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Amanda Cohen on ‘Overpriced’ Food and the Looming Cost Crisis

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An air conditioner, rolls of toilet paper, and paperwork underneath a table. On top of the table are vegetables.

This is Dispatches from Dirt Candy, a column from New York City chef Amanda Cohen that explores the realities of working in the restaurant industry. In today's installment, Cohen tackles "overpriced" food and restaurant costs.

A couple of years ago, a big charity asked me to cook for one of their events. Different chefs each took a table and folks blew big money on tickets. At the last minute they uninvited me, explaining that the tables were very expensive and their donors would be "disappointed" to spend that kind of money on vegetables. That's something I hear a lot. When people are unhappy with their meal at Dirt Candy one of the first things they tend to say is that the meal is overpriced for "just vegetables." Call my food expensive. I agree. Call it overpriced and you're opening up a whole can of artisanal worms.

There are two kinds of "overpriced" complaints. One is when a customer feels there's not enough food on their plate to justify its price tag. The other — the one I want to talk about — is when customers argue that they're being charged too much for what they regard as cheap ingredients, like vegetables. When Northern Spy Food Co. put an $18 carrot dish on their menu, the New York Post was outraged. Ryan Sutton wrote a piece for Bloomberg last year predicated on the idea that expensive vegetables were a tough idea for diners to wrap their heads around. He's not wrong.

Vegetables are expensive at Dirt Candy but that's not because we use expensive vegetables. In general, the cost of your food has nothing to do with the price of my vegetables. When you order my broccoli dogs you're not getting $21 worth of bread and broccoli. At $21 my broccoli dogs are expensive, but that's because I run a restaurant in Manhattan where everything is expensive. You're not paying $21 for your broccoli dogs, you're paying $21 to rent your table; I just trick you into thinking you're paying for the broccoli dogs because that's the accepted convention. 76% of that dish is actually paying for the A/C, my line cook's unemployment insurance, the gas and electricity. The toilet paper.

Eating out in New York City is expensive, so those of us who run small restaurants really want you to feel like your money has been well-spent. We have nice plates, nice silverware, we try to involve you in the narrative of the restaurant, we make sure we have no loser bottles on our wine lists or flaws in our service. But I've been sensing for a long time that a crisis is coming. Customers are almost at the limit of what they'll pay for a night out, and restaurant prices are about to go up.

But before we get to that: What, exactly, determines the price of a dish? Most restaurants determine their prices by figuring out what they need to make each night to stay open. Then they estimate how many customers they can serve in a night. Then they do a little division and determine what each average check needs to be. The per dish prices on the menu are designed to get each table to that magical average check amount. There's a little finessing, but that's essentially it.

The price of ingredients barely enters into it; that's only about 24% of the cost of the dish. Even if a restaurant that served meat suddenly switched to using the most expensive ingredients available, that would probably only drive up their food costs by a couple of dollars per plate.

Right now, menu prices are kept low because labor costs are kept low. You'd be hard pressed to find an industry that gives less benefits and pays its employees worse. That's not because restaurant owners are evil, but because we know approximately what people will pay for food, and so we have to keep our prices in that ballpark. Food costs are relatively fixed. So are most of our other costs (rent, insurance, utilities). But we can always make our staff work harder for the same wages, or we can fire a few of them or, like most small restaurants, we can not give them benefits. But that's changing.

Recently, paid sick days became the law in New York and that's the tip of the iceberg. A rising minimum wage, health care, maternity leave, paid vacation days, all these things are coming for the restaurant industry. They're not coming tomorrow, but in five to ten years they will be a reality and those changes are going to hit small restaurants like mine hard. Chains can absorb these costs better, but small restaurants operate on thin margins and we can't. When our labor costs go up, we're going to have to pass that along in our menu prices.

If you think that food is overpriced now, wait until restaurant owners need to provide health care. That's when we're all going to have to make a choice, not as voters, not as restaurant owners, but as diners. It will be a decision you'll have to make every time you order take-out, every time you order delivery, every time you order a glass of wine: Are the people who serve you, are the people who work for you in the service industry, are they worth what you're worth? Do they deserve the same workplace benefits and protections that you aspire to, if you don't have them already? Do they deserve paid sick days? Retirement plans? Employer-provided health care?

My staff have names. Danielle, Eve, Maurillio, Kyle, Nin, Diana, Yojaira. Are they worth what you're worth? Or are they worth less? Are they your equals, or are they your inferiors? In a few years when those broccoli dogs cost $25, you'll have to make that decision.

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