Restaurant and hospitality workers lost more jobs during the pandemic than workers in any other industry. And those who are still working are shouldering more and more responsibilities, for lower and lower pay. The good news is that independent restaurant owners nationwide are changing their compensation models and reimagining every aspect of their businesses—using this crisis as an opportunity to fundamentally reimagine their industry for the better. Public policies need to follow suit.
Unfortunately, the restaurant industry has an ugly history of wage injustice. When the United States government finally, formally, abolished slavery in the middle of the 19th century, the restaurant industry wanted to keep using unpaid labor. And through a network of well-heeled restaurants that would become the National Restaurant Association, one of the most powerful corporate lobby interests in the nation, the restaurant industry got what it wanted.
For almost a century, many restaurant workers—most of whom were formerly enslaved Black men and their descendants—were literally paid a $0 wage. They were expected to rely entirely on tips as wages, not only an inherently immoral arrangement but an impractical one given that customers grew up in a nation that had not seen fit to pay Black workers since its inception, let alone treat them with any dignity. “Colored men are the best waiters by nature, and are peculiarly adapted to servitude,” one restaurant owner said at the time.
A century later, when the federal government established a universal minimum wage for American workers, restaurant workers were explicitly excluded. The corporate restaurant industry at the time pressed for—and received—a special carve-out allowing its workers to be paid a subminimum wage under the theory that tips would make up the difference. But the federal Department of Labor’s wage and hour division has estimated that 84% of restaurants violate labor standards including tip violations. In other words, far too often, workers don’t get the tips they’re due. And so the federal subminimum wage for tipped workers, which hasn’t been raised since 1991, remains just $2.13 an hour. In fact, once taxes are taken out, workers still regularly get paychecks that just say $0.00.
Imagine this as a preexisting condition in the industry that the COVID-19 pandemic exacerbated. It was hard enough to make ends meet as a restaurant worker before. The pandemic made it impossible. Of course this is because restaurants are struggling and thus owners and managers are struggling too, but workers were always living tip to mouth. Now, tips are down reportedly by 50% to 75%—for those who have gone back to work. One out of every four Americans who have lost their jobs because of the coronavirus fallout is a restaurant worker.
The restaurant industry has been a warning to the rest of the nation: that danger to us all of perpetuating an unjust and unfair economy paved with disposable goods and disposable workers. Yet now, remarkably, the industry is pivoting in a transformative new direction. During the pandemic, hundreds of restaurant owners have changed their minds on the subminimum wage, and are interested in reimagining compensation models—and every other aspect of the industry’s business model.
Many of these employers were shocked to see how little savings and safety net their workers had to rely on when the pandemic hit. Especially given that their workers didn’t have health insurance and sick leave, employers simply couldn’t believe that their employees, who worked so hard day after day, literally didn’t qualify for unemployment benefits because, factored according to the base rate of the subminimum wage, they didn’t earn enough to qualify for unemployment insurance. Corporate chains had intentionally designed these systems that deny rights to workers. But many owners of small and midsize restaurants were not deliberately callous; they simply did not know how much economic hardship their business practices placed on their workers. Owners were focused on their margins. Workers were living on the margins.
Employers realize they’re now asking more than ever of their employees, but those workers are still being paid a subminimum wage. During the pandemic, those who have been called back to work are actively risking their lives serving customers, working in one of the riskiest positions amid COVID-19. Plus, now restaurant workers have to take on additional roles enforcing public health guidelines. Research already showed that having to rely on tips as wages subjects women restaurant workers to higher rates of sexual harassment—and that rates of harassment go down by half in the seven states that pay a full, fair wage. Yet new survey data suggests that now female restaurant workers are facing increased sexual harassment because of the increased power dynamic between female servers and fewer male customers.
Male customers are making lewd and sexualized comments about servers’ masks and saying things to women servers like, “Take off your mask so I can see how much to tip you.” In other words, while tips and, thus, wages for restaurant workers are plummeting, sexual harassment is rising. Low-wage restaurant workers, who are predominantly women of color, face an impossible bind—a bind in which they’ve been placed by the restaurant industry.
The industry is now clamoring for change. More and more restaurant owners are supporting One Fair Wage—the idea of a full, fair minimum wage for every restaurant worker, with tips on top. In fact, restaurant owners who had publicly attacked the idea of One Fair Wage and spent their own money and political capital fighting change are now the ones changing their restaurant policies while at the same time pushing for state and federal legislative change.
Celebrity chefs and owners as diverse as David Chang, Danny Meyer, Dominique Crenn, and Tom Colicchio have joined the push for One Fair Wage. And groups of restaurant owners—fed up with the National Restaurant Association, whose corporate behemoth policies put independent restaurants in the back seat and workers under the tires—are creating new constellations like RAISE High Road Restaurants and the Independent Restaurant Coalition, groups of restaurants that want to do right by owners, customers, and workers.
Every day, the movement for a just, fair, and sustainable restaurant industry is growing. Two leading industry trade magazines—Nation’s Restaurant News and Full Service Restaurants Magazine—have had headlines proclaiming the industry’s interest in transitioning to One Fair Wage, and NPR reported on a recent National Restaurant Association statement that it is “open to the conversation about wage levels in the industry.” And in perhaps the most significant development, the federal Raise the Wage Act, which includes ending the subminimum wage and increasing the federal minimum wage for everyone to $15 an hour, was incorporated into President Joe Biden’s pandemic recovery plan. The plan makes clear that fair and just wages are a vital part of economic recovery and, as Biden puts it, building back better (though as of now the wage increase looks unlikely to pass in the senate).
We can imagine a future where diners don’t just ask about where produce comes from but how well workers are paid, and where owners don’t just boast about their organic sourcing but also boast about the health insurance and number of paid family leave days they provide all of their employees. We can imagine a future with a thriving restaurant industry filled with thriving workers—healthy food and healthy workplaces as integral to a healthy economy. Most important, we can imagine a future in which every person who works in a restaurant, regardless of their position, is treated and paid like the skilled professional that they are—and as a result, our dining experience is superlative.
The possibility that the industry that has been among the worst employers could become one of the best could have tremendous implications for other sectors that have previously attempted to emulate the industry’s unjust and unfair practices. Since the National Restaurant Association has been the major opponent to ending subminimum wages, winning One Fair Wage in the restaurant industry would mean a much easier pathway toward One Fair Wage for thousands of other subminimum wage workers—gig workers, nail salon and car wash workers, parking and airport attendants, incarcerated workers, workers with disabilities, and youth. The possibility of a new, thriving future in the restaurant industry would catalyze change in other sectors employing low-wage workers.
We’re getting closer and closer to that future. Now we just need more. More investors saying they will only back restaurants, including chains, that provide a full, fair wage to all their workers. More diners choosing to eat at restaurants that don’t just celebrate where their produce comes from but ensure workers also enjoy the bounty. More politicians pushing for One Fair Wage at every level and in every way. More industry leaders helping to take our nation away from the low-road economy of disposable gig workers and plummeting wages toward a beautiful, safe, productive, inclusive, delicious, and just future for all.
Indeed, this moment points to a powerful, potential shift—where instead of having the worst business practices in our economy, the restaurant industry leads the field toward a more fair and free tomorrow.
Saru Jayaraman is cofounder and president of One Fair Wage, which advocates for cities, states, and the federal government to adopt a full, fair minimum wage for all workers, with tips on top. She is also director of the Food Labor Research Center at the University of California, Berkeley.
How Healthy Is the Future of Work? is an essay series featuring people working at the cutting edge of their fields sharing how emerging trends will affect the health of our country’s workers and workplaces in the future.
The series is curated by the Robert Wood Johnson Foundation. The authors’ views are their own.