‘Even $15 an hour is a joke.’ Are Miami restaurants ready for the new minimum wage?

Zak Stern didn’t flinch when he saw Floridians vote for a $15 minimum wage.

Stern, who launched South Florida’s artisanal bread craze at Wynwood’s Zak the Baker, has been raising his employees’ salaries over the last three years to reach a $15 minimum this year, despite how coronavirus affected his bottom line.

“Look, we did it. We proved you can do it,” he said. “I baked it into the model.”

More than 60% of Floridians voted for Amendment 2 on Tuesday, raising the minimum wage to $15 per hour by 2026. Businesses will have until Sept. 30, 2021 to prepare for the first hike, when wages go from $8.56 an hour to $10. Wages will rise $1 a year every year until it reaches $15.

But many Miami-area restaurants, which are powered behind the scenes by non-tipped dishwashers, cooks and bussers, have long been preparing for this day. Some started adjusting their business models to raise employee salaries years ago. Others were on the brink.

James Beard award-winning chef Michael Schwartz told his company of six restaurants and more than 300 employees to start planning for a $15 minimum wage more than a year ago, said Sunil Bhatt, the CEO of Schwartz’s Genuine Hospitality.

“I embrace it because I think it’s the right thing to do,” Bhatt said. “I’m glad it passed because it kicked us in the ass to get us there.”

A higher starting salary means Schwartz’s restaurants have less turnover and can retain the employees it has spent money to train.

“When people are stable, they make better employees,” Bhatt said. “There is a corporate benefit to have people making more money.”

For Stern, reaching a $15 an hour salary for all workers meant adjusting his business model, which includes sales to South Florida’s Whole Foods Markets. He eliminated overtime and went to a four-day, 10-hour-a-day work week to cut down on the chance of overtime. “It cut down on the creep of an hour here or there,” he said. It also allowed workers to supplement with other part-time service jobs and also include a day off.

“The team feels less burned out,” he said.

Paying higher wages helped Zak the Baker retain employees, Stern said. It helped keep lower-paid workers from jumping ship for a dollar an hour increase. That cut down on the overtime for staff making up for being down a person and the cost of training a new employee. He figures he saved $1,500 a year per employee he might have lost — and that adds up in the service industry which often sees high turnover.

“A business can integrate any idea — if they prioritize it,” he said.

Ultimately, he said, it also means accepting smaller profits “until we optimize,” something he’s willing to accept as the bakery’s sole owner.

While some restaurant owners might say they have to raise prices, Stern called that “a cheap answer.”

He has not raised prices, he said. Instead, he has focused on retail sales, instead of wholesale, where he makes higher profits. He’s added items to expand the bakery’s menu, offered home delivery and is adding dinner service permanently.

“This is just how I want to run my business,” he said.

J.C. Restrepo employs 10 at his Happy Wine shop on Southwest Eight Street but said paying them all a living wage is a moral imperative. All non-tipped workers make $16 an hour or better.

“The disparity between classes is getting worse and worse,” he said. “Even $15 an hour is a joke. Everyone in this city should be making at least $20 an hour. How are you going to send your kids to college on less than 15? How are you going to buy a house?”

Restrepo emigrated from Colombia and worked his way up from washing dishes in New York to wine steward at the James Beard award-winning Patria before selling wine and buying the shop. He said dishwashers, bussers and lower wage workers, especially from other countries, are often taken advantage of.

“I never forget where I came from. If people don’t understand that, they’re living in a bubble,” he said. “If an operator can’t operate paying $15 an hour, close your doors.”

Pincho, a Miami-based burger and kebab franchise, already pays all of its 150 employees at eight locations above the current minimum wage, said CEO Otto Othman. He said he has seen the higher wage lead to “happier team members and better productivity.”

“Higher wages will most likely lift people out of poverty,” he said, “and that is definitely a huge win.”