“Roxbury’s Dudley Dough, a fair-wage pizza shop, to close its doors” (Boston Globe):
they’re losing a community resource in the heart of Dudley Square and a singular business based on a premise of economic justice and healthy food.
Launched in 2015, the popular fair-wage pizza shop will close at the end of the year, according to Bing Broderick, executive director for the nonprofit Haley House, which oversees the shop. While popular, the shop is not breaking even financially, which has put stress on the wider nonprofit organization.
Pitched as “pizza with purpose,” the restaurant offered above-average pay as well as culinary and leadership training.
Last year, Robert Kraft, owner of the New England Patriots, donated $100,000 to Haley House, specifically for Dudley Dough.
If this failure demonstrates that “economic justice” is not profitable (or break-even), can we infer that “economic injustice” is profitable?
Cannot the same be said to may (all?) other government subsidized programs?
Does this failure demonstrate that “economic justice” is not profitable or is it just that this particular store was not profitable (like many others not based on an “economic justice” model which were started in 2015 and have since closed)?
Small businesses fail all the time – isn’t the statistic, something like, 50% fail within their first 5 years?
You’d have to examine location, their hours, their target market, demographics of the area, etc. in order to understand why they failed.
Neither pizza (items cost less than $1.50 for a $10 pizza) nor more-expensive labor (what is the labor input per pizza? 5 minutes?) explain the failure.
Restaurants are dropping left & right because of the “Amazon effect”, don’tcha know. People aren’t out of money. They’re just ordering their trillions of dollars of pizza on amazon.com. Buy real estate.
Insufficient evidence to be sure, but if a pizza shop closes, my default assumption is that’s because the pizza wasn’t good enough for the price. If I then learn that their priorities are “economic justice” and “healthy food” I’m going to double down on my assumptions that the price and taste, respectively, are off.
A small casual restaurant just closed of their two stores in the SF Bay Area. They have six other locations. The owner says they were paying $20k per month in rent, for each location.
You’ve got to sell a lot of organic soup/sandwiches and $4 toast to cover that nut, after food and labor expenses.
I think high rent may be a factor in the failure rate of restaurants in general. https://theplantcafe.com/menu
(Link behind a paywall) https://www.bizjournals.com/sanfrancisco/news/2017/10/19/plant-cafe-san-francisco-restaurants-fast-casual.html
It takes crust to call any pizza healthy, because the crust makes it unhealthy.
G C: Maybe you’re on to something. As U.S. real estate continues to climb in cost and the population continues to expand it would make sense to have fewer restaurants, each serving more people. Certainly one McDonald’s can probably feed as many people as 30 artisanal pizza places. Though, of course, McDonald’s has been accused of paying “unfair” wages, thus circling back to the original post’s point…
philg: You have ended up “circling back to the original post’s point” without addressing the central criticism of that original post which has been made in this thread. To recap that criticism: The evidence presented for the premise that ‘“economic justice” is not profitable’ is a single data point cherry picked from the thousands of restaurant failures which occurred in 2015. Therefore, the argument made in the posting begs the question ‘“economic justice” is not profitable’.
I learned long ago that “fair” is just a euphemism for “substituting my judgment for a market price”. The problem is that your judgment is not anchored by reality.
Pizza is certainly plentiful and so the profits of pizza shops are (after paying for rent, capital, the imputed wages of the shop owners, etc.) bid down to essentially zero while paying the employees a market wage and charging a market price for pizza.
If I open a “fair” pizza shop that pays the employees more than a market wage, I can either charge a “fair” (above market) price for my pizza (in which case no one will buy it except for my fellow ideologues (and even they probably won’t put their money where their mouth is) or charge a market price but pay above market wages, in which case my shop will lose money.
All this is simple economics and the only people who could not understand this are idiots who think that capitalist pizza shop owners are just drowning in extra money and are just too greedy to share it with their workers.
Jackie: We don’t live in an Econ 101 textbook, we live in the real world. In the real world, businesses can be profitable using a variety of labor cost and pricing strategies (e.g. Costco & Walmart). The “market price” for “pizza” in my area varies by like 1000%. In the real world a typical successful restaurant operates on a profit margin of 3% – 5% which is low but a lot higher than “essentially zero”. With labor costs typically of 25% of sales, those profit margins alone give an owner (of a successful restaurant) who doesn’t care about making a profit room to pay up to 20% higher wages. I am not making any claim about whether or not “economic justice” is profitable or not. I am claiming that nothing in the posting or subsequent discussion thread (including this comment) provides much of anything to answer that question one way or the other.
Also, even if “economic justice” IS NOT profitable, we cannot infer that “economic injustice” (whatever that means) IS profitable. Claiming it is so is a classic non-sequitur.
#11, so if your efficeint piza shop that is making 5% profit ersases its profit then employees are paid $9.00/hour instead of $7.5o/hour assuming owners do not want raise for their part of labor. $9.00 is still grossly unfiar when average customer is making $25/hour (based on salary and income stats that I read)!!!
The alternative theory I get from the comments:
Customers may not like the taste of healthy fair wage economically just pizzas. So don’t make them.
What the article says:
“The challenge for Dudley Dough was to support itself, Broderick said.”
Anonymous: The analysis you are trying to do is complicated by the fact that a substantial fraction of employee income in this industry comes from tips (which are not directly under the employer’s control), but according to BLS the median wage in the restaurant industry is more like $13 per hour. Some jobs (e.g. host) earn significantly less than that, but other jobs (e.g. cooks) earn significantly more.
#15. so what is the problem if pizza parlor maket wage is already fair? Was Dudley Dough paying wage fair in sense that it allowed pizza workers rent or buy decent house not far from Dudly square?
#16: I have not yet expressed an opinion in this thread on whether or not anyone’s wages anywhere are “already fair” or “unfair”. I don’t know the answer and I don’t really care.