megabites

• Not a time to worry about Michelin stars…

  November 16, 2009 @ 1:32 pm | by Tom

  According to a report from the Restaurants Association of Ireland one in three Irish restaurants are in grave danger of closing. It also confirms what many of us have believed for quite a while: that some 80% of restaurants are trading at a loss.

  The RAI are not putting forward any glib solutions to the problems that restaurants face but they are calling for a reduction in the minimum legal wage from €8.65 to €7.65 per hour and, somewhat bizarrely, for the abolition of VAT on drink in restaurants. The first suggestion makes a great deal of sense. The level of our minimum legal wage is a relic of times that are now dead and buried and we will not see their like again (or, if we do, we should be very worrried) and needs urgent revision. But the chances of getting the Government to exempt restaurant drinks from VAT are nil.

  According to the RAI, Ireland is the most expensive country in Europe in which to run a restaurant and I can well believe it. They describe “food input costs” as being a whopping 24% higher than the EU average. And given that we have the highest rate of duty and VAT on wine (including an extra-punitive tax on sparkling wine) it’s a wonder that there are any restaurants left at all.

  Having said all that, this is probably the best time ever to eat out. Certainly in Dublin, where there is just about a critical mass in terms of population. Prices are keen, expecially if you get your timing right, there has been a spate of interesting new openings in recent months, more restaurants are taking more care about sourcing, and, while imagination is still a bit of rarity, there is now a very gratifying choice of styles and cuisines out there.

  However, if the RAI is right and there is going to be a massive cull of restaurants (and it does seem that there are actually more restaurants in Dublin now than there were at the height of the boom), we can only hope that it will be the less deserving ones that vanish. Given the addiction of The Fates to irony you can be pretty sure that some of the casualties will be restaurants that are doing a very fine job. And that some toxic extablishments will still keep their heads above the flood.

  Meanwhile, thanks to The New Yorker, we learn something (not a whole lot, really) about how Michelin inspectors work. The timing is ironic. I guess there was never a time when chefs in Ireland gave less of a damn about Michelin stars. It’s credit rating, not Michelin rating that matters just now.
• Comments Feed
•  | 
• Share This
12 Comments
1.
November 16, 2009
5:04 pm
If it’s all about cashflow then any restaurants where the owner owns the buildings debt free will be at a distinct advantage. I hope the restaurants will be able to negotiate their rents down as there would either be an incentive to close down or open up again or else a new breed will be able to pick over the bones of the fallen.
They have a very strong point on the minimum wage and business rates
Comment by Liam
2.
November 16, 2009
9:21 pm
€306 p.w. is a tough nut to live on. Never mind telling someone thats what they’re worth.
Plus tips of course, depending on your managements take on tips, service charge, and where they should go.
I can’t think of any real work thats worth as little as 7.65 an hour. Can anyone else? And with no tips (Spar stores, Macjobs, janitorial work, cleaners…..)
Minimum wage in this country has never been a waltz in the park. And certainly people clocking up 360 a week (pre proposed cut) have been far from the Tigers greatest beneficiaries. They’ve been more screwed by inflation, rental costs, negative equity and expensive access to education than anyone.
Damn them and their 100 per cent mortgages, and reckless market speculations,
It’s a bitter and grim grind with not enough time or money to work or learn your way out of it. Hacking forty quid per week off the people at the bottom rung is plain wrong.
Sounds glib to me.
It’s like looking at a bank board and blaming the tea lady. Yep. Lets pick on the weakest.
For my next trick you will observe these puppies, and this jute sacking…..
Comment by Keith
3.
November 17, 2009
6:36 am
If the restaurants that are “doing a very fine job” close then they are clearly not doing a fine job. Writing a menu is not simply about what’s tasty and in season. It is an entire exercise in book keeping and business management. In this sense the restaurants that stay open and survive are the ones doing a good job regardless of what is on the menu.
Comment by siobhan
4.
November 17, 2009
5:40 pm
Reducing the minimum wage is a good idea and not just for restaurants but for all small businesses.
If social welfare benefits are being cut in the next budget because of deflation, surely the minimum wage should deflate also.
Reduce the minimum wage and abolish the tipping culture, nothing annoys me more than some snooty bad tempered waiter/waitress expecting a tip just because they are at work and are already being paid 8.65 an hour. My first job was 2.50 an hour in a pizza restaurant, I still remember my excitement at my one and only 50 cent tip. (I worked there for a summer). Later jobs in food service didn’t come with tips either, not even a cheeky tip jar at a till. Reducing the minimum wage might tempt some entrepreneurs back into business and actually create some employment part time or otherwise and might lower the cost of a meal out or a sandwich from a deli.
Comment by Laura
5.
November 18, 2009
1:06 am
Social Welfare cuts are not being introduced because of deflation, Laura, but because there is an insufficient tax base to support the current level of social welfare expenditure, and the savings target the government set out must be met.
So says Cowen in todays debate, anyway. And deflation doesn’t match the proposed cut in salary. Not even close. The cut is twice that rate (based on the CPI twelve month assessment - which includes house prices, unfairly skewing that figures for the those not on the ladder).
I’m guessing most people being paid 8.65 an hour don’t have the luxury of feeling snooty about it Laura. It’s not as if minimum wage was or is a living wage, or kept pace with inflation.
I got paid 1.50 an hour in my first job. It’s no reason for this generation to get shafted too……
Societies are judged by how they treat their weakest. You pay a wage way below what someone can live on, and bellyache about tips, you’ll get the service that buys, and you’ll deserve it too….
Comment by Keith
6.
November 18, 2009
8:10 am
Eating out is all about disposable income . Most people had it in the good times , but with a lot of people out of work eating out goes further down the list .Local authorities were happy to raise there rates during the boom and rents raised also . These charges will have to be looked at again and reduced . Wages aren’t the main cause of concern . If you have low turn over your hardly going to have a high head count on staff . I know from personal experince that some restaurants work a deal with staff that they work six day week in high season and maybe reduced to three or four days in the quiet times but employer agreeing a fixed wage through out the year . I don’t see the reduction on VAT for wine sold in restaurants being a runner , but some restaurants run a bring your own wine policy with no charge for corkage .Some restaurants will close and some will stay open , that’s the way business operates for all sectors now . Unfortunately we can’t prop up any sector now for the sake of it .
Comment by Sean
7.
November 18, 2009
9:25 am
I fail to see what a cut to the minimum wage will do in the grand scheme of things. And of course there’s the feedback effect of further eroding consumer spending and what that does to jobs if you take money off people in the lower income brackets. Rent, insurance and energy costs are the bigger issues.
I must say I baulked at Laura’s post too. It’s the first time I’ve seen the argument that if welfare is dropping then wages should drop too - it’s supposed to be the other way around. I earned £1.85 an hour as a ‘lounge boy’ in the Montrose in the mid-90s, and never saw a penny of the service charge they had, to try and make ends meet as a student. I wouldn’t wish that kind of nonsense on anyone now.
Comment by dealga
8.
November 18, 2009
3:35 pm
jesus h christ, so even failing restaurants now are the fault of the minimum wage? Nothing to do with overpriced dross badly cooked, badly presented, boring menus, (enough goats cheese already), and a determination to fleece you for that glass of water or mineral.
let them close, put the minimum wage folk on the dole, and go home and learn how to cook. If your restaurant meal depends on you paying someone a slave wage to eat it, then you dont deserve it.
Comment by shellshock
9.
November 18, 2009
4:01 pm
Beat you all - my first job was A Pound an hour. My last job bearing trays was 7-something in a place that lasted about 6 months. Before that, 5 punts in a place that lasted 12 months. Had a lot of jobs that paid less than whatever the rate is now and am still here to moan about it.
Whatever the rate is now is a relic of Marynomics from when she was commerce secretary, and I don’t believe she understands life work or business much. The question is, what be a sensible rate and the answer will be found through mathematics not polemics. Oh and if not abolish tip culture which is suggested, lets formalise it at 10% because nobody has a clue what to do and yon Irish folk are VERY mean when it comes to tips, perhaps the meanest in the whole wide world.
Comment by Emperor Zero
10.
November 19, 2009
1:17 pm
We live in a fluid economy and if you fix one element of it the effects will show up somewhere else. Fix the minimum wage too high and you discriminate against young people who might want to work for less to get a foot on the ladder also you will quite likely create more unemployment as hours worked will drop. There is no magic rate that people should be paid , the market is the best tool to decide.
Comment by Liam
11.
November 20, 2009
1:40 am
The rate is fluid, Liam. People between 16 and 18 are paid a lower minimum wage, dependent on age, and length of service.
Alo, in specific circumstances, people on training programmes are paid rates below minimum, again staggered on length of service.
“Fix the minimum wage too high”
Define too high……
The market did a terrible job at bank regulation. None too good at wage regulation either….
Comment by Keith
12.
November 24, 2009
2:36 pm
Keith, didnt see your post until now, I’ve no idea what the rate should be which is why I dont believe in a State minimum wage.
Comment by Liam

Sorry, the comment form is closed at this time.