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To Tip Or Not To Tip

Posted on April 13, 2018 by in

The idea of eliminating tipping in restaurants has been brought up more in the media lately, but it is hard to say what will happen to servers’ overall salaries if tipping is eliminated. 

Barcito restaurant owner Andrea Borgen has eliminated tipping in her restaurant. Barcito is a restaurant located in downtown Los Angeles, and the restaurant has been using the so-called hospitality-included model since 2016.

“I’ve been able to create a work environment where I am able to provide stable wages for my employees,” Borgen said. “Their income is stabilized much more dramatically. On average, they make the same amount as they used to make when they were making tips. It’s just not as many peaks and valleys. We’re also able to pay the kitchen [staff] a little bit better as a result, and we’re able to provide all of our full-time employees with health insurance.”

Being able to provide employees with health insurance is rare in the restaurant industry. A couple of years ago, several Los Angeles-based restaurants attempted to provide their employees with health care by adding a 3 percent surcharge to their customers’ bills. Customers were given the option to ask that the surcharge be removed, and a few reportedly did.

Another issue in the restaurant industry has been the increase in California’s minimum wage.  Some local restaurant owners say this puts even more pressure on their ability to stay in business. Workers say they are glad of the raise, but still worry about their ability to make a living through tips.

“Tipping is incredibly unstable,” Borgen said. “There have been countless studies that have shown that it is sexist, and racist, and completely depends on the guest’s mood on that particular day. The idea [of eliminating tipping] was, at the end of the day, for the guest to still pay the same amount for the same experience, but on the back end of things; they are distributing the funds in a different way.”

Some restaurant consumers have raised concerns about the idea of eliminating tipping.

“One big issue, of course, is whether service declines if you are guaranteeing people money,”  CSUN Professor of Marketing Art Shulman said, “and to what extent does service decline. People don’t have to work as hard, maybe, to make their money [if] they get paid anyway.”

“I do like the ability to control the amount that I’m leaving,” Shulman said.

“If there is an employee that is not meeting their potential, and that is not exceeding our customers’ and our guests’ expectations, [then] we as a business need to address that,” Borgen said. “It can’t just be that every individual costumer or guest gets to decide.”

 

Moderator: Kelcey Henderson

Producers: Karen Elle and Son Ly

Anchor: James Farr

Social Media Editors: James Farr and Savannah Palacio

Reporters: Karen Elle, James Farr, Kelcey Henderson, Son Ly and Savannah Palacio

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California Dreaming: Affordable Rent

Posted on May 13, 2016 by in ,

It is becoming even more expensive to rent in Los Angeles, according to the new 2016 Affordability Report by the California Housing Partnership.

With over 4 million residents,  Los Angeles has more people living in it than ever before, and experts say there is just not enough room. It is no longer economically feasible for most to live in LA County.

On average, residents pay over $2,000 dollars a month in rent. The area has a high number of low-income tenants, and many are rent burdened.

“The common thinking is that you shouldn’t pay more than 30 percent of your income in rent,”said Elizabeth Blaney, the Co-Executive Director of the Boyle Heights community organization Union de Vecinos. “I think that should be a little bit lower, because 30 percent still is a lot for a lot of low income and extremely low income families,”

New data shows that on average, those who are considered low income are spending 71 percent of their paychecks on rent. They are left with only 29 percent to spend on food, transportation, health care, and other needs.

“What you have is an increase in demand, which means the economy is doing really well,”said CSUN Economics Professor Shirley Svorney, “so it’s kind of like when we have congestion on the freeways. It’s because people are buying houses; that’s what pushes up the prices. On the supply side, there’s a lot of restrictions on building, regulations, zoning, and other types of government requirements that make it more costly to build.”

Svorney said another factor driving up housing costs is that Los Angeles is an agglomeration economy. This means that more jobs are located closely within the area, making the real estate even more valuable.

“A lot of middle class people are leaving,” said CSUN Political Science Professor Tom Hogen-esch. “Teachers and firefighters, even people in the traditional professions, are facing this. They’re sort of middle class, housing poor, and so almost everybody is under at least some pressure in terms of the cost of housing here.”

The Ellis Act is a state law that says landlords can rightfully evict tenants in order to “go out of business.” The entire building can be cleared out. This is one of many tactics used by landlords to tear down affordable housing and turn it into high priced housing.

California is the number one state in poverty rates when housing is taken into accounted. The 2016 homeless count by the Los Angeles Homeless Services Authority found that 46,874 homeless people are living in LA County. Experts say there are many reasons for homelessness, but lack of affordable housing is certainly one.

In order to rent “burden free” in this city, a household would need to make more than $40 an hour, four times the current minimum wage.

 

Moderator: Haley Kramer

Anchor: Ajo Adelaja

Producer: Valerie Hernandez

Social Media Editors: Ajo Adelaja and Valerie Hernandez

Reporters: Ajo Adelaja, Harry Bennett III, Jarvis Haren, Valerie Hernandez, Haley Kramer, Sofia Levin and Mariah Robinson

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More Money, More Problems?

Posted on October 4, 2014 by in

President Obama has called for an increase in the federal minimum wage from $7.25 an hour to $10.10 an hour. California’s minimum wage went up to $9 per hour in July, and will go up to $10 per hour in 2016. Mayor Eric Garcetti has proposed  gradually increasing the minimum wage in Los Angeles to $13.25 per hour in 2017. A measure recently passed in Los Angeles that will increase the minimum wage to $15.37 for all hotel workers at hotels with at least 150 rooms by July 2016.

These minimum wage changes have sparked debate nationwide. Seattle has already approved a minimum wage increase to $15 per hour, while some residents of San Francisco and Portland are hoping to do the same.

Labor union leaders say these minimum wage increases will increase the quality of life of low wage workers.

“Raising the minimum wage is a worthy pursuit,” said Rachel Torres, a research analyst for Unite Here Local 11, an L.A. Based union, “but I don’t think anyone can say with a straight face that by working $9 an hour you can support yourself, let alone a family. It means living paycheck to paycheck and really struggling to pay rent. Food prices and gas prices have gone up exponentially, while wages have stagnated.”

But an increase in wages doesn’t come without consequences, according to Dr. Glen Whitman, an economics professor at Cal State Northridge.

“As you raise the income of lower income people, the result of that is actually a reduction in the amount of social benefits and programs that are available to them,” Whitman said.

CSUN Economics Professor Shirley Svorny said a better way to help lower income Americans is through the Earned Income Tax Credit, or EITC. The EITC is a tax break for low income workers, designed to help them keep more of what they earned.

“If your salary goes up by a certain amount, if you lose benefits that are equivalent, you could lose money,” said Svorny. “Temporary aid to families, the food program, the nutritional program, and health care benefits, are means tested, so the poorer you are, the more money you get for those programs. So if you’re really trying to help the poor people in the U.S., the better way is to increase the EITC, not to increase the minimum wage.”

Svorny said most poor families don’t have anyone in the labor force, and most people who earn the minimum wage aren’t poor. She said she questioned why the government is choosing to raise the minimum wage instead of increasing the EITC, if raising the minimum wage isn’t the best option for the poor.

“One answer is the government doesn’t have to pay for [a minimum wage increase], whereas if they wanted to increase the EITC, which would directly help the working poor, they would have to pay for it,” Svorny said. “This way, it makes it look like they are doing good.”

Some economists argue that increasing the minimum wage also leads to a loss of jobs, as company owners try to keep their  labor costs down while being forced to pay more for labor.

“If you have two programs to choose between, [and] one of them will increase compensation but also has a good chance to reduce the number of jobs, [but] the other will raise compensation and is actually likely to boost the amount of employment, which is the obvious program to choose?” Whitman asked. “To me, the obvious choice is the one that has a positive effect on both fronts, and yet we have chosen the other one, which has tradeoffs.”

A Pew Research Center poll shows the majority of Americans support an increase in minimum wages. The U.S. income inequality rate is at the highest it has been since 1928, and may be one reason for the widely held perception that lower income Americans need help, and that the time has come for a minimum wage debate.

“This is a life and death matter,” Torres said. “This is not political maneuvering. Raising the minimum wage is not a cure-all by any stretch of the imagination — we need to think broadly and comprehensively to raise all boats — but I do think it’s a start. When folks have a couple extra dollars in their pocket, that’s the difference between paying their rent on time or not and having enough for groceries.”

 

Moderator: Courtney Wallace

Producer: Laura Camelo

Anchor: Calsey Cole

Reporters: Roy Azoulay, Andrea Bautista, Strongman Osom and Robert Zamora

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