Sunday, July 30, 2017

THE PRAIRIE EDITOR: The New Restaurant?

In the Twin Cities of St. Paul and Minneapolis there is a
significant new environment for their downtown, inner city
and neighborhood restaurant industry. As a result of a surge
in new regulations, local tax surcharges, minimum wage
and paid-leave laws, the very form of the restaurant and
dining-out experience is changing noticeably.

These changes are taking place across the nation, especially
in the largest cities, but I can only describe with some
precision the urban Minnesota experience.

So-called progressive (leftist) local government elected
officials, the bureaucracies they oversee, and union activists
are precipitating the changes in response to what they think
is a general urban mood that is unsympathetic to the small-
and medium-sized businesses and entrepreneurs which serve
the community.

The market system, however, is not indifferent to changes
imposed on it through regulations, taxes and required worker

As a result, the dining-out experience in the Twin Cities is
rapidly changing.

Restaurant operators have limited options when new costs are
imposed on them. Sometimes, those costs have nothing to do
with local government intervention. Specifically, I am referring
to the always-occurring fluctuating prices for the fruits,
vegetables, meats, poultry and fish and other food products
they must buy for their kitchens which produce the food dishes
they sell in their dining rooms. In this instance, either menu
prices are raised or expensive food products are replaced on
their menus. This has always been a common occurrence in
this industry.

But whatever, the cause for increased costs in the food business,
the basic reality always remains, as it does for every other
business in our society --- the business has to make at least some
profit and/or enable the businessperson to make a living. It’s a
simple law of economic gravity that bureaucrats, elected officials
and political activists often try to ignore.

There are other basic laws.  One of them is the law of supply and
demand. As prices rise, fewer and fewer customers are willing to
pay for the products or services offered. When a restaurant 
raises its prices, it loses customers, especially in a highly
competitive industry like the local food industry.

As is true of every large urban area in the U.S., the Twin City
dining out experience has made enormous strides in recent
decades. The public demand for fresh produce, imaginative
menus, and attractive physical dining venues has precipitated a
food revolution that brings delicious and affordable dining
experiences for most residents. So-called fine dining, hitherto
available only to very affluent Americans, is now available to
almost anyone. Very high-end restaurants, with menus at very
high prices, still exist, but there are fewer and fewer of them.
There is, however, a larger and large group of Americans who
make large incomes, and for whom menu prices do not matter.
They, and a number of business and special occasion diners,
make the very high-end restaurant still viable, but these are
also very sensitive to changing diner habits and tastes. As a
result, many high-end dining rooms in the Twin Cities have
closed --- and very few new ones are opening.

As the clientele for dining out has expanded and grown much
more sophisticated, opening new restaurants has become very
problematic. Individual entrepreneurs are disappearing, and
are being replaced by groups of investors, many of them who
make their money in other fields. In the Twin Cities, new
quality restaurants have been opening and closing in days and
months rather than years. Recently, for example, a cluster of
ambitious upscale Italian restaurants opened in downtown
Minneapolis and its environs --- and a few months later, most
of them are closed.

Caught in the middle of this change are the food servers, the
wait staffs. Imposing dramatic increases in the minimum
wage and paid leave for these workers, as demanded by their
unions and sympathetic political activists, has produced a
predictable but negative consequence --- the disappearance of
the traditional dining out experience of ordering  a meal from
a waitperson. Virtually all major new restaurants opening in
the Twin Cities today, even some higher end ones, have diners
ordering from the menu at the cash register, and having their
meal delivered to their table or even being asked to pick it up
at the kitchen counter. Many diners, required to do this, are
either leaving no or much-reduced tips, and those tips which
are given are shared with both the wait and kitchen staffs.
Restaurants are thus reducing their wait staffs, and often asking
those who remain to do more work. Many already established
restaurants are also by necessity adopting this practice. This
can only produce a net reduction of service staffs, that is, fewer
and fewer jobs waiting on tables.

Part of dining out today is the whole experience, not just a
particular cuisine or menu, but the service and the decor and
the sense of a special occasion. Because food preparation is
so popular today, with myriads of cookbooks, TV food shows,
and increased private dinner parties, eating well at home is
definitely an option. The prices at the grocery store of
top-quality produce, meats, seafood, and wines also makes
home cooking by wives, husbands and singles increasingly
attractive. If you remove important elements of dining out,
such as table service, the incentive to prepare meals at home,
or else buy the food prepared for take-out is magnified

Thoughtful voices by some progressive public figures in the
Twin Cities are already sounding the alarm at the political
cave-in to demands for huge minimum wage increases,
costly paid leave and other requirements which small food
businesses cannot easily absorb. Former Minneapolis
Mayor R.T. Rybak, former Council Member (and now
president of the city’s Downtown Council) Steve Cramer,
and at least one 2017 mayoral candidate, Tom Hoch, are
counseling caution and common sense while so many others
just seem to nod their heads at every demand.

The same is occurring in St. Paul, Meanwhile, there is a
predictable exodus of restaurants from the center cities, and
often premature closings of those new ones which dare to open.
And everywhere, the restaurant experience is shrinking.

This is an ongoing story; let’s see where it leads.

Copyright (c) 2017 by Barry Casselman. All rights reserved.

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