Haymarket Café to Increase Starting Wage in Hopes of Beginning a Town Movement

Photo by Jen Zhu '16 Haymarket Café is increasing its starting wage and encouraging other cafés to do the same. Marie Wilken '18 Copy Editor Haymarket Café owner Peter Simpson founded the restaurant to create “an alternative to the status quo in the service industry,” and revive that goal. After witnessing the spread of the $15 minimum wage movement, Simpson renewed his interest in challenging service industry standards — and he’s trying to start a movement across town. The café is set to adopt a revised version of the $15 per hour movement. The plan is to raise their starting wage to $14 per hour later this year and then by a dollar per hour every year after that until it reaches $17 per hour in 2018. After reaching $17, the wage increase will be linked to inflation. Simpson modified the $15 per hour movement’s strategy because he wanted to combat the pay discrepancy between the “front of the house” and the “back of the house,” or the kitchen, a discrepancy that mostly stem from tips. Because restaurants legally cannot share tips, Simpson decided to take tips out of the equation, include gratuity in the price and compensate by raising the pay of all of his workers — hopefully to achieve the same effect. Simpson said that people “can’t live” on the federal minimum wage. Northampton’s minimum wage is $9 an hour. In June 2014, Massachusetts passed a law that will incrementally raise the state’s minimum wage to $11 an hour by 2017. Competing with businesses that follow these rules, Simpson said that, like other business owners, he found the thought of raising his starting wage daunting. In the service industry, labor usually accounts for about 33 percent of a business’s costs, Simpson explained. When he adopts these higher wages, labor costs will account for 40 to 42 percent. “I balked at that immediately, and I thought, ‘I can’t do this.’ But then I started thinking, ‘What if that wasn’t the norm? What if that was the standard in the industry?’” Questioning service industry standards is not new to Haymarket’s owner. Simpson and his brother founded the café after they worked in the restaurant business for years and wanted to try a different management strategy. This included creating a workplace with increased interaction and clear communication between owners and employees, where employees are respected for the work they do. Even the café’s name has its roots in workers’ rights; it refers to the Haymarket affair in Chicago, a peaceful-rally-turned-riot advocating for the eight-hour workday. Simpson has been planning this change for a while – listening to his employees’ opinions, researching, crunching the numbers and trying to convince other café owners to do the same. “I think it would be more newsworthy if five or six of us would do it at once,” he said, adding that he hopes it will garner the political attention necessary to get the issue on a ballot. “I’m at a slight disadvantage, obviously, if I do it myself,” Simpson said. However, he has been thinking about how the café would show its customers that their business supports a higher minimum wage, and he hopes that people come to the café because of it. While his employees are on board with the decision, they initially expressed some reservations. Waitstaff will likely see a decrease in the money they bring home as tips will essentially be shared. While Simpson said this is a valid concern, he believes the tips are not just to reward good service; they also acknowledge an overall good experience, including food. “I think actually, fundamentally, you need to look at those tips. You need to think about those tips. Who are those tips for?” James Miller, an economics professor at Smith, thinks a higher minimum wage does more harm than good. He argued that, when governments raise the minimum wage, unemployment increases, often driving poorer residents out of an area. He said a higher minimum wage may also hurt low-skilled workers because, while a business might not be willing to hire an inexperienced teenager for $15 an hour, they might hire her at $8. However, Miller said he has no objection to a single business doing it – he thinks it’ll be interesting to see what effect Haymarket’s plans have. “It’s better if one restaurant does it than if the government forces them because you can see what the effect is. If this is going to destroy his business, it’s better we do it with one business than if all businesses are forced to,” Miller said. “The fact that he’s doing it voluntarily [is] a good experiment.” Simpson acknowledged that it’s a nuanced issue; he’s unsure of what will happen, but he’s ready to act on his ideals. “It’s hard to say, but I’m going to try,” Simpson said. “It’s something I feel like I could be proud of, especially if it could start a movement in this town.”