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Putting San Diegans to Work Today, Part Three

As published in the San Diego Daily Transcript

by Vince Vasquez

Thursday, February 11, 2010

I began my workforce column series this year by highlighting the struggles of San Diego's construction industry. Now I turn the focus to our dynamic restaurant community, a large regional employer that deserves more regulatory relief from City Hall.

San Diego County is home to an estimated 12,000 retail food facilities, including 6,600 restaurants. Many of these businesses are located in our most prominent tourist destinations and popular urban corridors; the California Restaurant Association estimates that Congresswoman Susan Davis's 53rd District (which includes downtown San Diego and coastal communities from La Jolla to Imperial Beach) is home to 2,037 restaurant establishments, which employ 36,315 San Diegans. Local survey research from 2008 also indicates that, contrary to criticisms of low-paying industry work, directly and indirectly-tipped employees in regional restaurants receive an effective hourly wage that is at least triple and double the state minimum wage, respectively. Good-paying unskilled work is difficult to come by in today’s economy, which makes our recent slide in unemployment all the more painful.

According to the latest state labor statistics, San Diego County has lost nearly 5,000 restaurant & food service jobs over the last twelve reporting months, dropping overall industry employment today to a four year-low. The challenges facing the culinary crowd are more complex than the media narrative of consumer cut-backs in discretionary spending; regional restaurateurs have previously stated that rising food and energy costs as their most serious business problems, followed by rising labor costs and the sagging economy. Restaurants are mostly micro-businesses which operate on very small net profit margins (4.3%-4.6% among 2008 survey respondents with fewer than 100 employees), leaving them particularly vulnerable to rising fees, operating costs and new prescriptive labor laws. Whether the San Diego City Council understands this fact is unknown, but it will become more important that they do in the weeks ahead.

From proposals to raise the cost of municipal entertainment permit fees to hiking linkage fees for all non-residential construction and tenant improvements, San Diego City Hall left the restaurant industry to play mostly legislative defense in 2009, without providing the regulatory breathing room that can retain or create jobs. Helping the industry indirectly by boosting regional tourism or convention business only goes so far to create the favorable regulatory and economic climate restaurant owners need to stay open. It’s important to mention that successfully filling more seats in our region’s restaurants means more local jobs; the San Diego Chapter of the California Restaurant Association estimates that every additional $1 million spent in California’s food and beverage establishments creates 38.3 jobs. History suggests that the search for helpful ideas to aid San Diego's restaurant industry should begin in the Windy City.

In September 2004, the Illinois Restaurant Association and the City of Chicago partnered together to streamline the liquor license process without removing public input, and improved industry inspection policies, reducing costly waiting times for business owners. Chicago government officials also created a user-friendly online “license wizard” that takes restaurateurs through the regulatory steps they need to set up a new restaurant, or renew a license for an existing one. In San Diego, why not consider a limited permit amnesty for restaurants, allowing for undocumented construction and renovation to be brought formally into code compliance without fear of financial penalties? This year, Chicago Mayor Richard Daley received City Council support for a six-month amnesty program that will waive building permit fees, zoning review fees, and all unpaid fines and penalties for business signs, awnings and canopies that hang over public sidewalks. Though this program is expected to cost $90,000 in lost annual revenue for the city, it will be well-received by many restaurants and storefront owners who are liable to pay thousands of dollars in fees that they simply can't afford.

Neighborhood diners, coffee carts and big city restaurants are often the first employer of many working San Diegans, including this author; I started my professional career by spending five student summers in the food service industry, wearing an apron to work everyday. As the National Restaurant Association notes, more than one out of four U.S. adults worked their first job in a restaurant, and nearly half of all Americans have worked in the industry at some point in their career. With the unemployment rate still hovering in double-digits, and school out for the summer in a few short months, now is the time for the City Council to take action and advance new ideas to save and create the restaurant jobs that San Diegans of all walks of life depend on.