Oi, old mate, a cafe isn’t a rent-free office. Why don’t you Zoom off?

Old mate in the cafe was doing it tough. At 8.30am, he sat at a corner table chairing a meeting. One of his colleagues was complaining to the staff member who brought him his iced coffee. “Seven-fifty?! Same coffee, no froth, just frozen water, and it’s that much?” The staff member retreated. The meeting continued, rent-free.

At 11am, when I dropped in again, the chairman of the meeting was still there, alone now and hammering at his laptop. Drinking tap water. Still rent-free.

Illustration: Simon LetchCredit:

When I came again for lunch, he was showing his dexterity by working on his laptop and holding a Zoom meeting. The staff asked if he wanted anything. No, can’t they see how busy he is?

A dine-in flat white has, in the past five years, climbed from about $3 to $4.50. Most customers think that’s way too expensive. I must run against the grain; I think that in some circumstances it’s way too cheap.

Cafes are, for their owners, a labour of complicated love. Wait staff, if aged 20 or over, are employed on the lowest minimum wage of $22.61 an hour, a good barista at least double that. Since inflation began rising in 2020, the real wages of hospitality workers have fallen.

The Fair Work Commission will soon hear the ACTU claim a 5 per cent increase in the minimum wage, which should bring those workers almost back in line with what they have lost. Industry groups will oppose it. The chair of the Reserve Bank, Michele Bullock, has said that even greater increases, for aged care workers for example, will have a negligible effect on inflation. Cafe wages ought to rise, while inflation comes down. Coffee “to have here” will remain too cheap. (Little wonder so many cafes employ teenagers and family members. It’s the only way to stay in business.)

Every cafe, like every business, is different. But some factors are common to all. Global coffee bean commodity prices have doubled since the beginning of the COVID pandemic. Most of our coffee is imported from low-wage countries. After several years in the growing it needs to be freighted to Australia. My local barista, who brings in his coffee from Colombia, told me, “I did some market research. I told my customers how much is involved, in growing and logistics, in getting their coffee here from South America. After I tell them this, they say they would pay 50 cents more per cup.”

And he’d only told them about the miserable wages in South America, not the work conditions.

“But you didn’t raise the price?”

“No,” he said. “They won’t actually pay that.”

For those ordering cappuccino, or, even worse, hot chocolate, cocoa prices have quadrupled in the past year due to agriculture failures in Africa. It would be cheaper to order a sprinkle of gold dust.

Whatever the reason for rising commodity prices makes no difference to the cafes; their costs rise, and if their prices rise, too, they face a coup d’etat from their customers.

Then there are rents, insurance, equipment and other fixed costs. In a Sydney suburb near me, a new cafe is paying $5000 a week in rent. At $1000 per 7am-to-1pm shift, they need to be selling 300 coffees a day to make it worth their while. That’s nearly one a minute. They don’t often make money on food, which requires more infrastructure such as cooking, storing, plates and so on. It’s all down to their coffee price.

So back to old mate. According to my barista, a cafe budgets for dine-in customers to spend an average of $10 for a 15- to 20-minute stay. A table, then, is worth $30 to $40 per hour in income. Old mate on his laptop, holding his meetings, spending almost nothing, ends up being subsidised by other customers. The longer he works there rent-free, the more everyone else pays.

But isn’t it good that cafes are what is known as a “third place”, the public space between home and a workplace where human contact happens? Doesn’t the contemporary cafe survive and thrive thanks to its attractiveness as a third place? Isn’t the free Wi-Fi part of the deal?

When he invented the term “third place” in his 1989 book The Great Good Place, sociologist Ray Oldenburg said libraries, gyms, parks, town squares and churches were essential to the health of communities; a busy third place was the community. Thirty-five years after Oldenburg wrote this, the need has sharpened. Online third places, as we become conditioned to them, fail to replace actual human contact and even warp its possibilities. In a work-from-home, internet-shopping, Facebook world, it’s hard to imagine a bricks-and-mortar third place more popular than the humble cafe.

Unlike most of those traditional third places, however, the humble cafe is a private enterprise. Are we prepared to pay for them, or does our occasional $4.50 entitle us – as it seems to entitle the chairman of the corner table – to extended occupation?

Department stores have long understood the economics of private cross-subsidy. I have fond memories of the old David Jones Sydney CBD cafeteria: the reward for having endured a shopping trip with my grandmother was to slide our wooden trays past glass-fronted cases while loading up with scones, jam and cream. I don’t remember the shopping, only the food and drink. You bought entry to the third place with your retail spend.

I can’t remember anyone exploiting that cafeteria as a free office.

If it’s so vital a community service, should the third place be paid for out of the communal purse? Expenditure on food and drink would be ideal, but it’s hard to get old mate to pay. By the way, he’s also the first to complain, when he has to leave at 1pm because the place is closing, that Sydney is not a “global city” because there aren’t enough others like him to create an afternoon or evening coffee economy. Luckily there aren’t enough others like him to destroy the morning coffee economy.

He gets the best deal ever. His office is paid for by someone else’s coffee. If the cafe asked him to pay rent or a minimum spend for his several hours a day, it would be inviting the highest of high dudgeon.

You feel like going up to him and asking, “Another coffee? Something to eat?” It wouldn’t end well, but it does make you wonder. Is he the same guy who wants lower home prices but just not for his home? Who wants more social housing near all railway stations except his? Who deplores immigration except for those who clean his house and stack his shelves? Who supports nuclear energy as long as the reactors are somewhere else? Who wants to pay less tax while getting more hospitals and submarines? Who believes in rules so long as they don’t apply to him? Who would be the first up on his hind legs if council rates were raised to subsidise third places such as libraries and, yes, cafes? Who would flat-out refuse if someone asked him to pay more for his coffee?

Thought so.

Malcolm Knox is a journalist, author and columnist for The Sydney Morning Herald.