A New Direction for Restaurant Workers? Zingerman’s and the “Thriveable Wage”

By Sheila Bapat
Cross-posted from RH Reality Check

The wage crisis among restaurant workers has gained attention in recent weeks, reminding the public that federal minimum wage for restaurant workers is currently$2.13 per hour even while the federal minimum wage for most other sectors is $7.25 per hour. According to Saru Jayaraman, Director of the Food and Labor Research Center, low wages for restaurant workers is the biggest legacy of former Republican presidential candidate Herman Cain, who served as head of the National Restaurant Association (NRA). The NRA, one of the most powerful lobbies in the United States, worked hard during Cain’s tenure to keep the cost of labor low in its sector. Jayaraman also points out that women constitute at least half of people in the restaurant sector.

In light of the industry’s powerful lobbying to keep wages low, it is rare to find restaurants—or corporations generally—driven by a desire to improve their employees’ overall living wage and wellness, rather than how the market can make them richer. Enter Zingerman’s Community of Businesses (Zingerman’s), made up of 18 partners and several different enterprises including a restaurant called Zingerman’s Roadhouse. Based in Michigan, Zingerman’s partners are knownfor having built their enterprises based on how they can “enhance the lives of as many people as [they] possibly can.”

In practice this means offering all their employees—part time and full time—health and dental benefits, and paid time off. After they work at Zingerman’s for a year, employees are eligible for 401(k)s.

Tabitha Mason, who built her career in the restaurant industry, is the manager of Zingerman’s Roadhouse. “Early in my career at a different restaurant, I probably made $20,000 per year. That was a more traditional restaurant, where servers were viewed as disposable,” Mason told RH Reality Check. “And previous restaurants I worked at would try hard to restrict who could receive benefits—like it was an exclusive club.”

While Zingerman’s Roadhouse pays its staff just a smidge over the federal restaurant workers’ minimum wage, their staff earn $21 per hour. Management monitors tips to ensure this, according to Mason.

And last year, Zingerman’s partners began cultivating a new dimension of their focus on employee-centered business:  the concept of a “thriveable wage.” We’ve heard of the minimum wage, described above, which offers a floor for what a worker can legally earn in a given sector. And we’ve heard of a “living wage,” which ensures a worker can earn what is necessary to survive.

Moving to a “thriveable wage” is part of Zingerman’s deeper commitment to their worker and an understanding that, as an employer, they’re part of a larger ecosystem of workers, their families, and their communities, not just partners and shareholders. At a retreat last year, Zingerman’s partners began toying with the concept of a thriveable wage, drafting a vision statement that includes the following:

We [are raising] wages to a “thrive-able” level throughout the organization and there is a powerful multiplier effect going on. Higher wages lead to higher morale and is the engine that keeps everything spiraling upward. In many cases, productivity increases due to lowered stress levels in the lives of the people in our organization because of assurance that their financial needs are covered….We have less people needing to rely on forms of public assistance like SNAP card benefits and the Washtenaw Health Plan. We maintain the offering of assistance from our Community Chest because it serves as the safety net for employees without personal networks of support or who face disastrous emergencies outside of their control.

The thriveable wage vision statement, still in draft form, cites lower employee attrition as a result of higher wages. It also includes plans to move in a “books wide open” direction, enabling employees to help define what a thriveable wage actually means in practice, and promising transparency in pay scales and wage information. “Just as an ideal democracy does the work of teaching everyone how to vote responsibly, we as a business give to all our members an understanding of finance as a fundamental tool,” says the draft vision statement.

Zingermans’s ethos seems to be in stark opposition to the restaurant lobby and most corporate lobbies. Paul Saginaw, one of the original two Zingerman’s founders, can’t wrap his brain around why corporate lobbies are motivated primarily by profit. “Maybe there’s limits to generosity but probably no limit to greed,” he told RH Reality Check. “All I know is we created our businesses intentionally based on what we wanted to be, and the life we wanted to live.”

Follow Sheila Bapat on twitter: @sheilabapat

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