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What Hundred-Dollar Price Hikes at Per Se and Momofuku Ko Mean for the Future of Dining

Eater's critic looks at how restaurants are raising their prices and what that means for guests

When David Chang's two Michelin-starred Momofuku Ko relocated from a cramped East Village space to a roomier den just off the Bowery, diners expected higher prices, and with good reason. The stools were more comfortable. The restaurant was decorated with bespoke graffiti. The stemware – light-as-meringue Zalto glasses – showed off beverage pairings with panache. The menu was longer than before — around 18-courses or so. And the ingredients were more luxurious too, with osetra caviar and house-aged meats making appearances. Accordingly, dinner went up by $50 to $175. It was the type of price hike that made sense. The restaurant wanted to make a change. It made the change. And the consumer understood, without any explanation, why she'd be paying more.

I recount this story because the price hikes New Yorkers are currently witnessing are not as simple. These hikes are visible, for the most part, not in the dishes we eat, not in the dining rooms in which we sit, but rather on the printed menus whose items have suddenly become more expensive. These hikes aren't necessarily benefiting the guest. Instead, they're benefiting the people working at the restaurants.

The price of dinner is going up because the price of labor is going up, possibly more than any time in our generation. New York's various minimum wages shot up at the beginning of the year, and it's possible they'll shoot up even further if the state abolishes the tip credit and ensures that everyone in the city earns at least $15 per hour by 2018 — waiters included. This is something to rally around if you believe, like I do, that every hardworking individual should earn at least the local living wage of $14.30.

We are, in brief, paying more for the same things as before because we weren't paying enough in the first place. That's a slightly tougher sell than "more caviar."

[Per Se by Daniel Krieger]

And while this new pricing reality is absolutely fair to hardworking servers and cooks, it might not sound fair to guests, particularly if they don't feel that increased costs result in increased value. Take, for example, how you might feel after spending $325 for a meal at Per Se. In 2005, dinner at the restaurant cost $210, and diners got a lot more for their money — the dishes served then and now might look virtually identical, but — as outlined in critical takedowns by this reporter last year and, more recently, by Pete Wells of the New York Times — the quality of the cooking and the service has radically, problematically declined. Admittedly, a price hike in the 50 percent range (a faster rate than overall inflation), isn't uncommon even at mid-range restaurants over the course of the past decade. But the restaurant needs to have something to show for it. Better food, better service, better labor practices.

Fair labor practices, of course, show every sign of becoming the next "organic" — something diners will one day pay a premium for because they'll derive more gratification from knowing that their slightly more expensive meal results in slightly better compensation on the part of those who prepared it. Rightly so.

Until that day, higher prices will probably annoy diners, not just at Per Se, but even at the city's worthwhile restaurants. That doesn't mean guests will revolt. Restaurants have been steadily pushing up prices since the end of the Great Recession – sometimes dramatically, often to accommodate rising food costs – and dining rooms feel as full as ever.

[The Breslin lamb burger by Krieger.]

And here it's worth noting that the 50 percent rise in New York's tipped minimum won't translate to a 50 percent price for hike for consumers. Most restaurants are only inching things up prices by five to ten percent in the short term. The fact that Minetta Tavern's New York strip went up by $3 to $65, alas, won't make it any easier to get an 8 p.m. reservation at the heralded steakhouse. And the fact that the Breslin's lamb burger is now $25, up from last year's $22, likely won't thin out the weeknight crowds.

But here's the thing. The fact that Minetta's strip is nearly double the 2009 opening price of $37 might make one wonder if maybe things are getting a touch ridiculous, even in our era of sky high beef prices. The Breslin's $25 lamb burger, in turn, is up $8 dollars from 2009, while Bar Boulud's $31 charcuterie platter is up nine bucks from 2008. These aren't tiny increases. Even if you can afford the extra $3 today or $5 tomorrow (and let's be honest you probably can), at one point you're going to ask yourself what the marginal rate of return is on all these hikes. You're going to want to know how much happier this lamb burger is making you if it tastes the same as it did six years ago and is 47 percent more expensive, now that it costs $32 after tax and tip. Yes, I'm still buying at these prices, because I love these restaurants. But for everyone, there comes a point where too much is too much.

Price hikes are about us, our relationship with the things we buy, and the way those purchases make us feel.

There's often talk about diners being "priced out" when a dry-aged burger or a pork bun goes up in price, and in the most statistical sense of things, that happens when something suddenly costs more than what someone makes. But in the larger sense, price hikes aren't any more about personal finance than the Mast Brothers controversy is about chocolate. Price hikes are about us, our relationship with the things we buy, and the way those purchases make us feel. And if they don't make us feel good, we won't buy them anymore, regardless of whether we can afford them or not. Or put differently: While an underpaid cook might have less income flexibility than a young banker, I can guarantee you that neither enjoys the universally awful feeling of being ripped off, a difficult sensation to shake if you're paying even just a few dollars more for a pizza in an uncomfortable restaurant with mediocre service.

That's another way of saying mid-range dining might be in just as much trouble as fine dining – and possibly even more so, given the lower degree of income flexibility among guests at cheaper, a la carte venues.

Maybe you were okay with that cramped establishment before, because that was the prevailing bargain of our budget gourmet era: You paid a few dollars less for a tweezer-plated dish that used to be exclusively tweezed in a set menu Midtown joint. And that's why you forgave the backless stools and lack of soundproofing. But now you're a hint less forgiving, because even though prices are going up everywhere, and even though you're earning more than than you were four years ago, you don't want to spend $5 more on that lamb brain and goat eyeball terrine if you're still sitting on that same hard wooden stool, drinking a $14 riesling out of a water tumbler.

What restaurants need to realize is that higher prices act like a magnifying glass.

What restaurants need to realize is that higher prices act like a magnifying glass. Flaws and inconveniences are amplified. If something goes wrong at your sushi omakase, you'll naturally be more critical if that happens at the $300 per person Kurumazushi than at the $135 Shuko. This reality will likely frustrate owners and operators at ambitious mid-range venues. They kept customers happy with stripped down environs and affordable delicacies, and now they have to raise prices because the government decided, correctly, that their workers weren't being paid enough. And this reality will also frustrate already cushy venues like Per Se, which have a heck of a time justifying their higher prices (yet static cuisine) to diners.

The empowering news, however, is that while a restaurant operating on razor thin margins can't do much other than raise prices in the face of rising labor costs, that establishment can do a lot to dampen some of the ignominies of modern dining. Even the most open-minded guest, the type who's fully on board with cooks and waiters earning a $15 minimum, will be decidedly more amenable to a price hike if the restaurant in question becomes a more enjoyable and accessible place to inhabit. I could list about 1,000 difference grievances – I won't, since many of my colleagues already did – but I will mention a few things that I think can take off the sting of price hikes.

First: Guests don't like pricing surprises. So when certain online menus don't even include prices (cc: Sadelle's, Santina, Dirty French), budgeting things out becomes slightly more aggravating, especially when you get to the restaurant and realize the cheapest formal black caviar service is over $300.

Second: Restaurants need to be more transparent about portion sizes, more upfront about sharing and splitting. Minetta's $65 strip (a steak that's admittedly bigger than it was at $37) would seem less daunting if it were listed "for two," a designation would make that dish seem less like a rip-off, and more like the value that it sort of is. And perhaps the full breadth of a restaurant's wine program would seem more within reach if sommeliers were more inviting about the possibility of half pours and negotiated pairings.

Third: Even if it means raising prices even further, restaurants should consider the case of Ko and Mission Chinese, both of which became much more enjoyable places to dine after they relocated to larger, more comfortable digs.

Ultimately, many of these minimum wage-related hikes will make New York a better place for eating out. Happier, better paid hospitality industry staffers will make for happier guests. But if restaurants want us to cough up a bit more for dinner, some of them are going to need to try a bit harder. Like Per Se, Ko costs over $100 more than it once did; the nightly tasting rose to $195 in the new year. But diners will realize they're eating at a much better restaurant than before. And that makes a big difference.

[Top photo: Momofuku Ko by Krieger]


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