O'Kean Suggests €15 Beer to Support Hospitality Industry

O'Kean suggests beer at €15 to support the hospitality industry

How much would a draft beer need to cost for the waiter serving it to earn a decent salary and not work, as summarized in the opening message of the thread, 50 hours for 800 euros a month? Economist José María O'Kean comes up with an uncomfortable figure: up to €15. This is noted in the same message, citing La Razón, and the number has acted as a trigger: rarely has a bar price served to diagnose an entire sector.

His diagnosis is summarized in three ways. First, pay more and improve hours and training, with the consequent increase in the price of beer. Second, self-service to cut staff. Third, robot waiters to reduce costs without completely eliminating personnel. None are comfortable. The prevailing interpretation in the thread is that if the sector is cheap, it is because labor is cheap.

Why €15 doesn't add up with the bar's takings

There is a puzzling piece of data: one participant points out that a draft beer is still served for €2.50 in the neighborhood bar. Multiplying the price of a daily consumer product by six is not an increase, it's a category change. And people's wallets are already signaling their concern. The set menu, a classic indicator, has gone from €9 to €14-16 in a few years according to another participant, with a corresponding shift towards packed lunches and aluminum foil containers.

This is where price elasticity of demand comes into play. When the price rises, the quantity purchased falls, but it falls differently depending on the product. Bread is still bought almost the same even if its price doubles. Bar beer, however, does not: one can simply stay home, buy cans at the supermarket, or bring out a bottle and a lunchbox, as several participants recount.

Approximate translation: as several participants point out, at €15 per draft beer, the establishment would not sell proportionally less, it would sell considerably less. And, according to that reasoning, the extra margin per unit would not compensate for the drop in volume. The calculation supporting the proposal only works if the customer accepts paying six times more for the same thing.

Are robot waiters cheaper than an employee?

The third option runs into the bill. A robot doesn't get a salary or pay social security contributions, but it has to be bought, maintained, updated, and given physical space in the dining area. As a participant recalls, Valencia already had robot waiters in 2019, and they didn't last long. The recurring diagnosis is that they are only cost-effective for transport tasks: bringing dirty dishes to the kitchen and saving the staff trips. Not for taking orders, dealing with an angry customer, or improvising when a tray is dropped.

Self-service and the return of the packed lunch

The second solution, where the customer serves themselves, is already being applied by the market without needing permission. Cans bought at the supermarket, soft drinks brought from home, key-chain sized bottles, and packed lunches. The phenomenon has a name in slang: lonchafinismo (a portmanteau of 'lunch' and 'frugality'). Its logic is simple: if the extra cost buys nothing, the intermediary is eliminated.

Self-service does not make the product cheaper; it reduces the number of people handling it. And that reduction, in a labor-intensive sector, is seen by some as a labor adjustment rather than innovation.

What margin does a bar really leave?

Here the discussion becomes more interesting than the headline. Some argue that staff is usually the largest operating expense for a business, but not the only one: rent, electricity, and taxes also weigh on the list of bills. As a reference for meager margins, Mercadona was cited, with a net profit of around 3% on millions in revenue. Another common argument is that Spanish companies, with low added value, have little room to reduce profit without entering into losses.

With this structure, simply raising the final price is the easiest explanation and the hardest outcome to sustain. Some argue that the way forward is to lower taxes and the cost of electricity; others respond that this recipe does not fix the underlying problem, it only hides it.

The effect on employment and wages in the sector

A participant recalls a time when a waiter could support a family and retire with his apron on, without stratospheric bar prices. The classic comparison he makes is with agriculture: daily wages of about 60 euros in the nineties compared to 40 today, with a kilo of oranges going from 60 cents to 3 euros.

In this context, part of the conversation shifted towards the role of foreign labor in the sector. It is argued that the continuous arrival of workers willing to accept long hours and low wages has acted as a wage buffer; another interpretation holds that the problem is the business structure, not who fills the positions. Both interpretations agree on one point: sector wages have not kept pace with the cost of living.

And so we come back to the starting point. Several participants agree that cheap beer subsidized by the waiter is not a business model, but a convenient way of not paying for labor. The question is whether, at €15 per draft beer, anyone will raise their hand to order a second round.