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Food Fight
In a story rich with irony the Senate, led by Democrat Dianne Feinstein, has voted to privatize its restaurants and food services. The House privatized twenty years ago. The result? Sort of like East and West Berlin.
In a masterful bit of understatement, Feinstein blamed [millions of dollars in losses] on "noticeably subpar" food and service. Foot traffic bears that out. Come lunchtime, many Senate staffers trudge across the Capitol and down into the basement cafeteria on the House side. On Wednesdays, the lines can be 30 or 40 people long.
House staffers almost never cross the Capitol to eat in the Senate cafeterias.
Naturally some of Feinstein's colleagues were not pleased.
In a closed-door meeting with Democrats in November, she was practically heckled by her peers for suggesting it, senators and aides said.
"I know what happens with privatization. Workers lose jobs, and the next generation of workers make less in wages. These are some of the lowest-paid workers in our country, and I want to help them," Sen. Sherrod Brown (D-Ohio), a staunch labor union ally, said recently.
The reporter adds without comment, "The wages of the approximately 100 Senate food service workers average $37,000 annually." Who says we can't get a better press corps?
Feinstein had an ace in her sleeve, however, and when push came to shove she unleashed her threat. Feinstein warned "that if they did not agree to turn over the operation to a private contractor, prices would be increased 25 percent across the board." Well that was it - the Senate voted to privatize.
Posted by Alex Tabarrok on June 10, 2008 at 07:30 AM in Political Science | Permalink
Comments
What does the "The reporter adds without comment, "The wages of the approximately 100 Senate food service workers average $37,000 annually." Who says we can't get a better press corp?" comment mean for those of us in Europe who have no idea how $37K/year fares in comparison to comparable jobs.
What do the house food service workers make, on average?
Posted by: Joe at Jun 10, 2008 8:08:25 AM
"how $37K/year fares in comparison to comparable jobs"
Compared to what comparable jobs? Other cafeteria workers with a 1:1 ratio of worker to those served who work for the Senate? Fair.
$37k/yr is way too little for having to serve those people.
Posted by: Andrew at Jun 10, 2008 8:19:31 AM
Fantastic story. ;-)
Posted by: Speedmaster at Jun 10, 2008 8:22:20 AM
If by "some of the lowest-paid workers in our country" the honorable senator meant in the bottom half, she may be right.
http://www.ssa.gov/OACT/COLA/central.html
Posted by: Andrew at Jun 10, 2008 8:23:12 AM
I think the reporter wants to imply that they aren't paid that much now, and per Sen Brown, they are going to be paid even less. I am guessing that the workers at the House facilities have taken the jobs of their own free will, so they must be paid enough to make the bargain. Incentives matter, and I guess the proof is in the pudding, or something.
Posted by: Rich Berger at Jun 10, 2008 8:23:12 AM
Word to all those MR readers who voted "Yea." I wouldn't order the chicken salad until after the new workers take over.
Posted by: Andrew at Jun 10, 2008 8:30:30 AM
This episode is pure poetry. Thanks.
Posted by: Daniel Klein at Jun 10, 2008 9:18:01 AM
How did Obama vote? How did McCain vote? What about those Senators on the "short lists" for VP (Lieberman, Edwards, Graham, Clinton)?
Posted by: Peter K. at Jun 10, 2008 9:21:23 AM
How did Obama vote? How did McCain vote? What about those Senators on the "short lists" for VP (Lieberman, Edwards, Graham, Clinton)?
Posted by: Peter K. at Jun 10, 2008 9:21:57 AM
$37, 000 sounds like quite a lot to be honest. That's what...£18, 000?? It depends on what you mean by 'food service' but for serving staff that doesn't sound bad :s
Posted by: Rory Turf at Jun 10, 2008 9:25:12 AM
$37,000 is a very high average for this type of work. The reporter is noting that these workers are paid very well.
"Median annual wage-and-salary earnings of food preparation workers were $17,410 in May 2006. The middle 50 percent earned between $14,920 and $21,230. The lowest 10 percent earned less than $13,190, and the highest 10 percent earned more than $25,940. "
http://www.bls.gov/oco/ocos161.htm
I would note that pretty much the same thing occurs in corporate cafeterias. The food quality improvement when Aramark took over our corporate cafeteria a few years ago was dramatic. The problem isn't so much government [although that doesn't help certainly] as trying to run a business that's far removed from what the company really does.
Posted by: ZBicyclist at Jun 10, 2008 9:28:32 AM
On the other hand, ZBicyclist, one of the major liabilities of outsourcing food is that the employees are viewed as a profit center -- compare cafeterias at IBM versus, let's say, Google. At IBM in the 1990s, the food got so expensive that most of us started going out for lunch, costing the company some free overtime in many cases.
(You can certainly outsource food without making the mistake of then trying to turn the employees into a profit center, but I have yet to see it happen).
Posted by: M1EK at Jun 10, 2008 9:35:36 AM
M1EK makes some good points, although I might note that companies can view employees as a profit center without outsourcing food.
I particularly like M1EK's point about "costing free overtime". One of the big benefits of staying in at the office cafeteria is the opportunity to do cross-departmental networking, and the ability to get back to your desk faster.
My own company seems to be trying to make us a profit center by getting us "special rates" on fitness centers, car insurance, etc. These may be sent to our homes, or sent via company e-mail.
Not only are the rates not so special, they seem oblivious to the fact that reading -- or even just deleting -- these e-mails on company time is a productivity drain.
Posted by: ZBicyclists at Jun 10, 2008 9:50:32 AM
"outsourcing food is that the employees are viewed as a profit center...costing the company some free overtime in many cases."
Funneling money back into the economy by reducing the amount of time Senators spend crafting legislation sounds like a no-brainer to me.
Posted by: Andrew at Jun 10, 2008 9:52:14 AM
The 37k salary might not be totally out of line; remember, we're not comparing the dining room to Applebees, but to high-end restaurants. I remember a NYT article a while ago about the servers at Peter Luger's, who tend to stick around for about 10 years, learn the business, and go on to open their own restaurants.
The more pertinent question is why they have 100 employees for such a limited market; that's about four times the kitchen staff of a 5-star hotel.
Posted by: Independent George at Jun 10, 2008 9:56:25 AM
Listen, if you think a publicly owned restaurant on Capitol Hill is bad, I've heard that there are vast institutions of higher education in this country--known grimly as "state schools"--that rely on tax dollars to pay libertarian economists (much as private universities rely on wealthy capitalists to pay leftists in the humanities). Can anyone confirm this? Let's hope at least they outsource the food service!
Posted by: Dan at Jun 10, 2008 10:20:39 AM
[O]ne of the major liabilities of outsourcing food is that the employees are viewed as a profit center -- compare cafeterias at IBM versus, let's say, Google.
My brother-in-law is a chef on the Google campus, but he works for Bon Appetit Management Company. Google pays them to provide food in the campus cafes and for special events. I don't think employees pay to eat at all.
By the way, my brother-in-law noted that they are just recently starting to care about food costs. They still are committeed to buying only food grown within 100 miles, but they have cracked down on the extravagent use of costly ingredients. I wonder if forcing employees to pay for their food would lead to an abandonment of the localvore standard, or if, like good Northern Californians, they would be willing to shell out the bucks for it.
Posted by: Christina at Jun 10, 2008 10:35:15 AM
Way to beat back the tidal wave of support for nationalizing the restaraunt industry :-)
Posted by: David J. Balan at Jun 10, 2008 10:39:21 AM
"The more pertinent question is why they have 100 employees for such a limited market; that's about four times the kitchen staff of a 5-star hotel."
Independent George, 100 workers for 100 Senators. Royalty needs attendants.
(Yes, I know the staff eats there, too, when there not at the House restaurant, but it's too juicy to let by.)
Posted by: Highgamma at Jun 10, 2008 10:55:42 AM
... and those Senate food-workers are 'Federal Employees' with very nice Civil Service retirement and health-insurance plans -- much more generous than the perks available to comparable private food-workers.
Pay & Benefits together make those jobs a gravy train.
See GAO audit:
http://www.gao.gov/new.items/d07462.pdf
Posted by: Marsom at Jun 10, 2008 11:06:23 AM
I went back to read the whole article and wouldn't you know it but the Dems plan to give taxpayers a parting gift: "Eventually, Democrats agreed to pass legislation that includes guarantees for those who go to work for Restaurant Associates. They would retain their current salaries and federal health and pension benefits. Employees who choose to leave instead would receive buyout packages of as much as $25,000 -- paid by the Senate. Half the current employees are likely to take that deal.
New employees, however, will not receive federal benefits, though they will be allowed to unionize."
The real message is that the Senate restaurants had no incentive to provide good service and they didn't.
Posted by: Rich Berger at Jun 10, 2008 11:59:01 AM
Another example of this is what used to be officer's clubs in the military. The non-appropriated funds managers tried to turn them into profit centers while maintainng the 8A contracting requirements. They are all closed now.
Posted by: superdestroyer at Jun 10, 2008 12:18:40 PM
In a story especially rich with irony, a university professor at a public institution supported by government funding clamors for a "free" (government free, that is) market.
Posted by: meter at Jun 10, 2008 12:39:30 PM
And if tenured, I might add "with his own built-in safety net" somewhere in that statement.
Posted by: meter at Jun 10, 2008 12:41:12 PM
I used to work for a managed services company that ran a lot of college and corporate dining operations. A full-time food service employee was generally paid around $20k/year (much of the staff was part time) and a dining room manager would be lucky to clear $50k. A larger operation would include a general manager and maybe an executive chef.
Obviously the senate dining room is a bit fancier than the average corporate cafeteria, but the mind boggles at how they could get an average wage of $37k. Even at a high-end restaurant the average employee isn't paid a whole lot. The people at the top are paid better and waitresses receive bigger tips, but base wages for cooks and whatnot are still well under anything needed to hit that payroll figure.
Posted by: Sean at Jun 10, 2008 1:37:39 PM
