How restaurateurs are helping staff afford to live in expensive cities

Out of 30 metro areas in the United States that increased productivity, average wages and standard of living since 2010, only 11 were able to distribute that growth across all different social strata, according to an April report from policy think tank Brookings Institution. The uneven growth of wealth in San Francisco, for instance, has created challenges for some of the city’s restaurant workers and operators seeking labor. “For the vast majority of restaurant workers, the reality of making it from paycheck to paycheck is incredibly difficult,” says Andy Mercy, CEO of local fast-casual fusion restaurant Dabba. “In the Bay Area, that’s exacerbated by the cost of living.”

Mercy says it just takes one childcare, health or legal issue to throw off a very delicate balance for people who are living paycheck to paycheck, so he’s working to build long- and short-term safety nets for his employees. Here’s how Mercy and other restaurateurs are helping workers get by—and securing a labor force—in cities where the cost of living is exceptionally high.

Dabba has kept turnover under 20% annually, in part because workers are treated like they are in business school, Mercy says. “On a day-to-day, monthly and quarterly basis, we dig into the numbers of the business,” he says. Walking workers through prime costs and labor ratios not only helps them run Dabba more effectively, but it also helps workers become more valuable to whatever career path they choose, he says.

Another aspect of Dabba team members’ training is safe communication. Staff members are taught about body language and tone to help facilitate productive and healthy conversations. “We’re helping them become more qualified leaders and communicators,” he says. “Ultimately, that’s what’s going to help them live in the Bay Area.”

Besides starting staff at $15 an hour, Dabba also offers medical, dental and vision insurance to its 100% full-time staff. The fast casual also offers voluntary pretax benefits, such as supplemental insurance, $50 commuter benefits and $50 health club credits.

Affordability is the primary driver of the labor shortage in Palo Alto, Calif., Michael Ekwall—co-owner of Cuban restaurant La Bodeguita del Medio—told Palo Alto Weekly. The restaurant tries to attract candidates with benefits like 401Ks, and it supports public transit and entry-level housing initiatives. Palo Alto neighbor Asian Box, a sustainable takeout restaurant with eight locations in the Bay Area and Southern California, gives staff a weekly paycheck and offers assistance with loans and apartment references to help keep employees around.

In Menlo Park, Calif., one restaurateur started renting an apartment near his three restaurants this year, according to local news site The Almanac. Jason Kwan, owner of Jason’s Cafe, Chef Kwan’s and Yum Cha Palace, allows workers who live far away to sleep at the apartment instead of beginning their trek home to Stockton, Sacramento or San Francisco. 

In the Dabba kitchen, a grid on the wall tracks each employee’s level of role mastery. For each role, employees can earn the rookie, expert and master level. At master, staff get $23 an hour, equity and profit-sharing. Three of his employees in the last year have moved to the master level. “Raises are in their hands,” Mercy says. “It’s not arbitrary or subjective. It’s 100% transparent.”