)

We started our meal with the sauerkraut ball and potato pancake appetizers.  Both were very good, but the potato pancakes are worthy of a special note because they were prepared in the preferred way:  crisp, well-crusted, and served the traditional way with dark mustard and applesauce.  For my entree I got the weinerschnitzel and spaetzle, which is the acid test for any German restaurant.  The schnitzel was tender and flavorful with a very nice breading, and the spaetzle was as light as spaetzle can be — after all, German cuisine is of the stick to your ribs variety — and had an excellent, peppery flavoring.  The portions were abundant, too, which is another German trademark, and the prices were very reasonable.

During our meal we met Valter himself, who made the rounds of the tables and later graciously treated us to some very tasty mini cream puffs.  He suggested that we stop by for brunch some weekend, and showed us a picture of a pancake concoction that made having brunch at the Maennerchor look like a very wise decision.

It’s nice to have another fun German food option in German Village.