Durham Council Struggles to Define Living Wage and Incentive Priorities

Things were going pretty well during a city council meeting this month for Ian Bracken, who requested a $102,000 economic incentive grant to help open a modest sandwich shop and grocery with a rooftop garden in east Durham.

Bracken, who purchased the late 1940s red-brick building for $130,000 last May, envisions a place where the facade remains unchanged. He wants to replace the awning at the entrance to protect his patrons from the elements. In an area that’s pretty much a food desert, he wants to teach neighborhood youngsters how to grow and cook their own food.

But after a softball question from Councilmember Mark-Anthony Middleton about the business’s “signature sandwich,” the wheels appeared to fall off Bracken’s plans. It began when Mayor Pro Tem Jillian Johnson noted that the business owner didn’t intend to pay his workers a living wage.

Not good in a city where fast-food workers stage regular wildcat strikes to demand better pay, and where council members and county commissioners have voted to increase the wages of their part-time workers in recent years.

The current living wage in Durham is about $15.68.

“That’s a big priority for me,” said Johnson, noting that Bracken plans to start his workers at just $11 an hour. “That’s a big priority for everyone on the council.”

But just moments before Bracken spoke, the council unanimously endorsed $140,000 in economic incentives to demolish a long-abandoned landmark in south Durham to make room for a new Checkers, one of the nation’s largest drive-thru restaurants. Business owner Dobbin Bookman hadn’t agreed to pay the 30 people he plans to hire a specific living wage.

For his part, Bracken said he wanted to offer his sandwich shop employees “a guaranteed, hourly wage that I know I can pay,” saying that he planned to start the shop’s workers at $11 an hour.

“A lot of people get into that living wage thing by guaranteeing a specific amount of tips, and they use that tips amount to get to that livable wage,” he said, adding that tips would be dispersed equally and might add up to a living wage. “I want to get the people working for me the most money possible. I want to promote the people that work hard, and I want to do it quickly.’”

The mood in the meeting shifted after Bracken finished his response. Johnson asked a second question.

“Could you give us a sense of how much is your food going to cost?” she asked before explaining that east Durham has become a very expensive place to live, particularly along Angier Avenue and Driver Street.

“Part of that is actually a result of the kind of investment we’ve been doing as a city when we try to make communities more livable,” she said. “Unfortunately, it has the effect of gentrification and displacement. So another concern I have is that folks in these communities are able to take advantage of the businesses.”

“How are you going to make your business accessible to the folks that live in the community you’re trying to serve?” Johnson asked.

Bracken said the issue is close to his heart after growing up in a neighborhood that was gentrified. He said he really wants to accept SNAP benefits, but government regulations prohibit their use to purchase hot foods.

“We will always have a sandwich for five or six dollars on the menu,” he said. “Obviously there’s wealthier people moving into this neighborhood. And a lot of them are from metropolitan cities; Boston, New York and Philadelphia are the three major cities that people move down here from.” 

“Community building is the basis of our business,” he said. We don’t have a national brand, just a lot of passion about this project.”

Johnson still had concerns.

“The living wage piece is important to me,” she said. “When we invest public money in private enterprise we need to ensure that the jobs that are being provided are good quality jobs. And I don’t think that $11 an hour, even with the possibility of tips, meets that standard.”

Johnson suggested that Bracken get feedback from “folks in the community because y’all are new to town.”

“This sounds like a business that’s not necessarily going to serve the people who currently live in the community,” she said. “While I think it’s a good project, it doesn’t meet my threshold for public investment.”

Chris Dickey, a staffer with the city’s Office of Economic and Workplace Development—which endorsed the plan—defended Bracken.

“The reason [Bracken] couldn’t get additional support was because of COVID,” Dickey said. “COVID was here and it was very difficult to get in front of meetings with people to try and sell this particular project. As it relates to the livable wage, we did talk to him. And I respect what the council members are saying in reference to public dollars. One of the things that Ian [Bracken] said is he would aspire to a living wage. One of the things that we want to do is get his business up and going.”

“What is important is that [the] building has been sitting blighted for a long time and it does need to have some type of investment if we’re going to protect the city’s investment,” Dickey added.

Councilmember Javiera Caballero asked several questions, including a big one—what is the city’s actual living wage?

“And I apologize,” she said, “I know it’s something we should have asked in the previous public hearing we heard because while they said they’re paying a living wage, they did not give an actual dollar amount.”

Mayor Steve Schewel told the council that the city’s livable wage last year was $15.68 an hour. That’s about on par with Orange County Living Wage’s metric, which upped its calculation from $14.90 to $15.40 an hour earlier this month.

Bracken said he and his business partner “would absolutely love” to pay their workers $15 an hour, even in an industry where the pay is notoriously low.

“But we’re coming to a new area, a targeted area and we’re not sure where foot traffic is going, but we would love to get established and we need to figure out exactly what our profits will be so we can pay these people,” he added. “If we have the profits to pay people $15 an hour, that will be the first thing on my agenda.”

“This is the smallest of small businesses,” Bracken said. “I plan to be in Durham for the rest of my life. This is the starting point of my ownership restaurant career. I am so eager to get in there and teach people how to cook and serve the community.”

After a quick internet search during the meeting, Schewel said that the fast-food company pays its cashiers $9 an hour, and $11 to $12 an hour to its assistant managers. (According to job site indeed.com, cashiers at the national chain average $9.28 an hour. Cooks, sandwich makers, and dishwashers average even lower rates nationally.)

Middleton said it was a good time to review the underpinnings and philosophy of the city economic policy.

“As I see it, the whole animating proposition of economic development is to identify and prop up businesses that don’t have the capital, don’t have the clientele yet, don’t have the wherewithal to behave that way because if they did, what would they need an incentive for?” he asked. “And in this particular lane where we’re using public money to incentivize, to spur economic development in blighted areas, it seems to me one of the things we have to keep vigilant about…actually is a business that does not have the wherewithal yet to pay $18 an hour. I’m not going to be mad at a cub for not being able to roar like a lion.”

Middleton also noted the grants and loans that went to small businesses because of the pandemic, and wondered if those employers would have been able to pay their workers without that assistance.

Caballero later said she would also vote to give the sandwich shop incentive funding because many immigrant-owned restaurants in the city – that are not eligible for public money – would have to shut down if they had to pay a living wage.

Office of Economic and Workplace Development Director Andre Pettigrew said the city is committed to a living wage program.

“But there is no red line that prevents us from investing—particularly in small businesses, independent businesses—around the living wage,” he said. “We have an interest in promoting and supporting local, minority- and women-owned businesses, and in many instances, they are not paying a living wage not because they don’t want to, but the business model has to scale to be able to generate profits to do that.”

Schewel spoke before the vote.

“You know, we’ve got ourselves in a complicated box here tonight,” he said. “I was extremely supportive of our last item. I believe that support of Black legacy business on Fayetteville Street in that location is very important. And that we really want to support Black business ownership, the creation of Black wealth; those are super important goals of ours.”

But realistically speaking, the mayor added, Checkers will not be paying most of its employees $15.68 an hour.

“I’m not saying no employees will be getting that,” Schewel said. “We should have asked that question more directly. We used the euphemism ‘living wage,’ but go check it out in the next 10 seconds what Checkers pays.” 

“I’m not critical of the fact that we approved that,” he added. “I think it was the right thing to do.”

“It’s hard to for me to say I’m not going to support [Ideal Sandwich] because of the wages, and I just supported the last deal,” the mayor added.

Schewel’s vote ended up being the decider. Council ultimately approved Ideal Sandwich Shop’s incentive request by a slim 4-3 margin, with Johnson and Councilmembers DeDreana Freeman and Charlie Reece voting no. In contrast, the Checkers vote went down 7-0.

Follow Durham Staff Writer Thomasi McDonald on Twitter or send an email to tmcdonald@indyweek.com.

Support independent local journalism. Join the INDY Press Club to help us keep fearless watchdog reporting and essential arts and culture coverage viable in the Triangle.