Restaurants Increase Wages and Offer Signing Bonuses

For Ms. Cohen, it was an effort not only to challenge the very concept of tipping, which she called “inherently racist and sexist,” but also to attract and keep workers. “Everyone is making it seem like the difficulties finding staff is a post-pandemic issue,” she said. “But it was real before the pandemic, too, especially in New York City.”

Her new system was costly. Ms. Cohen says that, despite enthusiastic reviews and hard-to-get reservations, she often barely broke even. Profits hovered at about 1 percent, she said. “We were always teetering on the edge of collapse.”

The pandemic changed that. Like many restaurateurs, Ms. Cohen streamlined her menu, serving a tasting of three courses instead of the five or 10 previously on offer. Fewer choices drastically lowered her food costs and the number of people needed to prepare the intricate dishes she is known for, like an eggplant tiramisù served with a cloud of cotton candy.

Today, Dirt Candy offers just one five-course menu, and starts all employees at $25 an hour. Last month, its profits hit 5 percent, Ms. Cohen said. “The only way I could pay fairly was to start running a better business,” she added. “It’s not the restaurant I dreamed of having, but it’s the one that functions.”

Some restaurants that aren’t ready to make the leap to a new wage structure are tweaking around the edges, offering additional benefits and less grueling schedules. Ellen Yin, a partner in the Philadelphia-based High Street Hospitality Group, has long offered a health plan, but will soon add one with lower premiums, and a student-debt reduction program. This month, Jason Berry, a founder of Knead Hospitality, a restaurant group in Washington, D.C., will start introducing a four-day workweek for his restaurants’ managers.

Mr. Berry proposed the schedule switch — four 12-hour days instead of five 11-hour shifts — after losing two valued longtime employees this summer. One quit to sell wine, the other to follow a dream and write children’s books.

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