It's a Wage Shortage – Not a Labor Shortage – and It Disproportionately Affects Women and Persons of Color
It's a complicated economic situation, but one easy solution is increasing pay for restaurant workers
By Jessi Cape, Fri., May 28, 2021
If you type "restaurant workers" into any search engine, the revved up reckoning of labor and wages in the United States' massive hospitality industry is glaringly apparent. All over the country, including Austin, worker strikes are gaining momentum as elected officials and business owners at every tier discuss forward steps in this not-quite-post-pandemic era. The COVID-19 crisis – and all of its inherent dangers and societal changes – has changed the restaurant industry forever: Workers are no longer willing to work the same high-risk jobs for low wages and no protection. Surveys of hospitality workers juxtaposed with many intricate factors ("It's the economy, stupid") indicate it's an exceedingly complicated situation, but experts say one of the most effective solutions is raising the wage of restaurant workers.
Over the past few weeks, as global megachain McDonald's workers are gaining picket line support in multiple cities, employees from several stores in Austin mini-chain JuiceLand are also striking. Public back-and-forths on social media between striking employees and owner/management teams are gaining attention as they negotiate livable wages, accountability for discriminatory practices, and amendments to subpar safety standards. (You can follow both sides of the local story on Instagram through the company profile and the recently created @juicelandworkersrights.)
A quick glimpse at the popular Poached Jobs website reveals more hiring opportunities in Austin hospitality than ever before, but it's a mixed bag when it comes to wages. Many restaurants maintain the federal subminimum wage of $2.13 per hour plus tips, or the federal minimum wage of $7.25 per hour, depending on the position. (Note: It has been almost 12 years since the federal minimum wage was adjusted.) Some employers offer incentives like sign-on and referral bonuses for servers and line cooks and more "employee perks," like gift cards and merch. Others, after realizing the correlation between lack of employees and low wages, have adjusted their models to adopt livable wages, often abiding by standards similar and equal to those set by local org Good Work Austin and national nonprofit One Fair Wage. Austin Shift Meal – a group formed by and for Austin's hospitality workers in spring 2020 when, according to the Texas Workforce Commission, the sector lost about half of its workforce – has shifted their model from providing free weekly meals to underemployed workers to hosting job fairs to fill the wide employment gaps in the nation's second-largest industry.
Almost 6 million workers lost their service industry jobs due to COVID-19 closures, but 63% could not get unemployment insurance because in most states, including Texas, they were told their wages were too low to qualify. Adding fuel to the fire, effective June 26, Gov. Abbott has opted out of the federal supplement of unemployment benefits ($300 per week; federally subsidized). The move was supported by almost 40 business groups including Texas Hotel & Lodging Association and the Texas Restaurant Association – a group that lobbies and advocates for thousands of restaurants, in addition to championing salves like vaccines for hospitality workers and other mitigating factors like child care assistance – citing in a press release that the elimination would aid businesses desperately in need of new hires. But according to the One Fair Wage report released this month, detailing a survey of 3,000 workers from across the country, 53% of people in the survey said they are leaving the industry; 76% said the No. 1 reason for leaving is low wages and tips; and 78% – nearly 8 out of 10 workers – said the thing that would make them come back to work in restaurants is a full livable wage with tips on top. The fight to pass the federal Raise the Wage Act, which would raise the overall minimum wage to $15 and have an elimination, over many years, of the subminimum wage, is gaining traction at the same time that nearly 40% of restaurants report difficulty in staffing.
When asked about changes through the pandemic that has devastated an already struggling industry, Saru Jayaraman, president and co-founder of One Fair Wage, explains, "I mean, that's the key word – already struggling. We called it a preexisting condition in the industry. Prior to the pandemic, the industry was the second-largest and fastest-growing private sector employer in the U.S. – nearly 14 million workers – but was always the lowest paid, and that's largely due to the money, power, and influence of the trade lobby, National Restaurant Association, which we call 'the other NRA.' It represents the chains, the IHOPs, the Denny's, the Applebee's, and that trade lobby has actually been around more than 100 years."
Jayaraman, also an attorney, a professor at UC Berkeley, and the author of three books on restaurant industry labor practices, started her two decades of this work after 9/11, when she co-created an organization to support the surviving workers from Windows on the World, the restaurant at the top of the World Trade Center. The work grew into a national series of organizations, including One Fair Wage, that fight for higher wages and better working conditions in the restaurant industry. "From the very beginning we knew we wanted to raise wages and working conditions, but we learned early on that we couldn't do that alone, without a partnership with employers that were willing to change their practices and do the right thing."
The dire situation of workforce versus wages that both employees and employers find themselves in is not new. Jayaraman explains, "It is very much a result of 150 years of perpetuating a legacy of slavery. So prior to Emancipation, tipping originated in feudal Europe. It was an extra bonus on top of the wage, but because of the desire to not pay Black people, to basically perpetuate the idea of free Black labor, they changed the notion of tipping from being an extra bonus on top of the wage to being a replacement for wages, changing the wage to zero and having them work exclusively for tips. Now, today that wage has gone from $0 at Emancipation to $2.13 an hour in Texas, and around the country, which, frankly, is $0 an hour in today's terms. ... And that situation was barely livable prior to the pandemic."
Due to closures and difficulties with unemployment benefits, many restaurant workers were forced to go back to work last summer, despite record numbers of COVID infections. "Workers knew long before the CDC and UCSF named restaurants 'the most dangerous place to work during a pandemic' that it was the most dangerous place to work." Jayaraman says that reports show tips were down 50-75% and hostility, health risks, and sexual harassment – already higher than any other industry in the U.S. – went way up. "People were asked to do so much more, put up with so much more, for so much less. And the insanity of the kind of national attention now on the labor shortage is that we were spending all of our time trying to get everybody's attention, screaming from the top of our lungs that people are leaving, people are leaving, people are leaving en masse. Especially women [and mothers]. The only reason it's news [in 2021] is that states are reopening, restaurants are reopening, and they're finding they don't have enough staff to fully reopen, so they're working with an understaffed, underpaid crew and the folks that remained, a lot of them are walking out saying, 'You don't pay me enough to do the work of three people.' So you are seeing this mass exodus."
In particular, and somewhat predictably, women and persons of color are at the center of the crisis. From the OFW report: "These dynamics worsened during the pandemic, which had devastating impacts for women and mothers across all sectors, with many economists dubbing the crisis a 'she-cession.' Even prior to the pandemic, working mothers already bore the brunt of domestic duties and were heavily concentrated in low-wage jobs. As one of the largest employers of women and one of the largest employers of subminimum wage workers, the restaurant industry plays an outsized role in perpetuating inequality among women, particularly women of color."
The nearly 70% female workforce, mostly in small casual restaurants, is struggling with three times the poverty rate of the rest of the U.S. workforce, and the highest rates of sexual harassment of any industry in the U.S. "Because they had to tolerate inappropriate customer behavior to feed their families in tips," says Jayaraman. According to the U.S. Department of Labor, prior to the pandemic, seven states (California, Oregon, Washington, Nevada, Minnesota, Montana, and Alaska) adopted policy to require employers pay tipped employees full state minimum wage before tips; other states have modified versions, and still others, like Texas, still use the minimum cash wage payment as required by federal law. (That's the infamous $2.13 per hour.) Those seven states "not only have higher industry job growth rates than Texas, higher smaller business growth rates than Texas, but they also have one half the rate of sexual harassment in the restaurant industry," says Jayaraman.
Why? "Because when a woman is paid a full minimum wage she doesn't have to feel like she has to depend entirely on the customers to feed her family. That power dynamic just got so much worse during the pandemic," she says. So much worse that OFW created a term, "maskual harassment," to describe the explosive pandemic trend of customers asking servers to remove or lower their masks to determine tip rates. "It is life-threatening. But what we saw is that when a woman gets a full minimum wage, if a guy asks her to take off her mask, she can say, 'No, buzz off.' And she can count on a wage from her boss like every other worker in every other industry. But if the tip is her only source of income, as it is in Texas, then when a man says take off your mask, then she has no choice."
Jayaraman also cites the work of Catherine A. MacKinnon, largely considered the nation's leading scholar on sexual harassment (she coined the term "sexual harassment" and made it illegal in federal law). "She did a series of reports with us, and, one, she has said that in all of her years of study, she's never seen an industry with higher rates of sexual harassment than tipped restaurant workers. She said it's higher than the military; it dwarfs all other sectors. Two, she said that she's never seen a policy in all of her years that is more effective in cutting sexual harassment than just paying these women an actual wage. She says it is more effective, in her research, than naming sexual harassment as illegal, which has been her life's work. Because naming sexual harassment as illegal provides women with the ability to sue, but it doesn't prevent what is happening daily."
Most everyone agrees that even when willing, the current scenario further indicates that small businesses and restaurants cannot sustain the wage increase alone – it must be a policy enacted at a federal level to affect the larger, lobby-backed restaurant groups and also communicate to the 7 million industry workers on their way out that working in restaurants is "worth it." She specifically mentions local favorite, L'Oca d'Oro (locadoroaustin.com), as having (years ago) adopted the One Fair Wage model; advocating at state, local, and federal levels for policy change; and rallying fellow small restaurant owners to follow suit.
What are specific action items that One Fair Wage suggests? First and foremost is raising the wage. "If people want to enjoy their Sunday brunches like they did before the pandemic, we're all going to have to work together to raise this wage," says Jayaraman. She adds that in addition to supporting fair wage restaurants, it is important to communicate with other restaurants and food service businesses:
"The time has come. We as consumers want to see them change their practices, pay a livable wage. That's how you're going to be able to attract workers to come back to work. And we know that they can't do it alone, so join forces with Adam [Orman] and others to advocate for this to happen across the board. Communicate to the non-high-road restaurants that that's how change is going to happen. The key to know is that we are just not going to be able to eat out the way we used to. There are just two options: Raise the wage or shrink the industry by half. If we want to eat out the way we did before, we have one option: Raise the wage."
On Tue., June 1, Austin Shift Meal is hosting a job fair (10:30am-12:30pm at Yard Bar, 6700 Burnet Rd.) with nearly 20 local hospitality businesses. Good Work Austin offers information for local restaurant owners and supports Austin’s industry workers and food-insecure communities through philanthropy and partnerships with restaurants.
For the full One Fair Wage report, see onefairwage.site