How You Can Build a Food Empire By Fighting the Establishment
Paying high wages, giving employees a voice, and now creating a "sanctuary" for immigrant workers has helped build Zingerman's into a $65 million business.
Sanctuary Restaurants is a nationwide initiative offering resources to restaurants, enabling them to support diners and restaurant employees who find themselves targeted or impacted by harassment, bigotry, or xenophobia. Over the following months we'll be talking to owners and chefs of Sanctuary Restaurants about why they joined the organization and what they hope to accomplish. In this installment, Paul Saginaw—Co-owner and founding partner of Zingerman's Deli and Zingerman's Community of Businesses in Ann Arbor, Michigan—tells us how he built a successful business by going against the grain and giving employees fair pay and a voice, and how failing to protect the rights of immigrant workers will be detrimental to the restaurant industry.
We started out with my partner Ari and I, and two employees 35 years ago. We now have over 700 employees across 10 businesses. There are 21 partners, and about $65 million in sales, and we stayed local doing that also, so you can do all those things and you can be profitable.
We never bought into traditional conservative economic theory ala Milton Friedman that the business of business is just business. We're no longer a little nation of merchants and farmers, and corporations have an enormous impact—sometimes really good and sometimes really bad—but an enormous impact on the communities in which they do their business.
Giving back to the community is not something that you do after you become successful, but it's a cost of doing business just like paying your utilities, and paying your rent, and paying the people that work for you. It was important for us from the beginning that we would be a good corporate citizen. From the beginning we paid a wage that was above market and we provided a benefits package that was certainly unheard of in the industry, and we wanted an organization where that is not just to meet the needs of the shareholders but to meet the needs of everybody that works there.
If this administration is going to follow through on the promises they were making during their campaigning, they would pretty much devastate the food industry and the restaurant industry.
In every organization there is a hierarchy of authority, but there's no hierarchy of needs. We all have needs. We need a place to sleep, we need nutritious food, we need healthcare—all of that. We wanted to invite everybody to come in and help run the business, help make the decisions that run the business. We wanted everybody to believe that they were personally responsible for the success of the business, and we wanted to share. We wanted to share the stress and we wanted to share the winnings.
That's really what has driven us. We wanted to provide opportunity of professional and financial growth, and we wanted to provide the opportunity for ownership in the brand. So there are two founding partners, but there are 15 operating partners, who all started as front-line employees and are now all partners in the organization. There's also three front-line staff who, through a system of nominations and elections, sit on the partners group and have the full decision-making authority of partners.
That's sort of the background to [us joining] the Sanctuary Restaurant movement. I first became aware of ROC [Restaurant Opportunities Center, which was a founding partner of Sanctuary Restaurants] soon after they started, and I began working with them. They were a group that was going to advocate for food service workers' rights, and make sure that employers were at least behaving according to the law.
We're going to let the public know that we're an organization where everybody—including immigrants, including LGBTQ and including very conservative people—has a seat at the table.
Things developed from there, and then they started RAISE (Restaurants Advancing Industry Standards in Employment) as an alternative to the National Restaurant Association—which is very very regressive, very very conservative—and fight against any kind of regressive labor practices, and environmental checks. It's a very big lobby, and it's a very powerful lobby, and we wanted our own association. We said, "There's employers that just don't feel this way," and we thought the public should start to know about that, and make a decision on where they spend their money based on that.
To be clear the Sanctuary Restaurants, [launced by ROC and Presente.org] is not the same as sanctuary cities that are going to harbor undocumented workers. At least to my knowledge, our workers are all documented; they all fill out I-9 forms, but they're scared, they're intimidated, they're frightened, and we wanted to make sure that's not going to happen in our company. We're going to let the public know that we're an organization where everybody—including immigrants, including LGBTQ and including very conservative people—has a seat at the table.
We can get our voices out there and lobby and say, "Let's have a clear path to citizenship for these folks," because our industry heavily relies on them, and if this administration is going to follow through on the promises they were making during their campaigning, they would pretty much devastate the food industry and the restaurant industry. I don't know what percentage of workers were not native born, but I know it's pretty significant.
If they start to make it very, very hard for people to come to this country, if they start to intimidate people, if they start to go after their families, then folks cannot focus as well on the work that they're doing. If they start to think that they don't have a future here, then it will hurt our industry. It will make it very hard for us to hire as many good people as we need.
We have folks that had a hard time getting to work after the election. They're worried—and they're worried for good reason. There's been incidents in our public schools, and on the school buses, and the bus stop, and there's been harassment. We just want to say "Stop this shit. This isn't right. This isn't who we are." We want to be vocal about the fact that we're not going to participate in it.
A lot of it is symbolic, and ROC and RAISE want to do everything we can to lobby and say [to the Trump administration], "Well, you want to provide good jobs? Well that's what we're doing, and we don't want to lose those. Why don't you come up with a decent, clear path to citizenship?" That's what we need, and i'm sure the agricultural industry needs it also. They would be in even bigger trouble.
I feel that as a higher-profile employer in the industry that we have a responsibility to speak out and be clear about where we stand, and hopefully influence other employers that you can treat people decently—that you can pay good wages, and you can still be profitable, and you can stay in business. We've been doing this for 35 years, behaving this way for 35 years, and we've been profitable over 35 years, and we continue to grow.
*As told to Brad Cohen