How Are Some Restaurant Owners (Ahem, Boundary Stone) So Clueless About Restaurant Work?

Yesterday, the owner of DC-based restaurant and bar, Boundary Stone, tweeted that he was not in support of a bill before the D.C. City Council that would raise the minimum wage for bartenders, servers and other tipped employees from $2.77 to $8.25 per hour.

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The Washington Post reported that, “the blowback was immediate, unequivocal and intense. Patrons who said they were in Boundary Stone “3x this week” expressed disappointment about the tweet’s language. Others said they wouldn’t go back until Boundary Stone gave its tipped employees minimum wage. Some said they’d never return.”  Asher Huey, a former political organizer and Boundary Stone regular, was behind a counter petition demanding a raise for all tipped employees, and immediately started feeling the heat from local restaurant owners and the local restaurant association.

The fallout revealed a few common restaurant industry myths, let’s address them:

1. “A $5 or $6 increase in hourly wages wouldn’t mean much to a tipped employee, already earning six figures.” – Jeff Black (owner of BlackSalt and Pearl Dive Oyster Palace, among other places, says members of his wait staff earn between $85,000 and $150,000 annually). In fact, RAMW members recently informed the D.C. Council that their tipped employers earned, depending on what kind of restaurant they worked at, between $20 and $35 an hour.

Alright folks, your average server does not pull down six figures. This salary is the exception, not the rule. The average restaurant worker in D.C. makes $22,818; in D.C., the tipped minimum wage is a whopping $2.77. For Alice*, a DC-based server, getting by required relying on friends for loans and cutting back on buying expensive food like fresh produce. She says, “When there was a slow week or when I am charged for someone walking out without paying for a meal, I could earn as little as $30 in tips after working a 10 hour shift. With all of my $2.77 paycheck for each hour going to taxes most months, this left me in quite a lurch when it came time to pay for rent, groceries, and utilities.” Alice used to work for a restaurant belonging to the National Restaurant Association; she was fired for supporting an increase to D.C.’s tipped minimum wage.

Nationally, the tipped minimum wage has been frozen at $2.13 an hour since 1991, resulting in servers across the US using food stamps at double the rate of the rest of the US workforce. In fact, they’re three times as likely to live in poverty. The majority of folks living off tips are not working at high-end restaurants like Boundary Stone, but at mega-restaurant corporations, like Red Lobster, AppleBee’s or the Olive Garden.

2. “The heart of the industry’s position” which is that restaurant owners are already required to pay all employees the city’s minimum wage of $8.25 an hour, whether they’re tipped or not.

Great point, because we all know laws are never broken, and surely not by corporations. Despite being required to pay folks earning the subminimum wage a full minimum wage, wage theft is shockingly common. In fact, low-wage workers (which are servers living off tips, not exceptional cases of super rich servers) are robbed far more often than banks, gas stations, and convenience stores combined — and the perpetrators are *gasp* their own employers. Why? Enforcement is weak and disorganized. According to a new report from EPI, in 2008, the federal government employed only one workplace inspector for every 141,000 workers. That meant the average employer had just a 0.001 percent chance of being investigated in a given year. Once again for good measure: that’s 0.001 percent chance of being investigated in a given year. And low-wage workers most likely cannot pay a lawyer to sue their employer for the wages that are rightfully theirs. Clearly, not enough people know about wage theft so you should all go watch Al-Jazeera’s recent short documentary, “Stolen Wages,” right here.

So let’s extend a huge pat on the back to the restaurant owners that take this law seriously, but it’s extraordinarily irresponsible to merely cite the existence of such a law as a serious counterpoint to raising the tipped minimum wage, in any state.

3. 99.9 percent of RAMW members were against increasing the minimum wage for tipped employees.

Not surprisingly, the local arm of the national lobbying behemoth for Fortune 500 restaurant brands, the National Restaurant Association, claims practically all their members are against raising wages. Okay, fine. But there are plenty of restaurants in D.C. and across the US that have voluntarily instituted living wages and other benefits, like paid sick days, and are succeeding because of their investment in their workers, not despite these policies. To list a few leading the way — Busboys & Poets, Eatonville and Inspire BBQ — all start their employees at 9$ and offer paid sick days. They’re also part of our alternative to the National Restaurant Association, R.A.I.S.E. – Restaurants Advancing Industry Standards in Employment. Recently, Paul Saginaw of Michigan’s Zingerman’s Roadhouse (a restaurant with 600+ employees), publicly spoke out in favor of living wages for restaurant workers, citing his own business model as proof that living wages and profits are not mutually exclusive.

4. “Stunting the great restaurant industry” – According to the Washington Post, “prices would rise noticeably, thanks to the industry’s narrow profit margins. On slower nights, servers and bartenders would be sent home early, meaning some would make less than they do now.”

Alright, refer to our prior response. What we’re calling “high road” restaurants exist, and rocking, which means that livable wages are not an immediate kill shot to the restaurant business model. What’s more, the profit margin for restaurants is on par with that of Walmart’s, which at the very least, should raise some eyebrows. The National Restaurant Association is led by Fortune 500 restaurant companies that have the highest profit margins – and they’re the same force behind rolling back wages and blocking wage increases and raising industry standards. This isn’t theoretical: California, arguably the largest & strongest restaurant economy in the US, doesn’t even have a subminimum wage for tipped employees. In total, there are at least 6 other states that have done away with a subminimum wage for tipped workers. But it is true that raising wages would increase menu prices. In fact, let’s assume that the restaurant passes all the costs associated with a wage increase (as proposed in the Fair Minimum Wage Act) to the consumer – which we did, in our report here – the menu prices would be jacked up by a dime. And as a result, millions of working poor would be lifted from poverty.

If you would like to be more informed about the realities of restaurant work, sign up for our email updates, or just throw us a like on Facebook or Twitter.

Want to take action? Sign the petition to raise the federal tipped minimum wage and/or support the local DC fight here.

Hear from restaurant workers living off tips in our latest campaign video here.

The original Washington Post piece can be found here.

 

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