Berman: Hip diner serves up fair wages and shared tips

Laura Berman
The Detroit News

At Rose's Fine Food on a Monday morning, the cook is at the grill, potatoes sizzling, as eaters converge: Guy in tweed suit, reading the New York Times. Elderly man in coveralls, digging into eggs and grits. A pair of Detroit cops hunker down.

In four short months, Rose's formula — cozy, welcoming vibe mixed with expertly prepared comfort food on Jefferson Avenue — has been almost absurdly well-received. Co-owners and best friends Lucy Carnaghi and Molly Mitchell have a knack for attracting good will, including $20,000 from a Kickstarter online campaign to open.

When a few Grosse Pointe women couldn't find the diner on their first pass, they kicked in $1,500 for the tall sign now hanging outside. An Ann Arbor man, who heard their range didn't work, mailed them a $2,000 check.

Rose’s Fine Food co-owner Lucy Carnaghi says restaurants are more stable when their staffs have incomes they can count on. That’s why the diner pays its workers $10 an hour, well above the state minimum wage for restaurant workers.

The diner is pure new Detroit, a try-this spirit best exemplified by the wage scale at Rose's. Instead of paying $3.10 an hour — the sub-minimum wage rate Michigan law allows restaurant owners to pay tipped workers — the partners opted for something closer to a living wage: $10 an hour.

Wait staff generally are underpaid by restaurants — we all know this — and expecting customers to remedy the problem by tipping creates uncertainty and fear. "You never know how you're going to pay for anything," says Carnaghi, who worked as a server and bartender for years.

After experimenting with no tipping, or donating tips to charity, the partners settled on allowing tips, pooling them, and then sharing tips with everyone in the house, based on hours worked.

A Facebook poll proved that diners wanted to leave tips, and preferred higher-priced food than a no-tipping policy. A percentage of the tips goes to charity.

"It's awesome because it brings the wage up to $13 an hour," says Carnaghi, who grew up in Grand Rapids and now lives in Detroit. Rose's offers a 10 percent discount to diners who live in the neighborhood and hires locally, too.

That $10 to $13 rate is well above average. Carnaghi says it's also a way to help employees manage their finances, creating a stable income flow "rather than the feast or famine that restaurant workers often face."

The partners say they were influenced by the owners at Zingerman's in Ann Arbor, advocates for higher worker pay. Even the low wages at restaurants have lagged minimum wage, because a requirement that restaurants pay workers 50 percent of minimum wage was dropped in the mid-1990s.

"We're in the throes of a new Detroit," says Phil Jones, the chef who opened the downtown restaurant Colors, which also pays above minimum wage. "It's a good time to change the model of how people get paid."

Owner Molly Mitchell remembers, vividly, being paid $6 an hour not long ago to cook in a Michigan Avenue diner. She lasted a week.

Tips for the wait staff at Rose’s Fine Foods is pooled and apportioned to everyone, with some going to charity. It’s a system co-owners Molly Mitchell and Lucy Carnaghi came up with to find balance.

Higher wages, the argument goes, create a snowball effect: Workers spend money, because they have some. Owners pay less in training costs because their staffs are more stable. "I really think we have a sustainable model," says Mitchell.

These two women are innovating, not with technology, but with a dose of humanity on a ragged Jefferson Avenue strip. The payoff for the owners? "We all bowl together every Sunday," says Carnaghi. "Dishwashers, cooks, us, everybody. I think that says something. "

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