By Jueseppi B.
Fast food workers’ wages have become a topic of controversy in recent weeks, as employees took to the streets claiming fast food giants aren’t paying them enough to survive.
Enter Moo Cluck Moo, a Detroit-area burger joint profiting while still paying its employees $15 an hour. Brian Parker, the restaurant’s co-founder, explained the philosophy behind paying workers more than the the state mandated-minimum wage of $7.40 an hour.
“The number one investment is human capital,” he told HuffPost Live. “We are investing in the process, in better foods, better quality, better service and better people.”
Parker said his own experience making minimum wage at a job growing up motivated him to ensure his workers earned a living wage. Indeed, fast food workers say they struggle to make ends meet on just above the minimum wage. Media outlets and advocacy organizations recently criticized McDonald’s after the company released a sample employee budget that advised workers to get a second job if they wanted to pay their bills on McDonald’s wages.
To be sure, as a smaller company Parker’s business model is different than those of fast food giants, meaning it may be difficult for the likes of McDonald’s and Wendy’s to adopt a similar policy. Still, paying employees well is working for Moo Cluck Moo; the company is looking to expand, Parker told the Daily Beast earlier this month. And he expects the success will continue.
“We feel we have a good idea [and] we feel consumers will gravitate towards that good idea and support us,” he told HuffPostLive.
Thank you The Huffington Post.
From Crain’s Detroit Business:
Moo Cluck Moo’s $15-an-hour story starts with a lesson in minimum wage
If you pay your employees just enough to keep them from quitting, they will do just enough to not get fired.
I had my reservations about Brian Parker, co-founder of Moo Cluck Moo, and his eagerness to pay $15 an hour for work being done for $7.40 hourly at almost every fast food restaurant in the region.
Have you ever worked for minimum wage? If not, then you probably can’t relate to the struggle millions of Americans face every single day. You’ve probably never had to decide which bill to not pay or pleaded with an anonymous voice to keep your cell phone activated until payday.
At 14.5-years-old, I took my first job making $4.25 an hour as a dishwasher at an independently owned pizzeria. I proudly cashed my biweekly, $175 paychecks – a lot of walking-around money for a young punk.
By 16, I was making $6 an hour – a little better than minimum wage at the time – as a bus boy at a national restaurant chain. Then, one day, the morning dish washer failed to show up for his shift. By the time I punched in, a pile of dirty dishes stretching from the floor to the ceiling had formed at the dish station. My boss laughed as I walked in, told me to have fun and turned on his heel. I quit right then and there without hesitation.
That was the last time I worked in the service industry on an hourly wage. At least as a server you can control your own income.
I say I was fortunate to work for minimum wage because it left an indelible mark on my life. I was fortunate to learn at an early age how to provide for myself, what it means to spend what you earn and the value of liking what you do and how miserable life can be when you don’t.
‘I love what I do every day’
Workers were busy preparing for the oncoming lunch rush when I walked into the much-written-about Moo Cluck Moo at 8606 Telegraph Road in Dearborn Heights at 10:30 a.m.
The restaurant, which isn’t much to look at from the street, opened in April and has already gotten a year’s worth of press, both local and national.
But not for its food.
Employees at Moo Cluck Moo make $15 an hour or about $31,000 a year. In comparison, a rookie Detroit police officer starts off at about $30,000. A newbie teacher in Detroit starts around $38,000. A cub reporter at a daily newspaper averages about $28,000 a year.
The impact of their higher-than-average salaries is not lost on Moo Cluck Moo’s employees.
Lindsay Senia, 23, says she is able to pay her tuition out-of-pocket instead of taking out student loans.
Jennifer Aguilar is able to send her son to Boy Scout camp and can afford to send her daughter to cheerleading camp.
“I love what I do every day and this is very important for me,” Aguilar said. “I can do things for my children that I couldn’t do as a kid.”
Both employees have worked at Moo Cluck Moo since the restaurant’s opening and neither plans to leave anytime soon.
A formula that works
I was skeptical about the long-term viability of a $15 an hour wage. The razor-thin margins of the restaurant industry have claimed many operators.
So how does this work?
Parker says an average shift requires four employees and the restaurant is open 10 hours a day, seven days a week. That means the restaurant is spending $60 an hour on labor, or about $600 a day. That’s $18,000 a month in labor costs alone. Parker says labor makes up about 40 percent of the restaurant’s total expenditures. Food costs are 30 percent.
He doesn’t flinch at the percentages.
“I’m taking less money personally,” he said. “My question is, how much do we have to make? How big of a pile of money do CEOs have to sit on?”
Parker’s belief is that if he takes care of his employees, they will return the favor through hard work, loyalty and improved customer service.
There is a method to the madness, sort of.
Parker said he spent about $150,000 to open the 1,200-square-foot restaurant. He said he offsets the high labor cost through negotiating cheaper rents, increasing buying power and strategic staffing.
Make no mistake, this isn’t a hobby.
Parker said the restaurant is on track to turn a profit this September, prompting him to open a second location in Waterford, a third location in Ypsilanti and maybe even a food truck.
“I’m not altruistic,” Parker said. “But I’m also not trying to extract as much money as possible out of the restaurant.”
Thank you Crain’s Detroit Business.
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