The Duluth Local Restaurant Association sent the following eMail to Duluth City Councilors on Thursday morning:
“The Duluth Local Restaurant Association (DLRA) met on March 6 to discuss the earned Sick and Safe Time draft. We were hoping to be able to review the actual proposed ordinance but it had not yet been released. As a reminder, our organization represents over 25 hometown, full-service restaurants that employ over 3,000 full time and part time folks with a wide span of skill sets and a local payroll of over to $30 million.
It has been difficult to watch the hospitality industry that we love be as disparaged as it has been by proponents of this Sick and Safe ordinance. Every day we work side-by-side with our employees. We know their stories, we know their families, we know their challenges, and we CARE about them.
Many of our restaurants have built their business cultures by offering our unique employees strong mentoring, multiple growth opportunities, and career paths through our collection of benefits. Each of us provide unique packages of compensation and benefits based upon our employee’s needs, wants, and desires through the balance of what is sustainable. The proposed draft, which clearly has some details to figure out, will create change and costs to these benefit packages as they exist today. The reality is, that because of our already tight business conditions, we may need to borrow from some of our present benefits (Health Insurance, Free Meals for employees, Vacation time, 401k Contributions…) to allow us to take on the additional expense of ESST and still keep our doors open. A more onerous mandate will make that borrowing even more difficult and drastic.
As frustrated as we are that our local government seems compelled to mandate what benefits our employees will receive, we do agree that Councilor Hansen and Councilor Hobbs have tried to strike a balance that combines input from the community as well as the realities that the effected businesses will feel.
We all have seen the impact that automation has had on other industries. While this automation has been partially driven by human ingenuity, it has also been accelerated by the cost of human labor. We are a PEOPLE industry, and we are unhappy being forced to eliminate our employees in order to stay in business. Because after we redistribute benefits and cut employees to try to remain solvent, the only thing left to do is close doors. We don’t believe that anybody wants loss of jobs to be a consequence of this ordinance. We cannot continue to simply pass these costs to our guests any longer – we are now at the apex of what our guest can afford and we hear it every day and see it in our numbers.
The bigger issues that are seemingly missed by this well intentioned effort are as follows:
1. We have experienced a countless number of inordinate expense increases and a history of additional tax increases that have driven our costs and prices to an inability to compete.
These include increases in real estate taxes (30%), utilities (+30% in the next 4 years), additional taxes (street increase), labor increases (state mandates over the last 3 years), benefits (health care, now mandated ESST) and it is certainly overwhelming us and our customers. Many of us are embarrassed of our menu prices as they exist today, driving customers to find alternative ways to eat out (Sam’s Club, Kwik Trip, grocery delis, etc.) . If this ordinance is so important to the council, it would be very helpful if the city could provide some assistance in an expense reduction, or tax benefit to assist our industry. It certainly seems like there has been very little concern for any incentives/expense reductions to our industry. Just continued increased costs on all fronts.
2. Our locally grown trade has always been a labor of love to display Duluth’s uniqueness, but it is fragile, with very thin margins. Local government seems to be unmindful or disbelieving of this. This has become an incredibly competitive industry in a city of stagnate population growth. We have real solutions to many of the disparities in our industry, and it would require real bravery and leadership to initiate those changes. We are willing to continue to sit down and present our solutions and look forward to future engagement.
3. There have been no answers to how any ordinance of this nature will be enforced and the cost of this enforcement to the City and the taxpayers therein. There is an alarming lack of concern for this component of this particular legislation. This will effectively create a “Dept. of Labor” in City Hall and it will need to be staffed by professionals. Given the City’s financial status and lack of growth, the citizens must be informed of the real costs to them of such a mandate – both in increased taxes and prices, as well as job loss. This must be vetted before any measure is mandated – just like any other responsible policymaking would require.
Note: This eMail was signed by Duluth Local Restaurant Association members At Saras Table, Bellisio’s Italian Restaurant & Wine Bar, Black Water Lounge, Black Woods Grill and Bar, Burrito Union, Clyde Iron Works, Catering By Bellisio’s, Duluth Grill, Endion Station, Fitger’s Brew House, G.B. Schneider, Grandma’s Saloon & Grill – Canal Park, Grandma’s Saloon & Grill – Miller Hill, Green Mill, Grizzlys, 7 West Tap Downtown, 7 West Tap Miller Hill, Greysolon Ballroom, Little Angie’s Cantina, The Lyric, OMC Smokehouse, Pickwick Restaurant & Pub, Rathskeller, New Scenic Cafe, Silos Restaurant, The Boat Club, Sir Benedict’s Tavern, Tavern on the Hill, The Sports Garden, Vanilla Bean