Red Robin eliminates bus boys as restaurants combat minimum wage hikes

Red Robin eliminates bus boys as restaurants combat minimum wage hikes

“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.” (1933, Statement on National Industrial Recovery Act) - FDR

“By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” (1933, Statement on National Industrial Recovery Act) - FDR

Hmm, Fuddruckers only has Busboys. Everything is self serve.

Probably fall. It'd filter out people who don't understand the costs and revenue of their business in the first place.

I've been a bus boy at red robin for a little over a year now and while I don't mind this happening because it will encourage me to find a better job, I'm really interested to see how they handle Friday nights. It gets busy fast and a whole lot of big tables

be careful what you wish for. This would eliminate just about 100% of small and medium sized businesses. An affordable wage is one that allows a person to have a dwelling, food, and health care.

That last one is the tricky one. As long as health care is tied to employers this means that the only companies that can provide a living wage are the ones that are already established. The companies that bought their land decades ago, when it was affordable.

If we could just remove health insurance from employers and have it be guaranteed by the government, that would level the playing field, and lower the cost of entry so that small business owners could pay a living wage to their employees.

Many people could take bigger risks and just work for themselves, without worrying about their family's health coverage.

Businesses that can't afford to pay their employees a living wage and have to rely on the stage to pick up the slack for them don't deserve to remain in business. Fuck em and their shitty slop burgers.

No its not. It's communities sick of picking up the slack while businesses reap the reward. If you work 40 hours a week you should not be on welfare.

How much profits did Red Robin make in 2017? Enough to pay the CEO $2 million a year.

If the guy your paying $2 million a year can't run a profitable company why should I have to help subsidize his employees salary so gets to keep that salary? Seems like the executive staff is the problem.

EDIT: No one is saying this one guy's salary is going to cover the cost. Stop suggesting anyone is.

The point is the CEO complains they aren't making enough money because of raising the minimum wage and have to fire people. Yet they made $451,552,000 in profit last year.

So either A) he's a fucking retard and doesn't deserve his $2 million dollar salary and they should fire him and find someone who can; or more likely B) he's a greedy fuck who thinks you, me, and everyone reading this should subsidize his employees so he can make even more money.

And frankly I'm sick and fucking tired of my tax dollars indirectly boosting company profits just so greedy fucks who run these companies can pay themselves more. If this guy can't run a profitable business because of a slight raise in minimum wage then he doesn't deserve his job.

Just one single Walmart store costs the taxpayers between $904,542 and $1.75 million per year yet they are posting record profits and the executives are paid millions.

Red Robin, Walmart, and so on are more than capable of paying a living wage. But they chose not to because there are no repercussions. And people will defend this practice even if it doesn't benefit them. (Read below). And everyone reading this is paying them whether you shop there or not.

This is a gamble for the company. It's a trade in customer service vs labor cost. If this is how Red Robbins plans to face the future they are going to continue failing. Texas Roadhouse is how you do it, they are staffed to the max every night of the week and double on weekends.

I have no doubt Red Robbins is going to suffer in table turn around on busy nights.

80% of restaurants fail with 5 years, with 60% being in the first year alone (source). Now add on double the staffing costs, and ask yourself: would the number of closures rise or fall?

Do they not have restaurants in countries with better wages and labor rights? This is the dumbest argument I've ever heard. We don't need to reinvent the wheel here people. Just look at what the rest of the OECD is doing.

Should they have opened to begin with?

I don’t know what welfare has to do with work though.

The minimum wage can only be so low because the state is subsidizing these businesses indirectly through welfare. If you pay your full time employees so low that they cannot afford to feed or shelter themselves, your business is taking advantage of taxpayers.

Because every other moron with money to lose thinks it would be cool to open a restaurant.

I have a small business and absolutely would not have been able to do it if I was not a young healthy man with no children. My wife gets her own coverage through work and I go without, which isn’t weird for me, I’ve never had health insurance. If business continues to grow things like health insurance will be pocket change. But for now I’m grateful for my good health.

Minimum wage is a community deciding that jobs that pay below that amount don't need doing. This just proves the statement. The business looked at bus boys and decided to spread that task out among the higher paid staff.

Red Robin's business model is based on shorting their employees.

They can't exist without paying slave wages to their employees.

Sounds like Red Robin is following FDR's wishes, then. They changed their business model to no longer depend on bussers who are paid below a living wage.

Yea, no one is nice to the help desk.

I worked for Red Robin corporate a few years ago. I'm genuinely surprised it's still going. I'm assuming it's on some kind of life support like Applebee's at this point. Technology adoption was horrid, red tape for store managers was insane, food quality was consistently mediocre and they couldn't decide if they wanted to cater to families or the bar crowd. When one didn't work, they'd flop back to the other.

This is just another attempt to save a sinking ship.

Why would you include underpaying hardworking people as part of your risk package?

You usually tip out the bussers a good portion. You want them to like you. Kinda like how you are always nice to Help Desk.

Do you understand how supply and demand works? Anyone could be a bus boy with 5 min of training. A CFO not so much. Plus a bus boy does not generate a lot of marginal profits, thus why the job can be eliminated

Their net income in 2016 was $11.73 Million. At $10/hr, that covers ONE bus boy's salary at each of their locations.

I wonder how many orders of magnitude more people are earning and spending more money via minimum wage increases, compared to the number of busboys this one business fired.

I wonder how many thousands of other company's busboys are now making more money, and have better lives.

And if you lost your minimum wage job, guess what! You can take literally any other job and make at least that much money.

Put another way - if the minimum wage were slashed in half - how many millions of people would be worse off, while companies got rich?

Why do people get married with the high rate of divorce? Because they don't think it will happen to them. Or because they think they will get something worthwhile out of it before they fail.

If a restaurant owner's cost of inventory goes up they raise prices. So why wouldn't they raise prices for labor? This is the question I never get an answer for. I worked at places where the cost of something went up therefore so did the service. Yet anyone fighting against minimum wage increases never seem to address that point.

The federal minimum wage hasn't increased since 2007 and that was to 7.25. Find me someone that says they live off that and I'll show you a liar. And minimum wage doesn't get increased over night either. It increases over time so as not to be some surprise for employers that yesterday they were paying wages and tomorrow they are losing their shirt.

https://www.purdue.edu/newsroom/releases/2015/Q3/study-raising-wages-to-15-an-hour-for-limited-se...

But you realize you can’t fight the laws of economics, right? The ceo gets paid $2mm because there’s a very limited supply of people who can run a fast casual restaurant and make a profit. There’s a very large supply of people who can pick up dishes. That’s why each role gets paid what it does. And no business can function if they can’t make a profit. It’s necessary to pay the investors or the business will fail.

I don’t know what welfare has to do with work though. If the legislature decides to give people money, that’s a separate issue from wages.

I'm sure there are a lot of business models that would be viable with no minimum wage. Are they a net positive for society or is it just more cost hiding in the welfare system? We, taxpayers, already subsidize employers of the working poor (big and small) to keep the costs of cheeseburgers and Chinese retail junk artificially low, we don't need more of that, we need less of it.

Businesses that can't afford to sustain their own labor without government assistance should be allowed to fail so capital can find other more worthwhile ventures. There is an irreducible cost (food, shelter, healthcare) associated with maintaining labor availability no matter how unskilled the labor is and the people who benefit from that labor should pay for it (owners and customers) not tax payers at large.

And dope games

Unless you are the person that just lost their job. I’m sure you think they can go get a better job, though if they could find a better job....why didn’t they already. Also when was a busboy a job considered a job to raise a family on.

This is a very narrow view, if all wages were living wages, the economy and by extension the restaurant industry would perform better because there would be more money in the pockets of consumers.

If you compare CEO pay in the US to other countries, we vastly outstrip them. It's not even close. So yes, they probably are overpaid.

Every American should be guaranteed nutritious, good tasting food; quality housing, clean water, clothing, healthcare, electricity, heat, internet, and paid vacations.

Without a job? well fuck that would be awesome. I would quit work immediately.

Then they should fail.

Blows outback Applebees chili's out of the water. They're not even in the same tier if you ask me honestly. They've got basically every good cut of steak available, their rolls and honey butter are heavenly. I could go on but basically for a chain I can't think of a better place.

I suspect most branches (the ones in states not required to pay minimum wage to tipped employees) will handle it in the same way most restaurants handle labor issues. Pile the work on the people getting paid $2.13 an hour. They will likely hire more servers and give each server less tables.

Only if you're content with allowing people to die in the streets. I, for one, am not generally a fan of having to step over corpses or dealing with aggressive homeless folks.

If your business isn't sustainable without relying on corporate welfare (and people on social services while employed due to abysmal wages IS corporate welfare), then it's not a sustainable business. End of discussion.

It's a shame too because I'm sure there are a lot of people out there with great ideas that that could lead to millions of more jobs, but they just don't want to take the risk.

High price floors create a gap between supply and demand, so that demand shrinks and the supply is underutilized. This is kinda bad when you have corn rotting in the field due to price controls. It’s much worse in this case, because it is people who are locked out of the employment market.

Worse, artificially high wage floors hurt the most vulnerable people in the workforce. Ex cons, dropouts, black teenagers-20somethings etc. are you still okay with this policy?

My gut says it would rise. Everybody wants a restaurant, and they're tough business. But at the same time, you're going to have to build in a reasonable wage for your staff before you can open a new restaurant. It would just be irresponsible business planning not to.

It probably wouldn't end up massively shifting in the end, but it would likely be harder to start a restaurant. The first year failure rate might increase.

Let me clarify, I am 100% for government funded healthcare - I have no qualms with the state safety net for individuals who need it. I also agree with your point that nationalised health care would save employers a great deal - it would simply save us a shit ton all around. I consider health care a human right that should be guaranteed by the state.

Now, what I do take issue with is corporate welfare - expecting the state to foot the bill for companies that refuse to pay their employees enough for the basics of living, like food and housing. I don't know anyone working (sometimes multiple) minimum wage jobs now that don't have to rely on outside support from family or state programs like WIC or SNAP to make ends meet. That's why I have 0 sympathy for these national chains that severely underpay their employees while their upper management makes 6 to 7 figures, easily.

Works great here in Canada. I get supplemental health insurance ($11 a month, gets me %80 percent off prescriptions, vision care, massages, and a bunch of other random stuff for me and my family) but the main stuff is all government based. Yes I pay on my taxes but the amounts works out to about 800 a year, which I dont notice due to the way our taxes work. That and even if I dont use that much per year, Im happy to subsidized other Canadians who do need it. Healthy community healthy society. Single payer is the bomb.

The restaurant industry exists on razor-thin margins

And who's fault is that again?

It is funny how the restaurant business manages to survive in other countries. How much profit did Red Robin make last year?

Burgers and steak are different in that Burgers are made from ground beef. To cook ground beef to browning on its surface still exposes you to undercooked beef with surface bacteria in its center. This is contrasted by steak, where the center never was exposed.

With that said I get my burgers Medium-Well.

If 60% of businesses in this industry fail in the first year (80% inf 5) there are many entering into it who most certainly did not understand that stuff just fine.

Making more initial demands of a would-be owner should hypothetically filter out people who were headed toward failure.

The effectiveness of CEOs is super exaggerated but that doesn't stop them from using that argument to extract more income from the company

The servers will bus their own tables. It's not an uncommon thing in restaurants.

The ones with good business plans and good food (plus the standard amount of luck) will continue to do fine, as the increased cost will be taken into account just like any other.

and they couldn't decide if they wanted to cater to families or the bar crowd.

That's always something that has confused me about these places. They have a bar sort of awkwardly tucked into the middle of what is basically a restaurant people go to with their kids because they don't want to disturb a nicer place. The bar seems like it's perpetually empty.

Uh serving isn’t exactly an easy job. I’ve done boh and foh in many restaurants over the years and the easiest jobs were line prep (prepping the food for the line, working the line is a different story), bussing, and side work. Plus, bussers get tipped out.

The real minimum wage is zero.

I'll just piggyback on this to point out how insanely low that profit actually is. Even taking the peak of 2015... in that year, their revenue was $1.26B. That's a net profit of 3.7%.

Those are crazy thin margins. When you're operating on budgets that thin, it's very, very easy for things to turn sideways on you if you have a couple bad months.

To put things in perspective in 2017, Apple made $48.3B profit on $229.2B revenue... a profit margin of 21%.

They make plenty of money. Their net profit is in the 10's of millions of dollars.

This has nothing to do with not being able to afford it and everything to do with greed.

US is 7th in the world for GDP per capita behind primarily the playgrounds and tax havens of the ultra rich (Monaco, Switzerland, Quatar, Luxembourg etc). Only other countries up there are Norway and Ireland both which have a smaller population than NYC.

Source: https://en.m.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita

You were just calling them greedy for their profits. No? Im asking you what profit level would you not consider greedy.

Comments like this are absolutely hilarious to me.

I make over 100k a year but thats because I have the skills and the knowledge of my field gained over years of schooling and experience.

A bus boy cant do my job just like they cant do the job of any of those executives you just listed.

So what is the value of work cleaning up dishes. Ultimately businesses don’t pay For either of these things, they pay you for the amount of productivity and revenue you can bring to the company.

If you force a company to pay people more than they feel their employees are worth, the employees are going to be the ones to lose, every time.

The biggest hurdle, right now, is that there aren't any jobs available for these workers in which the companies feel that the increased minimum wage is worth their skillset. So many of these people are now going to struggle to find work in a market that doesn't value their skillset as highly as their government is saying they need to be paid. The value proposition for a lot of these workers is all wrong right now. But it's not necessarily their fault, either.

A better start to fixing these income inequality issues is to build into our K-12 education system more skill-based programs that can train people to come out of high school with a better/more valuable skillset in these job markets. If we can have people coming out of high school with a higher set of skills that fit into the market we would see less issues like this, and wages COULD be expected to increase because people are more valuable to their companies.

The market is never wrong. Trying to force the market to move in a way that you want is going to fail every single time. You have to see the market for what it is, and adapt accordingly.

A lot of people don't understand this. I'm young (almost 40 is young right?) and I've been blessed with great health. I farm with my family and also have a side business. If we could fix our health care system it would be great because then I could lure some great help away from other bigger companies to work for me. As it is now I have people that would like to work here but just simply can't afford to leave their insurance. For the record I got insurance the for the first time in my adult life thanks to Obamacare. If that goes away I probably will have to just go get a job somewhere with insurance and close my business down.

Games, that are dope.

I have a Texas Roadhouse giftcard that has been sitting around for over a year. I just assumed it was another Applebees/Fridays/Outback level place. I was saving the gift card for when I had a broke friend that I wasn't TOO close with that I wanted to take out to dinner. Is the quality better than Outback/Chilis and such? Should I just treat myself?

Aren’t those things that actually improve profit margin? Also this was right when the assembly line became in vogue and diminished individuals impact on overall production.

If you force a company to pay people more than they feel their employees are worth

Companies don't pay what something is worth, they generally pay as little as they possibly can while still maintaining (the quality of) operations.

What should their profit be capped at?

That's ignorant.

This is exactly why people I know, and even myself in the past, have not had our own businesses because of the healthcare. I could squeak by if I didn't need to worry about healthcare.

Sadly it is killing competition and entrepreneurs. Both literally and figuratively.

"when poor people have nothing to eat they will eat the rich people" some fancy guy i can't remember lol

The same way most other companies work without busboys, having the waitresses never leave the table without a dirty plate.

What portion of your money do you voluntarily give to the government beyond any form of taxation?

What charitable organizations are you currently supporting, and what portion of your income do those contributions represent?

Isn't this exactly what some people said would happen with higher minwage?

#cassandracomplex

America really began its decline when we stopped paying people the value of their work, and started paying people the cost of their replacement.

Our GDP is probably way higher as well, you have to take the entire picture of the economy when making those comparisons.

Based on my experience working for large corporations (not even in the restaurant industry) it will probably go something like this:

Don't want to pay minimum wage so we're firing busboys.

Fires busboys.

Oh fuck, we need busboys.

Tries to hire busboys. Job market is strong, not enough potential busboys apply, so Red Robin has to offer better wages.

Executives give themselves wages for a job well done.

Any job worked 50 hrs a week should be enough to live on. Part time employment vs full time employment is different. Their only opportunity to rise it to get degrees or certifications. They are hoping that by working a job 40+ hrs a week they can save enough to progress to a better job by getting a certification. How can they save to get higher education or have time to attend class when working over full time and still cant pay your bills. Saying "just tell them get a better job?" Is alot like saying "just let them eat cake?". Its not really about the job its about the hours worked at one or more jobs to try to get some kind of better job prospects. Not everyone had a college fund.

Edit: Upon quick recollection both me and our SO have a grandparent that got their bachelors while a bus boy. Whats bizarre is that people are saying its unAmerican to be able to rise in society working odd jobs hard hours. That was literally the idea of the American dream and Im extremely suspicious of you "patriots" claiming no one used to go back to school and start building their life at odd jobs.

That doesn't change the economics of it. You aren't entitled to own your own business if you suck at it too hard to get it off the ground without paying your employees properly, I shouldn't have to pay the difference just do you can feel all special with your own company. Working hard isn't justification to be an asshole, pay your employees properly or go away. If business owners understood this, they would have alternatives if they do happen to go under. Also, th more money they pay employees, the more money circulates in the economy.

We WANT the robots. In fact, the robots solve the foreign worker issue. Automation of all repetitive, non-creative work is what ought to be happening.

If the food gets produced, and the water gets delivered, and the shelter gets built without any labor cost, then why do we need jobs to survive? We don't.

We will need jobs to thrive. Jobs where every action improves the overall state of the world.

Let the robots come for the busboy jobs. Hell, let them come for all the jobs. We will figure out new things to once we all don't need money.

You don't compare GDP, you compare firm size and cost of living. American CEOs are greatly overpaid and over-exaggerate their importance to a firm's survival.

80% of restaurants fail with 5 years, with 60% being in the first year alone

So? Do they deserve to be open? If you can't pay your employees a LIVING wage, I frankly don't give a fuck what happens to your business. On second thought, I think you actively SHOULDN'T be in business if you can't provide a living wage to your employees.

Yep, counter order and pickup, busboy clears your table. Not a bad setup, especially since you're taking care of dressing your burger anyways.

Also the buns are way, way better than RR.

That’s what I first thought of when I read about universal basic income. Sure, the vast majority probably isn’t going to be a business pioneer. But I’m willing to bet a large enough percentage do have that ability and given the chance to go for it would contribute so much more tax revenue than they otherwise would have.

I think we need to recognize that a large number of people who start businesses really aren't cut out for it. Just becsuse you're a good cook doesn't mean you can successfully run a restaurant. That's why this industry has a crazy failure rate. At the end of the day, I sincerely doubt slightly higher labor costs will make that much of a difference. Excessive rent costs, conversion costs, poor processes, food waste, poor marketing/branding, etc will sink you much faster than slightly higher labor costs (which are marginal costs that can reasonably be adjusted to match sales).

I used to bus years ago and I would frequently make more than the servers because I got a portion of the bar tips.

Even big businesses avoid giving their employees full time hours to avoid benefits like health care though. For example, Amazon, which I know first hand.

and the first group they go after are their employees to make the scapegoat of their bad business management and decisions.

When you say underemployment, you mean that minorities, ex cons, disabled , and other people who are discriminated against in employment will be permanently locked out of employment. They don’t have the opportunity to get a bus boy job, and eventually become store manager and then district manager. They are stuck on square zero forever. That’s a horrible outcome, way worse than having a job and being relatively poor while you are building your skills and employability.

My solution would be to have a minimum income floor that congress funds via refundable tax credits, like the earned income tax credit, dependent tax credit etc. If you work, and you earn less than the floor, the irs sends you a check to make up the difference.

That gets everyone working at the price their labor is worth, and nobody is abjectly poor. We sort of have this already, but I’m sure it’s full of holes.

We can go lower than that. There's a lot of MLM scams where the person has to buy the things they sell.

You assume that people filling those positions have parents helping them or retirement funds or social security for some reason. People busing tables are not doing so for some extra spending money in most communities - they are desperate to earn anything they can to survive

That's not how the world works.

A CEO or top executive is a highly sought after position. There's other companies willing to pay them high dollars, so they get high dollars.

Nobody is fighting to hire bussers away for their skills.

Obviously the value wasnt there if they eliminated the position.

I don't think they are going to come out ahead here.

But they get the "satisfaction" of making their same old "political statement" about how "awful" a livable wage is and how it it is "horrible" for businesses that exist only by paying slave wages to employees. Businesses alway trot out their "we gotta pay slave wages in order to exist" routine every time workers ask for their wages to be consumerate with the profits the company is making. Red Robin just got a windfall tax break, what are they whining about?

Something that would help is lowering the barriers of entry to jobs. Did you know that something like 25% of jobs require licensing now? It's incredibly time-consuming and expensive, with little empirical benefit. In fact, it usually is only done to benefit existing stakeholders by limiting the supply of labor.

It would also help to find a way to reduce the cost of education and training.

It might be a foreign concept on Reddit, but some people like to interact with other humans face to face.

I don't think you get it. The alternative to a low-paying job is no job. For every job there is a maximum feasible minimum wage -- e.g., if you worked for me picking up $10 worth of pennies off the ground every hour, I couldn't possibly pay you more than that. Forcing me to pay you $15 per hour for $10 per hour of work will result in me doing the sensible thing and just eliminating your position.

I know it sound paradoxical, but a higher minimum wage is harmful in the sense that it eliminates a class of jobs -- those with an intrinsic value lower than the minimum wage. If you are a person who simply doesn't have the skills necessary to generate at least $15 per hour worth of value, you won't have a job.

I'm upvoting you for taking the time to do the math, but I want to push back on your statement a bit.

2016 was not a normal year as their balance sheet has 38.33M of "unusual expenses".

Net Income By Year

2012 - 28.33M

2013 - 32.24M

2014 - 32.56M

2015 - 47.7M

2016 - 11.73M

This doesn't really invalidate your point entirely because we're talking about between 1 and 4 bussers per location regardless, but I just wanted to point this out.

There was this book I read a long time ago that was a criticism of both parties. It’s was called “hard heads, soft hearts”.

It basically said republicans are hard headed when it comes to economics and hard hearted when it comes to people. Democrats are soft hearted to people, but soft headed when it comes to economics. I am a republican, and I agree.

I make a logical argument, and people disagree and respond with emotional arguments. I think I’m right, but I realize that other people view the world through a completely different lens. I can at least see the merit in their position.