Going out to breakfast, lunch or dinner is something that millions of people do each day in the United States. Whether it’s a family outing, a date or a quick lunch before you punch back on the clock, Americans find their way into a restaurant for a short time to fill their stomachs and relax. The question many people don’t ask is what the life is like of the person who serves and cooks them their food.
In today’s America, both mom and dad are often holding down a job. With both parents working, going out to eat has become even more of a convenience. Restaurant workers, from the host, to the bus boy to the server and bartender, come to work each day, making little in their paycheck and more often than not, have no benefits to show for it. During his most recent State of the Union address, President Obama called for a raise in the national minimum wage, from its current rate of $7.25/hr, to $9/hr. The majority of the American people support the president’s proposition, but Republicans are highly against it, claiming it would hurt businesses in the long run. The current minimum wage of $7.25/hr is dangerously low, not keeping up with inflation and can barely support a single person living in a studio apartment. If the federal minimum wage had kept up with inflation over the past 40 years, the rate would be $10.67/hr instead of $7.25
If the federal minimum wage seems low, the minimum wage for tipped workers is even less. Tipped workers, like servers and bartenders, have a federal minimum wage of only $2.13/hr. Some states have higher minimum wages for tipped workers, but the majority top out at less than $5/hr. The minimum wage for tipped workers has not been increased since 1991, and in 1996, Herman Cain, then the head of the National Restaurant Association, struck a deal with President Clinton and congress to keep minimum wage for tipped workers stagnant even when the regular minimum wage was increased.
According to a 2009 report by the National Employment Law Project, since 1991 when the tipped workers minimum wage was frozen, its value has fallen by 36% in “real terms,” resulting in tipped workers living in three times the poverty rate of the rest of the US workforce. The New York Times also reports that tipped workers are on food stamps nearly twice as much as the rest of the national workforce. Policymic.com notes that 70 percent of tipped workers are women with children who rely heavily on government supported programs.
The argument against raising the minimum wage for tipped workers is that the business itself will suffer, pushing the costs on to the customers, resulting in a decline in profits. The problem with the conservative argument is that in reality, it doesn’t hold water. A report by the National Employment Law Project shows that two-thirds of America’s low-wage workers are employed by companies with more than a hundred employees. The report also shows that 90 percent of the 50 largest employers of low-wage workers were profitable last year and nearly 80 percent of them are more profitable than they were before the recession in 2008.
When it comes to companies who rely heavily on tipped workers, one of the loudest voices is the Darden Restaurant Group, the largest full-service restaurant group in the world with nearly 2,000 restaurants and almost 170,000 employees in North America. Restaurants under the “Darden” banner include Red Lobster, Olive Garden and Longhorn Steakhouse. According to DignityatDarden.com, the restaurant group made record profits over the last year, making enough to not only pay their workers more, but also provide much needed health care benefits and sick time off.
“Last year, Darden (a publicly traded company) made profits of more than half a billion dollars – but the profit went to their executives and Wall Street investors, such as J.P. Morgan and State Street Bank.2 Just last year, their CEO made $8.5 million with a total market stock & options of $22 million.3 Their Chief Operating Officer made $5 million with a total market stock shares & options at $11 million.4 Their Chief Financial Officer made $2.5 million with a total market value of stock shares and stock options of $3.8 million.”
The site also cites the ROC National Diners’ Guide 2012, noting that nearly all Darden’s workers earn poverty wages and don’t receive any benefits.
“As shown in our ROC National Diners’ Guide 2012, a consumer guide for ethical eating, many of Darden’s nearly 168,000 restaurant workers earn poverty wages – with tipped minimum wages as low at $2.13 and non-tipped wages as low as $7.25 an hour, or $15,080 per year, in many of their restaurants. This annual wage is well below the income level that a family of three needs to remain out of poverty ($18,530) as measured by that the Department of Health and Human Services. With more than half a billion in profits, Darden can afford to provide better wages and benefits to their workers. Further, Darden does not offer their restaurant workers paid sick days, which is critical to protecting public health especially in an industry where workers deal with food.7 Only roughly 13% of restaurant workers have paid sick days. Workers earning poverty wages simply cannot afford to take time off when they are sick – paid sick days allows them to stay home when they are ill, recover, and protect consumer health.”
Darden isn’t totally to blame for the lack of benefits provided to tipped workers, nearly 90 percent don’t receive sick pay and the majority don’t receive health care. In an industry where people are constantly working with food and drinks, health care and sick time is essential, but is rarely available or offered even by companies who can easily afford it.
Knowing the low wages and lack of benefits that are being provided to tipped employees, remember that the next time you go out to eat. The workers who are taking your order and bringing you your food with a smile on their face aren’t always as happy as they seem. Show some gratitude, leave a generous tip and support them by answering the question: Don’t you want the people who are working with your food to be healthy and happy?