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Where Labor Dollars Go

Where Labor Dollars Go

BUCK BOOST: Mandated minimum wage increases have had a low impact in San Francisco.

INTO THE MIX: Two positions owners say are problematic to fill, line cooks and unit managers, experienced sizable pay boosts in 2005.

Worried about what would happen to your restaurant if your locality were to mandate a sizable minimum wage boost, as some already have? Wondering how much to pay your salaried personnel whether this happens or not? Fear not: New research sheds light on these often-vexing issues.

San Francisco is the de facto test case for minimum wage issues, thanks to a 2003 election that raised the city's minimum wage from the $5.15 federal level to $8.50. Subsequent cost-of-living adjustments have lifted it further, up to $8.82 per hour this year.

So how have restaurants fared? An analysis conducted by economics researchers at the University of California at Berkeley found that:

  • For restaurants, full-time employment increased and job tenure improved.
  • Average prices for restaurant menu items rose three percent relative to comparable restaurants on the east side of San Francisco Bay.
  • The percentage of workers earning less than $8.50 an hour in restaurants affected by the law declined substantially, while health insurance coverage by employers remained stable.
  • The policy did not spur business closures.

The time frame of the study, researchers say, was sufficient for restaurant operators to adjust prices, lay off workers and otherwise deal with the new wage law.

So what about your employ-ees who make more than minimum wage? New data on full-service restaurant pay scales comes from a survey fielded by website

The site's 2005 salary study found that two of the most problematic spots for restaurant owners to fill—unit managers and line cooks—had big wage gains on the year.

Average wages for line cooks rose from $11.20 in 2004 to $12.64 in 2005, an 11.4 percent increase (salaried line cooks made an average of $30,454 in 2005). The highest-paid line cooks work in Las Vegas, where they pull down $14.00 an hour. That's $.50 more than their peers make in New York City.

Low-paying line cook areas noted in the study were Texas ($10.62) and North Carolina ($9.00).

Nationally, wages for managers rose 8.3 percent, from $45,532 in 2004 to $49,634 in 2005. Those in New York were the highest-paid, averaging $57,500 per year. Chicago restaurant managers make the least, at $37,500 per year.

Overall, executive chefs make more money than most other restaurant positions, averaging $75,596 per year. Fifteen percent of fine dining executive chefs earn more than $100,000 per year.

But, boy, do they earn it. Executive chefs reported working an average of 57.3 hours per week, or 10.9 hours per day. That's more hours than any other position in the restaurant. Forty percent of respondents said they work more than 61 hours in a typical week; only three percent of them were paid overtime for doing so.

In fact, among all restaurant workers, only servers report working less than the standard 40-hour American work week.

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