Haymarket Cafe in Northampton to eliminate tipping, raise wages

Last modified: Friday, November 06, 2015

NORTHAMPTON — While throwing change in a barista’s gratuity jar or calculating 20 percent of a lunch check has long been an expected part of dining out, starting on Nov. 22, that will no longer be a part of the experience at the Haymarket Cafe.

“There will be no tipping — no tip jar upstairs, and on credit card receipts there will be a note explaining that the tip is included in the price,” owner Peter Simpson said Wednesday at the Main Street cafe.

Motivated by grassroots movements such as Fight for $15, which is pushing for a $15 minimum wage across the country, Simpson said he is making what could be a risky business move in the interest of his employees.

In eliminating tipping, Simpson will also raise the starting wage for all of his employees to $14 an hour on Nov. 22. The increases will be covered by raising prices 10 percent in the upstairs coffee shop and 20 percent downstairs, where table service is offered, Simpson said.

By his count, the Haymarket will be the first restaurant in Northampton and likely the first in the state to discontinue gratuities.

Simpson made the decision after several months of conversations with employees, hours of research and extensive number-crunching. He admits he’s nervous, but hopes that customers will be receptive to his moral reasoning enough to make the decision work financially.

Wage gap

Today at the cafe, wages of kitchen staff start at $12 an hour, wait staff at $5 an hour plus tips, and upstairs coffee staff $10 an hour plus tips.

After tipping is eliminated, all of those starting wages will be boosted to $14 an hour this year, and increase $1 annually for the next three years until reaching $17 an hour in 2018, Simpson said.

One of the largest driving factors in his reasoning, he said, is the often large gap between the earnings of front- and back-of-the-house restaurant workers.

What’s more, cooks in Northampton and elsewhere are often Latino, while servers are often white, creating a racial divide in pay, Simpson said.

To implement the plan, he is going against the industry’s magic formula for prosperity, he said.

Restaurants typically aim to spend one-third of their budget on labor, one-third on food and the rest on other costs. But under Simpson’s plan, around 40 percent will go toward labor costs.

“Then I thought, what if that’s the new norm?” Simpson related.

Across the country, restaurateurs are trying that on for size.

Faced with rising labor costs from minimum wage increases, a growing number restaurants in Seattle, San Francisco and New York have implemented similar systems of eliminating tipping while raising wages.

And in Massachusetts, the Legislature is considering several bills. One would increase the minimum wage for so-called “big box” store and fast-food workers to $15 an hour, another would raise the minimum for personal-care attendants to $15 an hour, and a third would raise the tipped minimum wage to align with the regular minimum wage over the course of several years.

Simpson was one who spoke in favor of eliminating the tipped minimum at a Tuesday hearing of the Legislature’s Joint Committee on Labor and Workforce Development.

If the bill to eliminate the tipped minimum wage is approved, it would be gradually raised until it matches the regular minimum wage in 2022.

Benefits and drawbacks

While cooks will certainly benefit from a more evenly distributed wage system, other workers will likely take a hit from the loss of tips, Simpson said.

But that doesn’t mean that the staff aren’t on board.

“There are slow weeks here where I do make only make $15, or only $10 an hour,” server Aubrey Clark said. “Right now, I probably average $20 an hour, so I’m definitely taking a pay cut.”

From a moral standpoint, she said she stands by Simpson’s decision. But she said she will only know how she feels about the change once the financial reality takes hold. “I’ll know once the bills come around,” Clark said.

Clark, 25, of Holyoke, said she is scared that the plan might not be a workable one. On the other hand, such a moral standpoint in such a progressive area has the possibility to attract business, she said.

“I think if you’re going to do it anywhere, this is the place,” she said.

And she said though she expects that some of her co-workers will leave in search of a higher-paying job — at a restaurant that permits tipping — Simpson’s plan will also bring in applicants who are attracted to such a system.

Barista Shan Davis, 27, of Northampton said the Haymarket is already the best-paying job that he’s had in his 10 years in the industry. With tips, he estimates that he makes $15 an hour working upstairs.

“I like the idea of everyone being equalized ... I don’t think it makes any sense that I’m making more money than the cooks,” he said. And “I do like the idea of my living wage not being contingent upon how someone thinks I’m working,” he said.

Simpson said the move will eliminate the dynamic where workers are forced to perform a certain way for customers. And that goes especially for women, who are sometimes put into uncomfortable situations by customers who make sexual advances.

“It feels more dignified,” Simpson said.

Davis said it’s common for women in the industry to be “harassed” by customers, though problem customers at the Haymarket are rare. And the women are expected to withstand the treatment in order to earn tips, he said.

In the industry, “the standard is just exploitation,” Davis said.

Swansea Bleicher, 49, who said she’s been coming to the cafe since it was “shoebox-sized,” remarked on the quality of food and work ethic of the employees.

“I think it’s a great idea,” she said. “They’re a model for other employers.”

She said the move will not affect her decision to frequent the cafe for lunch and the occasional chocolate chip cookie.

Cross training

Simpson expects the move to have other positive impacts at the Haymarket, which he named after the 1886 riots in Chicago that began as a peaceful march in support of an eight-hour workday.

Having a standard wage with no tipping will increase the opportunity for cross-training, where a server can go help serve coffee upstairs during a rush and not miss out on any money.

“To me, I think it will make a much more stronger, cohesive environment in the cafe,” Simpson said.

He said the plan will also place more importance on investment in staff.

“It puts more of the stress on the business owner, where it should be,” he said. “In very real ways, the subminimum wage is looked on as something that’s expendable, not of value.”

Both Davis and Clark say they expect that putting a stop to “tipping culture” could be a tough sell to loyal Haymarket customers.

But awareness is a key part of Simpson’s plan. He plans to install signs, talk with employees about how they can convey the intent of the policy to customers and perform social and traditional media outreach.

“Ideally, there will be a bump in business,” he said.

On Nov. 22, its 25th anniversary, the cafe will close at night to hold a party and panel discussion featuring people speaking about the Fight for $15 movement.

At the party, the Pioneer Valley Workers Center will also launch its high-road employer campaign, highlighting Northampton employers who operate under fair-labor practices, center coordinator Rose Bookbinder said.

“I think Northampton has been out in front in terms of our practices around buying local, organic, sustainable,” Bookbinder said. “It makes sense that we’re going to be out front in how we’re going to create a sustainable workforce in our food system.”

And taking that lead is a role that Simpson seems to be filling.

“I feel like this is something I can be proud of,” he said.

Chris Lindahl can be reached at clindahl@gazettenet.com.


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