Ingredient Missing from Restaurant Sustainability

I found interesting in a new survey by the National Restaurant Association: that only 39% of restaurants overall recycle plastic, cans or glass.

This includes nearly half of all full service restaurants, but only a third of quick service restaurants (fast food.)  The percentage that recycle cardboard and paper goes up to 67% and 66% respectively.

Around 61% use products made from recycled materials but only 4-in-10 use products that could be composted.

In fact, only 17% compost food waste, although 75% regularly track the amount of food waste.

A 2012 report noted that food serve operations alone lost 86 billion pounds of food in 2008 or 19% of the U.S. retail supply.

Between 4 to 10 percent of food loss in restaurants is lost during kitchen preparation.  Diners waste, on average, 17% percent of meals or more only 45% is taken home as leftovers.

Only 22%, including 20% of full service restaurants, donate leftover food to food banks or other groups.

This contributes to the fact that 40% of the nation’s overall food supply is going to waste each year.

On average, each American wastes 209 to 254 pounds of edible food each year.  In the Eco Pulse survey last year, 39% of Americans felt the “most green guilt” over wasting food.

One area of “sustainability” conspicuously missing from the NRA survey is the number of restaurants paying at least a “living wage.”

For nearly two decades now, how businesses treat people has been one of the three pillars of the “Triple Bottom Line” of sustainability.

In a poll of small businesses this year, 61% of those in the restaurant or retail industries supported raising the minimum wage.  Of course the minimum wage is nowhere near the livable wage which is computed specifically by areas of the country.

The restaurant business is tough, especially for locally-owned chef-driven restaurants that give places such as Durham, North Carolina where I live a “foodie” reputation nationwide with visitors, a characteristic now cited as important on “intensity” indices by leisure travelers including 71% of Millennials.

But so is sensitivity to prices.

As noted by the Durham News Service, a new breed of local chef-restaurant owners in Durham are now leading the charge across the nation to voluntarily pay their co-workers a living wage.

It is based on the sound business principles such as paying people a living wage and a sense of fairness resonate just as much with residents and visitors here as using locally sourced foods.

Polls by both Gallup and Harris Interactive, show that among the several industries in the tourism sector, restaurants are viewed well above average with a net positive of 60 points and 53 points on public opinion polls respectively.

But that doesn’t mean this handful of distinct industries shouldn’t work on improving outdated business models to be fairer when it comes to treatment of employees.

By nearly 4 to 1, Americans are now more likely than in the past to investigate business behavior before buying including 6-in-10 who decide not to do business with an entity based on how it conducts itself and 7-in-10 who talk about it in conversations with others.

If you think that won’t matter, just ask the NFL.

Depth Chart Inequity

It has come to light this month that many clubhouse workers for Major League Baseball teams are paid on a per game basis, an amount that is equivalent to making less per hour than the minimum wage.

The average player in that league makes $19,753 per game during the regular season or about 359 times more than a clubhouse worker.  Compare that to the fact that, on average, CEOs in major companies make 273 times more than the average worker there.

In 1965 during the first half of my senior year in high school, the ratio for CEO to worker pay was 20 to 1 (Figure C.)  Back then, my baseball hero, Mickey Mantle, who starred on the most successful team, made only 3% of what the average player in the same league makes today, or 23% when adjusted for inflation.

The federal minimum wage today is about 6 times what it was back then, but if adjusted to inflation, it should be more than 7 times by now.

It would need to be more than 10 times to be considered a livable wage.  Significant majorities of Americans, regardless of political affiliation, support setting this right.

The average Major League career is only 5.6 years.  For National Football League players it is only 3.5 years.  Stories are legion of star professional players who end up broke.  I wonder what the average is of those who serve them in the clubhouse?  There is probably no comparison.

For several reasons, NFL Hall of Famer Steve Young has always been someone I admired.  It’s not just because we went to the same university - seven years apart - nor because our great (x3) grandparents hung out together.

It’s not even because he speaks out for LGBT rights or because he was once 8th on the depth chart in college, about as far as I got in high school, nor is it because he became the highest paid professional player when he went pro.

I think it mostly has to do with how he handled that success.

In the early 1980s, the late Rolf Klug, then a friend and for many years a mentor of mine, challenged me to set aside 25% of my annual income in savings where I couldn’t touch it unless it was a dire emergency.

I began with 10% and eventually worked my way up to more than 35% before I retired several years ago.

Young was an inspiration because when he signed his first pro contract for $40 million in the early 1980s,  it called for putting $30 million in an insured annuity and spreading the rest out annually.

Of course, I never made anywhere near that kind of money but I could have saved even more had I followed his lead in one other area.

In 1987, when he became back up to Joe Montana, whom he would succeed five years later, Young was reportedly still driving a 1965 Oldsmobile Cutlass with 270,000 miles on the odometer.  In stark contrast, Joe drove a different luxury sports car to practice each day.

As it was, Steve Young never funded that annuity from the terms of his first contract.  The Donald Trump enabled USFL folded and Young was subsequently a flop with Tampa Bay, his first NFL team.  But he didn’t give up.

He kept on working to improve, becoming a starter again many years later with the 49ers and retiring a sure Hall of Famer.  Young eventually co-founded and serves as a managing director for Huntsman Gay Global Capital as well as the Forever Young Foundation for development of youth.

Oh, and the year after he completed a law degree in 1994, he threw a Super Bowl record six touchdown passes, earning MVP in that win.

But he isn’t riding on his fame.  There are no reminders of his former career in his office at HGGC but there is still the drive of a person who began 8th on the depth chart.

He is the antithesis of some other professional sports “stars” who ended up broke, and an inspiration to many.

A Solution for Tourism’s Achilles’ Heel

Second only to dining, retail shopping is the second largest beneficiary of tourism spending.  Unless drawn to destinations distinctive for place-based assets such as small independent retailers, for many trapped in the geography of nowhere tourism is only a form of generic shopping.

But when it comes to industries across the tourism sector of the economy, retail shopping is emblematic of an even more serious Achilles' heel, in my opinion.

Results from a remarkable surge in shopping during this past Thanksgiving weekend are heartening for continued economic recovery, but they also illustrate that as more and more daily shopping shifts online, tourism will become even more essential to store-front retail.

Of more significance to anyone taking a long-view at retail or any of the other five or six industries that comprise the tourism sector of the economy is a study by economist Dr. Catherine Ruetschin that was published earlier that same week by Dēmos.

Many jobs in tourism, including retail, don’t fall into the stereotype of low wage but far too many do.  Those leading the tourism sector, which is fueled by community-destination marketing, are plagued by the majority who still refuse to pay a “livable wage,” none more so than those in retail.

Even more than from lack of enlightenment, the tourism sector’s relationship to “livable wage” is plagued by the condition sociologists and economists compared in 20th-century observations about the resistance of hockey players to wearing helmets.  Even though nearly everyone acknowledged they were needed, fearing some unidentified disadvantage, few would use them until they were made mandatory for everyone.

In her study, Dr. Ruetschin notes that as of 2011, retail generated $4 trillion in annual revenue, comprising 6 percent of US Gross Domestic Product, employing 15 million people.  But according to the Bureau of Economic Statistics the typical retail sales person earns just $21,000 per year with cashiers bringing home an average of $18,500.

Even before being adjusted for inflation, this is less than I made nearly 40 years ago as a start-up community-destination marketing executive.  Meanwhile, the nation’s leading retailers, according to the analysis, earned $35 billion in profits during just the first half of 2012 and paid out $12.8 million in dividends, financed in large part by increased workloads and forfeited wages.

Ruetschin’s analysis and recommendations focus on the 42% of all workers primarily employed by large retailers (1,000 or more workers) in year-round positions.  She illustrates that for these giants paying low wages is a choice not a necessity, and that it is bad for business, the economy and society.

The study estimates that establishing a wage floor of $25,000 a year ($12.25 per hour) at large retailers would generate between $12 million and $15 million in new consumer spending and would result in 102,000 to 132,000 new jobs.

Directly impacting 3.5 million workers and their families which totals 5 million overall, this would take less than 1% of overall sales, much of which would be offset by the job creation and new consumer spending as well as increased productivity.  The change could be weighted at the lower end of the scale and tapered upward so as to not impact other ranges.

It could be done with less than an average of 15 cent increase per consumer per shopping trip while lifting millions of the working poor out of poverty.

Retail’s Hidden Potential is a must read for everyone in the tourism sector.  It leaves unresolved only that pesky condition found among hockey players: how to execute a win-win-win change without making it mandatory.

Maybe those in the tourism sector who are willing to spearhead the change can learn from the arbitrary move made 100 years ago by another tourism pioneer:  Henry Ford, raised wages in 1914 in already-high-wage Detroit.  The $5 per day was part base pay and part results-behavior-based incentive and Ford knew he would make up the difference in reduced turn-over and productivity.

It didn’t hurt that their new daily wage and increased productivity made it possible for employees to buy the Model T cars and trucks they were building for Ford along newly-industrial-scaled assembly lines with standardized parts which in turn had been made possible with increased company profits.