No one questions the fact that restaurant employees, and owners as well, are suffering greatly due to the chaos COVID-19 has wrought over the past several months. But lost in the backbiting on Capitol Hill over whether we should pay a premium on unemployment benefits, or restore the “three-martini-lunch” deduction, is the fact that the restaurant industry could benefit from structural, financial and legal help during this crisis.
To that end, last week a coalition of dozens of restaurant workers and leading restaurateurs in New York asked the state’s governor, Andrew Cuomo, to deploy his executive authority to push for changes that both benefit and reform the state’s restaurant industry.
The “Safe and Just Reopening Plan” looks out for restaurant owners and workers alike. For restaurateurs, the plan advocates for both tax relief for restaurants and the ability to charge a “safe reopening fee” if restaurants agree to certain health and safety protocols in the era of COVID-19.
For workers, such a plan would allow wait staff to tip out kitchen and other back-end staff and, most importantly, it eliminates the subminimum hourly wage that has long been the norm in most U.S. states.
The federal minimum wage for tipped workers is $2.13 per hour. While actual wages vary from state to state, all workers who receive tips are paid less than the state's minimum wage for other workers. This subminimum wage is a holdover from a long begone era, and its critics say that the federally mandated low hourly wage is part and parcel of the systemic racism endemic across the U.S.
According to historians who focus on the post-Civil War era, the subminimum wage has its origins in slavery. After Emancipation, there was plenty of low-wage labor available to businesses such as restaurants. The hospitality sector was quick to catch onto the idea that hiring Black people to work for tips would be a way to keep labor costs down. At the same time, growing trends in transatlantic travel introduced American travelers to a European custom that appeared sophisticated once U.S. citizens returned to their side of the pond. The problem with the sophisticated veneer of tipping was that what’s now considered etiquette has its origins in racism.
One company notorious for this practice during the later 19th century was the Pullman Company, which hired Black porters to cater to its well-heeled white customers who traveled by train across the U.S.
Fast forward decades later, and coalitions including One Fair Wage insist it’s time to rethink the way in which the restaurant industry pays employees.
The subminimum wage in New York State is higher than the U.S. federal rate ($11.80 versus $2.13), but in this day in age anyone knows the math doesn’t add up to allow for a minimal standard of living. “In New York, tipped workers, still subject to a subminimum wage by law, are more than twice as likely to live in poverty and rely on Medicaid compared to the rest of the state workforce,” says the authors of the group’s most recent report.
One Fair Wage also says its data show that, nationally, white male tipped workers make about $5 an hour more than their Black women counterparts; in New York City, the discrepancy is $8 an hour. And the gaps aren’t just in wages: The group's research shows that restaurants were twice as likely to hire white workers over people of color. Further, 40 percent of white managers in the restaurant industry demonstrated a clear preference to hire white people over Black people and other people of color.
To date, 50 restaurant owners and at least 200 workers have joined One Fair Wage to support the Safe and Just Reopening plan. Joining them are celebrity chefs David Chang of Momofuku fame, as well as Tom Colicchio and Danny Meyer.
Chang in particular has been vocal about the ravages COVID-19 has heaped on restaurant workers, and emerged as a leader when it comes to showing how restaurants can operate safely during this era. Forced to close some of his restaurants, he co-launched a fund to help employees make ends meet, and he directed his human resources staff to pay healthcare premiums for laid-off employees as long as it was financially possible.
As of press time, the One Fair Wage-led directive is focused on New York, but it offers a template of how all U.S. restaurants and their employees can survive during a pandemic that so far appears to have no end in sight.
Be sure to sign up for the weekly Brands Taking Stands newsletter, which arrives in your inbox every Wednesday.
Image credit: Jason Leung/Unsplash
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.