Sonoma County’s booming restaurant industry drives wage shift

Famed Healdsburg restaurateurs Douglas Keane and Nick Peyton, who are seeking to reopen their former Michelin-rated restaurant Cyrus in the countryside of Alexander Valley, are making another bold move in an industry that deals with big risks and slim margins.

This time, the duo are wagering that they’ll retain a stable, loyal workforce at their downtown Healdsburg Bar and Grill by raising wages for prep cooks and dishwashers, widely recognized as some of the restaurant industry’s lowest-paid workers.

On July 1, all 22 non-tipped employees got substantial raises, to $15 per hour - $6 above the state’s minimum wage and a nearly 40 percent increase for some of the workers. The motive behind the move comes partly from the owners’ stance on wage inequality.

“For my entire career, the discrepancy between front-of-house wages and back-of-house wages in restaurants has been enormously lopsided, and this has bothered both Nick and me for a long time,” Keane said. “We’ve been looking at what we can do, and we are not saying every restaurant should do this, but we are in the place where we can make it work. Bottom line is we think it’s the right thing to do.”

The business partners said financially, they’ll take a roughly $100,000 hit per year for boosting the pay for their cooks and dishwashers. But in an increasingly competitive environment, and amid Sonoma County’s booming restaurant industry, the move could pay off by staving off turnover among staff and increasing worker productivity.

Keane and Peyton aren’t pushing fellow restaurateurs to do the same, but their move highlights an issue that food industry executives throughout Sonoma County are dealing with amid a low county unemployment rate of 4.2 percent and reportedly high turnover among restaurant employees.

Little by little, such moves are shifting the pay scale in Sonoma County’s signature service industry, which draws food workers, from servers to dishwashers to chefs, as well as patrons from across the world.

Fueled by skyrocketing tourism and the region’s financial recovery since the recession, Sonoma County’s service industry has become a powerful force in the local economy. The restaurant sector has far outpaced the overall economy in job growth and now employs one of every 10 workers, according to state employment data. There are also more restaurants popping up every year - the number of food and drink establishments is up 10 percent in the past five years, and this year’s Sonoma County Restaurant Week generated $3.35 million in economic activity, a five-year high.

“It was our biggest year ever,” said Ben Stone, executive director of the county’s Economic Development Board. “We have more tourists and foodies coming every year, and our restaurants have given rise to that. It’s definitely reflective of the changing economy.”

Mirrors national trend

Pay increases at the Healdsburg Bar and Grill underscore moves underway at the state and national level to boost wages for low-paid employees, spurred, in part, by labor activists and politicians who have advanced mandatory pay raises in the face of income stagnation. Ken Jacobs, chairman of the Institute for Research on Labor and Employment at UC Berkeley, said the region’s economic recovery and the national fight for higher wages is propelling upper management in some sectors to rapidly shift their pay and hiring practices. Restaurant workers, in particular, have become the face of the campaign for higher wages largely because their compensation is left to market forces, and their bosses, to determine.

“There’s no question the movement that has gained momentum in places like San Francisco and Los Angeles and Seattle is having an impact on private sector businesses, especially in the Bay Area,” Jacobs said, highlighting the national campaign for higher wages known as “Fight for $15,” sparked by fast food workers lobbying for higher pay. “We’ve seen more and more businesses do voluntary pay increases over the past year. Part of it is a social statement, saying this is what workers need to get by in these areas. The other is a smart business strategy.”

Jacobs said raising pay can create a more stable workforce and lead to better customer service.

Shortage of workers

Triggered by what some managers and chefs say is a shortage of service industry workers, other Sonoma County restaurants are also upping wages to attract and retain skilled employees. Many also are seeking more workers to keep pace with increased business.

“We’re really lucky - we’re super busy, and we’re getting busier every year,” said Shane McAnelly, executive chef at Chalkboard, an upscale farm-to-table restaurant in downtown Healdsburg. “But there’s so much competition up here that we’re struggling to find talented people.”