Category Archives: Our Reports

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Impact of Raising the Subminimum Wage on Restaurant Sales and Employment

New research examining the strength of restaurant industries in states without a subminimum wage reveal that abolishing the tipped minimum wage is good for business and workers.

Key findings include:

● Above-average employment growth occurs in the seven states that have already abolished the subminimum wage (Alaska, Montana, Nevada, Minnesota, California, Oregon, and Washington).

● Per capita restaurant sales increase as the tipped minimum wage increases. Growth in tipped restaurant worker employment as a percentage of total state employment tends to be higher in the states that pay tipped workers above $5 per hour, and is higher still in states that have abolished the subminimum wage.

● Eliminating subminimum wage does not decrease employment. In fact, the restaurant industry projects employment growth over the next decade of 10.5% in the seven states without a tipped subminimum wage, compared to 9.1% in states with a subminimum wage.

● Since 2009, tipped restaurant workers have grown in importance as a percentage of total employed workers in $2.13 states, states where tipped worker wages are higher than $5.00, and states without subminimum wage—but growth of tipped restaurant workers as a percentage of total employment is highest in states without subminimum wage.

Find FACT SHEET: The Impact of Raising the Subminimum Wage on Restaurant Sales and Employment below or download here.

Find the press release here.

Find our full report, “Recipe For Success: Raising the Subminimum Wage Strengthens the Restaurant Industry” here.

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High Road 2.0: A National Study of Human Resource Practices, Turnover, and Customer Service in the Restaurant Industry

This study represents the first national employer survey of work and human resource management in the US Restaurant Industry. It documents the range of practices adopted by employers and how those practices affect turnover and employment stability—problems that are endemic across the industry.

We examined management practices and outcomes in four customer segments: fine upscale dining, casual fine dining,moderately priced family restaurants, and fast food/quick service (fast food) restaurants.

High levels of employee turnover are problematic in restaurants serving all four customer segments—leading to higher employee costs and lower service quality and organizational performance. In fact, our survey data demonstrates that better human resource practices can reduce employee turnover almost by half. 

Download the full report here.

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The Third Shift: Child Care Needs and Access for Working Mothers in Restaurants

The restaurant industry is one of the largest sectors in the United States economy and is projected to be among those with the largest growth by 2020. It currently employs over 10 million workers. Between 2000 and 2010, our economy as a whole shed jobs at a rate of -0.2 percent. However, food services and drinking places are projected to create over 860,000 new jobs between 2010 and 2020. Despite the industry’s growth and potential for lifting the livelihoods of its workers, especially for women and mothers, working conditions have deteriorated and wages have not kept pace with growth.

Please find the full report below.

The Third Shift: Child Care Needs and Access for Working Mothers in Restaurants

Download full report here.

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Realizing The Dream: How the Minimum Wage Impacts Racial Equity in the Restaurant Industry and In America

2013 marks the 50th anniversary of the March on Washington for Jobs and Freedom. One of the demands of that march was for a minimum wage high enough to secure a healthy and vibrant nation of workers who could provide for their families and participate in the nation’s prosperity. Despite this historic effort, income inequality retards many of the gains of the civil rights movement.

The federal minimum wage for all workers has stagnated at $7.25 per hour, and the sub-minimum wage for tipped workers has remained frozen at $2.13 per hour for over two decades. As a result, millions of Americans find themselves struggling in poverty even while working a full-time job. Though many work 40 hours or more each week, their wages are low enough that they must rely on food stamps and other public benefits to sustain themselves and their families. The minimum wage, at its current level, economically excludes and marginalizes millions of people who could instead be generators of growth throughout the economy. This burden falls disproportionately on people of color, since they represent 42% of minimum wage earners yet only make up 32% of the total workforce.

The restaurant industry is one of the largest and fastest growing sectors of the United States economy, employing over 10 million workers. The industry is the largest employer of people of color, and the second largest employer of immigrants. Unfortunately, the restaurant industry is the largest low-wage employer, accounting for 39% of all workers earning at or below the minimum wage. Workers of color and immigrants are disproportionately concentrated in the industry’s lowest paying positions. Forty percent of all tipped workers are people of color, and over 23% of all tipped workers are immigrants, a disproportionate number compared to the 16% of immigrants in the total workforce. Overall, 58% of workers with incomes below the poverty line, and over 50% of tipped workers and restaurant workers with incomes below the poverty line are people of color. 

Nearly six million workers would be lifted out of poverty if the minimum wage were raised to $10.10 as has been proposed in Congress, of which 60%, or over three and a half million would be people of color. Over 500,000 of these would be restaurant workers, and nearly 300,000 of these would be workers of color. Nearly 50% of tipped workers lifted out of poverty would be workers of color. Examining all tipped workers and their families, over 400,000 individuals of color would be lifted out of poverty, and 150,000 of these would be children. Among restaurant workers and their families, over 700,000 people of color would be lifted out of poverty, and over 250,000 would be children.

On all counts, an increase to the minimum and tipped minimum wage is a sensible solution. It would raise millions out of poverty, including hundreds of thousands of children and their families; it would especially help African Americans and Latinos (populations that played a pivotal role in the 2012 elections), and lift up communities that have been marginalized and denied the opportunity to escape poverty. Similarly, any effort to block certain groups, such as tipped workers, from receiving the benefits of an increase to the  tipped minimum wage would mean hundreds of thousands of children and their families would continue to suffer a dream denied.

Download the full report here.

This report was released on June 19th, 2013 by ROC United along with the Applied Research Center (ARC), Asian Pacific American Labor Alliance (APALA), Center for New Community (CNC), Color of Change, The Greenlining Institute, Jobs With Justice (JWJ), National Council of La Raza (NCLR), Praxis Project, and the United Workers Congress released a report studying the impacts of the full and tipped minimum wage on communities of color.

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Dime A Day: The Impact of Miller/Harkin Minimum Wage Proposal on the Price of Food

Opponents of raising the federal minimum wage often argue that, while the increase in wages may benefit low-wage workers, it will also increase the cost of food and other basic goods, thus hurting the very people the minimum wage increase is intended to help.

In this report, we examine this argument by providing a detailed analysis of the potential increase in food prices of new legislation proposed by Rep. George Miller (D-CA) in the House of Representatives and Senator Tom Harkin (D-IA) in the Senate that would increase the minimum wage to $9.80 over a three-year period in $0.85 increments, as well as increase the tipped minimum wage, which currently stands at $2.13, in similar increments until it reaches 70% of the full federal minimum, now known as the Fair Minimum Wage Act.

In our analysis, we take a conservative approach, making a number of assumptions that likely overstate the ultimate impact on consumer prices. Nonetheless, we find that while the Miller/Harkin bill would provide a 33% wage increase for regular minimum wage workers and would more than double the wages of tipped workers over the same period, retail grocery store food prices would only increase by an average of less than half a percent over the three-year phase-in of the new minimum wage, and restaurant food prices would increase by less than one percent per year. This increased cost of food, both away and at home, would amount to about 10 cents more per day on average for American households over the three-year period.

Download the full report here.

This report was made possible by The Food Labor Research Center at the University of California, Berkeley and The Food Chain Workers Alliance & ROC United.

Research and Writing: Chris Benner, Associate Professor, Center for Regional Change, University of California, Davis; Saru Jayaraman, Director, Food Labor Research Center, University of California, Berkeley

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Behind the Kitchen Door: The Hidden Reality of Philadelphia’s Thriving Restaurant Industry

Behind the Kitchen Door: The Hidden Reality of Philadelphia’s Thriving Restaurant Industry is a project of the Philadelphia Restaurant Industry Coalition—a broad gathering of academics, progressive organizations, restaurant workers and restaurant employers.

This report represents the most comprehensive research analysis ever conducted on Philadelphia’s restaurant industry.This research shows that some employers run successful restaurants by setting fair wages, benefits,and working conditions, thereby fostering employee satisfaction, lowering turnover costs, and increasing  worker productivity. However, the research also shows that Philadelphia restaurant jobs are far more frequently bad jobs, characterized by low wages, little or no benefits, and abusive working conditions. Because the restaurant industry is an important and growing source of locally based jobs, efforts must be taken to ensure that job quality in this sector allows for the long-term prosperity of Philadelphia’s restaurant workers, employers, and consumers.

Some of the findings in the groundbreaking report include:

      • 62.1% of Philadelphia restaurant workers fall below the poverty line for a family of three
      • Average annual real wages in Philadelphia restaurants decreased by 11% between 2001 and 2011, while earnings for the total private sector increased by 8%
      • Of all the workers surveyed in our study, 57.9% reported experiencing overtime wage violations and 40% reported working “off the clock” without being paid
      • Whereas white workers’ median wage is $11.29, the median wage for workers of color is $9.00. The wage gap is even greater when comparing women’s median wages: $11.47 for white women and $8.00 for women of color
      • Additionally, Philadelphia surpasses the national average of restaurant workers who lack access to earned sick days, with a startling 92.8% of restaurant workers without earned sick days. Given the low wages described earlier and the fact that 12 in 13 workers do not have access to paid sick days, it is not surprising that nearly two-thirds of Philadelphia restaurant workers (64.6%) have worked while sick. Nearly three out of four (71.7%) of those that worked while sick said that they could not afford to take the day off without pay, and almost half (46.4%) said that they were afraid of being fired or penalized for staying home.
      • Low wages and a lack of benefits available to restaurant workers has resulted in nearly 12% of restaurant workers relying on emergency room care when they are unable to afford medical care.
      • 19% of Philadelphians in the restaurant industry rely on public health insurance.

Download full report here.

The Philadelphia Restaurant Industry Coalition Partners Include: Action United, Comite de Apoyo a los Trabajadores Agricolas (CATA), Community Legal Services, Jobs with Justice – Philadelphia, Juntos, Media Mobilizing Project, New Sanctuary Movement, PathWays PA, Pennsylvania Immigration and Citizenship Coalition, Philaposh, Philadelphia CLUW (Coalition of Labor Union Women), The Restaurant Opportunities Center of Philadelphia, The Restaurant Opportunities Centers United, Dennis Brunn, Unitarian Universalist Pennsylvania Advocacy Network, Thomas Cronin, President Emeritus of AFSCME D.C. 47 and D.C. 47 Retiree Chapter, Stephen Herzenberg, Keystone Research Center, Brishen Rogers, Assistant Professor of Law, Temple University