Cost of Living + Lack of Cooks = Problems for Restaurant Owners

The problems faced by restaurant owners and their employees because of the increasing cost of living

Over the past few years I’ve been hearing from many restaurant workers that they are having an increasingly difficult time staying in Portland, because the cost of living here is going up so quickly. Lately they have taken on a more desperate tone, saying that restaurants can’t afford to pay more, yet their rents are rising through the roof. Their point was driven home, when I received a 23.5% rent increase a few weeks ago, which has given me serious pause – my rent is now almost equal to my pension, and after a week of looking at insanely priced apartments in the Portland area, I’m changing my focus to other cities around the nation as potential places to live.

If you follow the local news, you’ve probably been seeing stories like these –

ApartmentList.com – In a list of the 10 cities with the fastest growing rents, Vancouver WA comes out on top at 9.8% in the last year. Portland comes in at number 4 at 8.4%. In Portland, the current average price for a 1 bedroom is $1,300, 2 beds $1,550.

KGW News – City data shows average Portland rents rose from $850 in 2008 to $1107 this year.  The website Zillow puts the average rent much higher, at $1587. That’s up over 7 percent in a year, which is twice the national average.

So what is a retiree, disabled person, retail worker, cook, gas station attendant to do? In the past, service industry employees moved towards the suburbs.

KGW News – Think moving to the suburbs would save you from rising rents? In the Portland metro area, that’s not exactly the case. Beaverton, Hillsboro, Gladstone and Milwaukie all have average rents of around $1,500 a month.

It’s true; none of these cities are much cheaper than the Portland market.

Oregon House Speaker, Tina Kotek is pushing forward with a proposal to increase the minimum wage to $13 an hour by 2018; it’s now at $9.25. Quick math shows that you would have to work over 100 hours at the proposed rate to afford the current rent of the average Portland apartment. Throw in food, required insurance and other essentials and minimum wage increase aren’t really going to make much of a difference.

I was mulling all of this over in my mind when I came across this article in The Washington Post, called “The Crippling Problem Restaurant-Goers Haven’t Noticed, but Chefs are Freaking Out About”. According to the piece, restaurants are having a very difficult time finding cooks.

It’s also an issue in New York, where skilled cooks are an increasingly rare commodity. “If I had a position open in the kitchen, I might have 12 résumés, call in three or four to [try out] in the kitchen, and make a decision,” Alfred Portale, the chef and owner of Michelin-starred Manhattan restaurant Gotham Bar and Grill, told Fortune recently. “Now it’s the other way around; there’s one cook and 12 restaurants.”

…One of the clearest obstacles to hiring a good cook, let alone someone willing to work the kitchen these days, is that living in this country’s biggest cities is increasingly unaffordable. In New York, for instance, where a cook can expect to make between $10 and $12 per hour, and the median rent runs upward of $1,200 a month, living in the city is a near impossibility. As a result, people end up living far from the restaurants where they work. Add to that how late dinner shifts can end, causing people to arrive home well into the night.

The story goes on to say that if you figure the significant amounts of debt that culinary students accumulate, it is no wonder that more people aren’t jumping into the profession.

It’s not as if restaurants are cheating workers out of heaping piles of cash, either. There simply isn’t a whole lot of money circulating. The National Restaurant Association estimates that the median profit margin for mid-level establishments (those with average checks of $25 and higher) was 4.5 percent.

Add the difficult working conditions, job switching and overall burnout of most restaurant kitchens and you have a real problem.

“It’s tiny and hot, not much room to move,” Andy Ricker, the chef and owner of Pok Pok in New York told Grub Street in 2013. “You’re dehydrated, and it’s crazy busy; the floors are greasy; there’s flames and water. It’s not like being in Kitchen Stadium.”

They also point out, the steady inflow of Mexican immigrants who are some of our best cooks, has reversed itself. “By 2012, net migration to Mexico was already zero, or even negative”.  The Washington Post article is well worth the time it takes to read.

It’s no wonder that restaurants are looking more and more into automation. There are lots of boring kitchen chores that can be done by electronics and robotics, and many companies are jumping into the field. It makes me wonder what the average restaurant will look like in 20 years.

I don’t see an answer to any of these issues, but they need to be considered by city leaders and our lawmakers unless they want to start tossing Twinkies into the fryolator themselves.

[In the meantime… if anyone knows of a nice, reasonably priced apartment that takes a dog, I’m looking!]