Educate your guests on economic realities

If the economic downturn, Occupy Wall Street and the riots overseas have taught us anything, it’s that many people lack a basic understanding of core economic concepts. 
I’m not talking about the macroeconomic issues discussed in the pages of The New York Times or The Wall Street Journal. I’m talking about the basics, like government debt, business profit margins and personal credit ratings.

This shouldn’t surprise us. A 2010 study from economists at Dartmouth College, Harvard University and the University of Pennsylvania found that less than one-third of young adults had basic knowledge of financial concepts such as interest rates and inflation.

While some school systems require students to take a personal finance class, most do not. According to the Council for Economic Education, only 15 states required public high schools to offer personal finance courses in 2009, and only 13 required taking one to graduate.
This shortfall in economic literacy has contributed to individual hardship while fostering misinformation and public polarization on business issues. As restaurateurs, we have a special opportunity — you might even call it a responsibility — to help our fellow citizens better understand their economic reality. 

Restaurants offer a relaxing “third place” where families, friends and coworkers can gather and discuss current events. Why not add to that conversation by providing colorful, fact-laced coasters that increase economic knowledge? That’s the goal of a new initiative from Econ4U, an economic education nonprofit that I’m supporting.  
Econ4U is offering coasters to restaurants free of charge. Each one has a multiple-choice quiz reinforcing basic points of economic literacy. And they’ve already been tested in literally millions of consumer interfaces with great results. 

One asks, “If you charge $5,000 on a credit card and make just the minimum monthly payment, how long will it take you to pay off that purchase?” The answer, 40 years, comes with an explanation of interest rates and why it’s important to make more than the minimum payment each month.
Another coaster asks customers how much they’d have to earn to be among the top 25 percent of earners in the country. The answer — about $67,000 a year — is quite a bit lower than the seven-figure sums people have in mind when they picture the top quarter of income earners.

Surveys suggest very few people understand the realities of business profit margins. They see an $8 cheeseburger and think $4 profit. One of the coasters deals with that issue. “On average, how much profit does a full-service restaurant make from every $100 of sales?”
I suspect that customers will be shocked by the answer: $3. “While a server may make a $15 to $20 tip on a $100 charge, the restaurant itself will make an average profit of $3 after taxes. Roughly 97 percent of a restaurant’s revenue covers food and beverage costs, employee wages and benefits, rent, and other operating expenses,” the coaster reads in the longer explanation given for each answer. 

People like this kind of stuff. As test participants told us, it’s fun information they can chew on after they sit down to be served. Of course, they can ignore them, if that’s their choice. Think of the coasters like condiments on a table: They are there for you to use, but only if you want to. And if they want to see more easily digested facts, they can go to, which covers a range of business and personal economic issues. 

With our industry’s distribution channels, millions of guests can be exposed to needed information in a nonintrusive manner. The restaurant industry is well served by this initiative, customers are better educated as a result, and, best of all, it’s free for the restaurants. The cost of the coasters is covered by the foundations that have a focus on increasing the nation’s basic economics IQ. 

All you have to do is put the coasters on your bars and at your tables. What’s not to like about a public service that research suggests is welcomed by your guests and is needed more than ever? Our next big rollout will be a one-month coaster placement in April 2012, during National Financial Literacy month. Do yourself and your guests a favor — join me in becoming part of the solution. 

Dick Rivera is chief executive of Rubicon Enterprises and past chairman of the National Restaurant Association. He can be reached at [email protected] [2].

The views expressed here do not necessarily reflect those of Nation's Restaurant News.