Faces of minimum wage: Restaurant owner weighs pay, fairness

Editor’s note: Minimum wage workers protest nationwide, pleading for hikes at federal, state and local levels. Businesses fear potential harm from such a mandate, predicting layoffs and higher prices. In Chicago, some aldermen sought a $15 minimum; a city panel held hearings and proposed $13 by 2018, a plan Mayor Rahm Emanuel has embraced. In Illinois, the debate goes to voters on the Nov. 4 ballot with a nonbinding referendum seeking support for a hike to $10 from $8.25 per hour. As the issue comes to a head, the Chicago Sun-Times talks to area low-wage workers and small business owners. In a series of stories in coming months, we bring you their stories. We invite you to follow our Faces of Minimum Wage series for more in-depth coverage in words, photos and video.

Josh Rutherford got a $6.25 an hour job washing dishes at Chili’s restaurant his first year at Purdue University. When he graduated four years later, he was making $9.25 an hour running its kitchen.

A farmer’s boy from Montmorenci, Indiana, about 120 miles southeast of Chicago, Rutherford had coupled that job with a second one at Frozen Custard. “When I walked in there, I’m like, ‘I used to lifeguard. I taught swim lessons.’ They’re like, ‘We need a dishwasher.’ I’m like, ‘Done. Sold,’ ” the 38-year-old Chicago restaurateur recalls, laughing.

“But I’ve never been someone to just kind of be OK with that job, so I started to go over to where the [food] line was, and try and learn what the other jobs were. … I wanted to make more money,” he said.

Studying hospitality management, he did a college internship with the Houston’s restaurant chain, which snatched him up when he graduated.

By age 25, he became the youngest person Houston’s had ever promoted to general manager, overseeing a $6 million operation.

Rutherford traveled across the country, managing and opening restaurants for the chain for 10 years, before leaving to form Chicago’s Four Star Restaurant Group with two other colleagues from Houston’s.

“We decided we were tired of making money for someone else. We wanted to go and try it on our own,” he says.

In Chicago and nationally, the restaurant and retail industries in particular maintain they’ll be most harmed by a minimum wage hike. They remain the nation’s primary job market entry points for the unskilled.

At Rutherford’s restaurants, entry-level jobs like dishwashers and prep cooks earn a minimum wage of $9 to $9.50 an hour. Line cooks make $10 to $11 an hour; grill cooks, $14 to $15 an hour; and low-level managers $13 to $17 an hour.

In Illinois, minimum wage is $8.25 hourly, more than the federal minimum wage of $7.25.

“Our average is already over the current minimum wage,” Rutherford said. “If you take the minimum wage and bring it to, say $15, anybody that makes $15 an hour that works here is going to turn around and say, ‘Wait a minute. They’re making the same amount I am? I’m working twice as hard. I’m twice as smart and five times as good.’ So now they’re going to say, ‘Give me what you just gave them.’ ”

Sitting at a table surveying a slow lunch crowd at Smoke Daddy’s barbecue in Wicker Park, he shook his head.

“You don’t make enough money on the dollar to be able to support a 100 percent wage increase for everyone,” he says.

Four Star broke into Chicago’s restaurant scene in 2003, opening Dunlays on Clark, in Lincoln Park.

A decade later, Rutherford and three partners are at their seventh restaurant, employing 350 at their six North Side eateries and one restaurant in Lombard.

Their portfolio includes Dunlays on the Square in Logan Square, D.O.C. Wine Bar in Lincoln Park and Lombard, Frasca Pizzeria and Wine Bar and Crosby’s Kitchen, both in Lakeview.

Asking Rutherford to pick a favorite is like asking a parent to pick one child over another, he says. But this barbecue joint he’s monitoring on a recent day, recently expanded to add seating, brings a gleam to his eye.

“When we had four restaurants, we each took one to oversee because we weren’t making enough money to pay a general manager. Smoke Daddy was mine,” he says. “Growing up on a farm — with 200 head of cattle — we smoked meat all the time. A lot of the recipes are mine, things I’ve incorporated. It’s been great to see it grow.”

The restaurants that draw his pride now have a competitor.

Rutherford is the smitten new dad of a 2-month-old son, Conrad, and he and fiancee Liz will wed in November.

But Rutherford still wakes at 6 a.m., runs three miles with his German shorthaired pointer, reviews Four Star’s manager on duty logs from the night before and then heads out to the restaurants, typically not returning home until 8 p.m.

“You don’t wake up one day, like a lot of people think, and say, ‘Oh, I wanna own a restaurant,’ ” he said.

“My whole life from 17 has been focused on restaurants, trying to develop a plan of how to make this happen. It was 80-90 hours a week, zero free time. We paid ourselves very little the first two or three years because we weren’t making any money. I lived with a roommate in not a very nice part of town. There were sacrifices in order to get these restaurants up and going, generating revenue, and successful,” he says passionately.

Of every dollar Four Star makes, 10 to 15 percent goes toward rent; 30 to 35 percent covers food costs; 40 to 45 percent is labor, says Rutherford, eyeing Smoke Daddy servers and food even when seemingly engrossed.

“There are times where it’s slow, and within 15 minutes, you can be completely full, a full rack of tickets, just going hard and trying to get the food out right and perfect. That makes it very fun,” he said.

“But if you’re not in control of what’s going on, and you don’t have the right idea of how to account for everything, how to watch product being made, how to make sure labor is good, it’s definitely stressful.”

Profit margins are low in this industry, says Rutherford, who still considers himself a small businessman.

“At the end of the day, it’s 5 to 10 cents on the dollar you’re going to make, and that’s without, oh, your grill hood goes down, and that costs you $5,000, so now you’re not making any money this month,” he said.

Yet, Rutherford wouldn’t trade the industry for any other.

“I love the restaurant business. It’s one of those things,” he says with a grin. “I’ve been addicted to it ever since I started and just wanted to continue to grow and grow and grow.”

And growth is in the works. Four Star has plans to open two more restaurants next year.

Rutherford said the company could weather the $10 minimum wage proposal being put before Illinois voters on Nov. 4, but a higher base pay of $13 to $15 per hour will mean reducing staff, raising menu prices.

“When I look at the potential ramifications, it almost makes me want to cry,” he said.

“This is a difficult issue for us. If somebody walks in here, and they’re like, ‘I’ve been smoking barbecue in the best barbecue restaurant in Kansas City my whole life,’ I’ll give them maximum wage, make sure they want to work here, that they feel good about it,” he said.

“If a 16-year-old, let’s say, walks in and says ‘Josh, I really think that I want to be in the restaurant business. I wanna learn it,’ having to pay them $15 an hour just seems absurd. They need to start at the bottom, work their way up, prove their worth, show what they can do. That’s how I did it. That’s how I feel it should be done.”