What these Kansas business owners learned about paying $15 an hour during the pandemic

The owners of Lawrence's RPG (from left): Meghan Morsches, Nate Morsches, Matt Pool and Betsy Pool. (Submitted)

Here’s a story of some Kansans who opened a restaurant six months before the pandemic, lost the majority of their revenue and still decided to pay workers $15 an hour.

Like so many real-life pandemic survival stories, it’s more complicated than all the recent political rhetoric about workforce and wages.

In fact, the story of Lawrence’s RPG (Restaurant, Pub & Games) goes all the way back to the 1940s.

Nate Morsches, one of four co-owners, was inspired by his grandfather, Patricio Pascua, who grew up in the Philippines.

“He was about 16, around 1940, before the U.S. entered World War II,” he says. “A Japanese squadron came in and raided his fishing village, murdered his father and brother.”

Pascua fled into nearby mountains with his fiancee, Morsches’ grandmother. A few weeks later they stowed away on a boat to Hawaii. Pascua joined the Navy, fought against the Japanese in the Pacific and then enlisted in the Air Force.

“Once the war was over and his family was safe, he was dedicated to building community,” Morsches says, recalling “massive parties” with food, drinks, singing and dancing at their tiny home every Sunday evening in Hawaii.

Morsches’ parents later moved to Michigan. Fifteen years ago, he and his wife, Meghan Morsches, ended up in Kansas, where Meghan attended nursing school. They both still work full-time as nurses. But Nate Morsches always had “a side hustle.”

One of his partners in those hustles is Matt Pool, now the operations director at RPG. Before getting into the restaurant business, they’d spent a year and a half hosting pop-up events and building a large and enthusiastic following for their concept: food, cocktails and board games. When they opened on Massachusetts Street in September 2019, Meghan Morsches designed the space and built its structures. Pool’s wife, Betsy Pool, runs the library of 1,000 games.

Diners play a game at Lawrence’s RPG. (Submitted)

Of the four partners, Matt Pool is the only one who takes a salary. The restaurant’s mission, Morsches says, is to create community.

Still, workers need to get paid. At first, they paid their 25 employees “normal restaurant wages,” Morsches says.

Then came the shutdown of March 2020. Like restaurants everywhere, they started back up with carryout.

“When we opened up for curbside, we realized: no one’s tipping,” Morsches remembers.

Morsches was proud of how they’d assembled a staff that was diverse in terms of ethnicity and gender identity. They’d had to lay people off, but the ones who remained had been there from day one. They were committed and courageous. And they were making minimum wage.

“It was hard to go to sleep at night because of that,” he says. “I read a post one of my employees put out — she didn’t know I read it, but she wrote: ‘I just made a yogurt last two meals.’ I thought, OK, something’s got to change here.”

That same week, The Burger Stand, another popular Massachusetts Street restaurant, also began paying $15 an hour.

By the time lockdown ended and RPG re-opened with limited capacity last June, they were 70% below revenue. Like so many other restaurants, they had to get creative. Pool built an online system so they could rent out the board games. And they started selling food for the night-shift nurses at the hospital where Morsches was a frontline worker, treating COVID-19 patients in the ER and the ICU.

Morsches got covid in December, so sick he couldn’t get out of bed. Meghan and their four kids got it too. But Morsches says his experience in health care helped keep the restaurant staff safe: they’d written hospital-grade protocols, and only one of their employees got sick.

The government’s relief programs helped them keep paying $15 an hour. The four original partners also sold some of their equity and brought on more investors.

They also let customers know they were doing away with tips and going instead with a flat, 15% “hospitality fee.” At first that didn’t make up for the losses, but over the last couple of months, as business came back quickly, it’s made $15 an hour sustainable, Morsches says.

“It’s a livable wage,” Morsches says. “We want to take care of our people.”

But there was another reason for the raise.

“We were beginning to think about what the labor market would be like after the pandemic,” he says.

Morsches wants to be clear: They were nervous about those unemployment benefits.

“If these benefits are so great, we really needed to have a reason why people will come to work instead of not coming to work,” he says.

There’s also the restaurant industry’s reputation for low-paying jobs and toxic work environments.

“I pride myself on our culture and that we pay well,” Morsches says. “We just hired three people this week.”

Morsches says they’re back up to about 80% of pre-pandemic revenues and growing every week. And this is how the labor market’s going to be for the foreseeable future.

Now, he says, he doesn’t think it’s the unemployment benefits that are driving workforce shortages.

“It has to do with increased demand,” he says. “Labor will cost more. If you want to hire people right now, you need to pay them well.”

All of this is likely a hard sell for business owners in Kansas towns that aren’t as progressive as Lawrence, or where the talent pool is smaller. But it’s not just the responsibility of business owners.

“Customers also need to understand that there will be higher prices in order to pay people a living wage,” Morsches says. “The responsibility is on the entire community.”

After all, Morsches knows about building and sustaining community. He learned from his grandfather.