CLEVELAND — Most of us have had that job in the hospitality and leisure business and hoped to get a good tip. Specifically, 1 in 10 Ohioans work in hospitality, but that industry has been struggling to find even more workers.
The U.S. Bureau of Labor Statistics reports that staffing is down nearly 8% since 2019. So now, Cleveland is launching a new grant program to support small restaurants that choose to increase wages.
The hospitality industry is always evolving, between inflation and staffing challenges, Chef Ricardo Sandoval, the owner of Fat Cats in Tremont, says he has made it work. Right now, he pays his servers Ohio’s employee tipped wage of $5.05 an hour plus tips.
“They keep all their tips, and the tips are basically outrageous, so they make excellent in my mind,” said Sandoval.
But today, he had a new employee, Cleveland Mayor Justin Bibb, who took orders while serving up a grant program to help small business restaurants attain employees and pay better wages.
The High Road Kitchens grant program is in partnership with One Fair Wage and High Road Restaurants. The way the program works is that 20 small business restaurants will receive $5,000 when they commit to increasing the wages of their staff to $15 an hour plus tips.
“The best way to make sure that you keep sustainable economic activity happening is to give the people at the lowest end of the economic spectrum is with a raise,” said Mikey Knab, the national director of High Road Restaurants.
The restaurants must also participate in wage models and race and gender training courses. The $5,000 dollars is not expected to be spent in any certain way but instead, provide a financial cushion as they learn how to profitably raise their pay.
“The $5,000 is meant to help them advertise that they are a high road restaurant...to help them with other parts of the operation,” said Knab.
High Road Restaurants is recommending three approaches to profitably increase pay:
No. 1: Increasing the cost of the menu price to cover the service. Knab says this method is used in Japan and is the least popular.
No. 2: Is essentially gratuity; when you get your ticket, there will be a service charge.
No. 3: Pay servers minimum wage, plus tips, which is used across seven states, including California, Oregon and Washington.
That model is the one that One Fair Wage is also pushing to be on the ballot next November. Tracey Messer with the Weatherhead School of Management says if this is made into law, it won't be easy for all small businesses to implement.
“This kind of requirement is going to force restaurants to do things to cut other costs so that they will be able to increase wages, whether that will be changing portions, increasing costs on their menu, hiring fewer workers. The cost is going to have to come from somewhere,” said Messer.
For Ricardo, he’s not sure what he plans to do, but change is something he's not worried about.
For me, I see something that comes up. I just look at it, and I just start thinking, how can I change things for the better? You know, retool, whatever it takes to make it happen,” said Ricardo.
Businesses will have to apply for the grant money by Sept. 30. Also, all of High Road Restaurant's training courses are free for anyone.
For more information on High Road Restaurants, CLICK HERE.
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