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Lobbyists have kept minimum wage for servers and others at only $2.13 for 20 years

This Valentine’s Day, the restaurant industry’s busiest day of the year, a new research report shows that women who work in the industry face systematic discrimination, poverty wages, a lack of sick days, and five times more harassment than the general female workforce.

One major cause of poverty for these working women is that restaurant lobbyists have succeeded in keeping the federal minimum wage for servers and other tipped workers frozen at only $2.13 per hour for the past 20 years.

The new report, “Tipped Over the Edge,” was released today on Capitol Hill by Restaurant Opportunities Centers United (ROC-United), U.S. Representatives Donna Edwards and Eleanor Holmes Norton, and other major research and advocacy organizations, including Family Values @ Work, HERVotes Coalition, The Institute For Women’s Policy Research, Momsrising, National Coalition On Black Civic Participation’s Black Women’s Roundtable, National Council For Research On Women, National Organization For Women, National Partnership For Women & Families, National Women’s Law Center, Wider Opportunities For Women, Women Of Color Policy Network (NYU Wagner), and 9to5 National Association for Working Women.

“Everything else has gone up in the past 20 years – meal prices, CEO pay, and the cost of basic necessities like housing and health care,” said ROC-United Director Saru Jayaraman. “Congress needs to say no to restaurant lobbyists so the women who serve America its food can afford to eat.”

Mayaba Liebenthal, a server in New Orleans, said it is difficult surviving on $2.13 an hour. “I have had my phone and electricity cut off, having to make the decision of what I could without for a few days until I could afford it,” she said, ”Millions of people across America like myself deserve more.”

Findings in the report include the following…

Profiting from poverty.
Since 52% of all restaurant workers are women, but 66% of tipped workers are women, the lower minimum wage for tipped workers is essentially creating legalized gender inequity in the restaurant industry. In most industries, the gender wage gap is due to employer discrimination, but in the restaurant industry, it’s also a matter of law.
7 of the 10 lowest-paid occupations in the United States are restaurant occupations. Most of these occupations are majority female and pay median wages below the poverty line.
Servers – of whom 71 percent are female – are almost three times more likely to be paid below the poverty line than the general workforce and nearly twice as likely to need food stamps as the general popula tion.
Despite having the same poverty rate for the overall workforce of 6.7 percent, states that follow the federal tipped subminimum wage have a much higher poverty rate for servers than states without a subminimum wage (19.4 percent vs. 13.6 percent), and this burden of poverty falls mostly on women.

Discrimination by design.
The industry follows a conscious business model of confining women to the lower-paid positions within restaurants. Women are hired for only 19 percent of chef positions, for example, even though traditionally most women are more likely to do a majority of the cooking at home.
In addition, women are confined to the lower-paying seg ments of the industry such as quick-serve and family style rather than the highest-paying fine dining segment. So even within the same job classification of server, full-time, year-round female servers are paid just 68 percent of what male servers are paid ($17,000 vs. $25,000 annually). Over a work career, that means the industry takes an extra $320,000 from each female server – money that might otherwise make it possible to buy a home or car or send children to college.

Five times more sexual harassment.
Nearly 37 percent of all sexual harassment charges filed by women with the Equal Employment Opportunity Commission (EEOC) come from the restaurant industry –

more than 5 times the rate for the general female workforce.
Food handling while sick.
While only 31 percent of U.S. employers don’t provide health coverage for employees, 90 percent of restaurant workers surveyed nationwide reported not being provided employer-paid sick days or health benefits. Two–thirds reported having to cook, prepare, and/or serve food while sick because they could not afford to take unpaid time off.

Unpredictable scheduling.
Restaurants typically choose not to provide workers with predictability and more than a few days’ advance notice of schedules, a burden that falls hardest on women juggling child care or elder care arrangements.

Raise the minimum wage for servers and other tipped workers
In 1996, restaurant industry lobbyists convinced Congress to overturn 30 years of past practice that provided that the subminimum wage for tipped workers automatically rose with federal minimum wage increases for other workers.

Since then, seven states have eliminated the subminimum status of tipped workers entirely and provide that restaurants must pay them at least the minimum wage.
But even if the federal subminimum for tipped workers were raised to 70 percent of the normal minimum wage of $7.25 per hour (the same percentage as before 1996), that increase to $5.08 per hour would immediately improve incomes for the families of nearly 837,200 workers, 630,000 of whom are female, who are not in states that already provide higher minimums or subminimums, and raise the wage floor for five million women. It would also decrease the gender pay equity gap in the industry by one fifth.

“Poverty-wage women are subsidizing restaurant CEOs and their Wall Street shareholders,” said Jayaraman “It’s Robin Hood in reverse.”

The National Restaurant Association just released its 2012 forecast, which predicts the restaurant industry will earn a record-breaking $635 billion in revenue this year, despite the country’s economic downturn.

Over the years, the industry has become dominated by wealthy chains that often have large Wall Street stockholders. These chains lead the National Restaurant Association in fighting to keep wages low and benefits out of this growing industry.

For example, Darden Restaurant Co., the nation’s largest full-service chain, made more than a half billion dollars in net income in fiscal 2011. Darden owns and operates approximately 1,900 restaurants, including Capital Grille, Red Lobster, Olive Garden, LongHorn Steakhouse, Bahama Breeze, and 17 Seasons. Major shareholders include J.P. Morgan Chase, State Street Corporation, Capital Research Global Investors, Lazard Asset Management, and other Wall Street banks and investment companies. Darden’s CEO, Clarence Otis Jr., a former executive of J.P. Morgan; Kidder, Peabody & Company; and First Boston Corporation, had compensation in 2011 of $8,480,148 along with stock shares and options worth $22,126,933.

In addition to an increase in the subminimum wage for tipped workers and a raise and indexing to inflation of the federal minimum wage for all workers, the report’s recommendations include establishing a national standard for paid sick days; mandatory sexual harassment training; support for job training and career ladders; stronger enforcement of equal opportunity laws; and support for collective organizing among restaurant workers.

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