Vol. 22, No. 5,514 - The American Reporter - September 7, 2016

by Randolph T. Holhut
American Reporter Correspondent
Dummerston, Vt.
June 11, 2015
On Native Ground

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DUMMERSTON, Vt. -- Each and every one of us picks up the tab for underpaid restaurant workers.

The struggles of workers at fast-food restaurants to earn a living wage is well-known to many Americans, but the employees working at full-service restaurants have it just as bad.

The full-service restaurant industry employs more than 4 million people, a figure that is expected to grow by 10 percent by 2022. Yet restaurant workers occupy eight of the 10 lowest paid occupations reported by the federal Bureau of Labor Statistics.

That's why so many people who work in that sector rely on Medicaid for their health insurance, food stamps at home, free or subsidized school lunches so their children can eat properly, housing assistance, and other public programs to make ends meet.

And the owners of the five biggest restaurant chains and their chief lobbyists, the National Restaurant Association (NRA), work to make sure the federal minimum wage stays low for their wait staff - it's been $2.13 per hour since 1991 - forcing them to rely on customer tips to make up the difference.

So, in effect, every time we eat at the big restaurant chains, we subsidize these low-wage workers twice. This travesty was revealed in a report by Restaurant Opportunities Centers United (ROC), entitled "Picking Up the NRA's Tab: The Public Cost of Low Wages in the Full-Service Restaurant Industry."

How bad is it? According to the ROC United report:

  • Nearly half of the families of full-service restaurant workers are enrolled in one or more public assistance programs;

  • The cost of public assistance to families of workers in the full-service restaurant industry is more than $9.4 billion per year;

  • Tipped restaurant workers live in poverty at 2.5 times the rate of the overall workforce;

  • Restaurant workers, as a whole, experience poverty at a rate more than twice that of the overall workforce - 20.9 percent;

  • Large full-service restaurant companies pay their workers so little that nearly 50 percent of their employees rely on taxpayer-funded assistance programs.

According to the report, the biggest player in the full-service sector is Darden, the corporate parent of restaurants such as Olive Garden, Longhorn Steakhouse, and Capital Grille, and the former owner of Red Lobster.

In all, Darden employs more than 150,000 workers and has restaurants in more than 1,500 locations that serve more than 320 million meals per year. Darden is also the leading opponent of workplace reforms, such as paid sick days and increases in the minimum wage.

As such, they are one of the leaders in the National Restaurant Association. They gave nearly $1 million to federal candidates in the 2011-12 election cycle; Darden spends about $1 million a year on lobbyists.

Darden, and the rest of the top five full-service restaurant companies, have helped to ensure that the minimum wage in the United States is not a living wage. In fact, the minimum wage hasn't been a living wage for nearly 50 years.

As a percentage of the national median wage, the United States ranks 27th of the 29 industrialized nations at 37.4 percent of a living wage, ahead of only Mexico and the Czech Republic. By comparison, the minimum wage in Turkey, the country in the top spot, is 59.4 percent of a living wage.

No. 2 on the list is Dine Equity, the corporate parent of IHOP and Applebee's, which operates about 3,600 restaurants employing about 200,000 cooks, busboys, waiters and waitresses. They are also accused of not paying minimum wage rates for untipped work.

Last year, in fact, a group of former employees of one of Applebee's franchise operators received a $2.7 million settlement over this issue - and more class-action suits are pending.

No. 3 is Blooming Brands, the corporate parent of Outback Steakhouse and Carraba's Italian Grill, has 1,510 locations in the U.S. and 21 other countries. They too are accused of shorting their workers, and face a class-action suit involving about 100,000 workers. That case is in Federal court, and it alleges that Outback improperly required unpaid, "off-the-clock" labor from their employees.

At No. 4 is Brinker International, which is the parent of Chili's Grill & Bar; No. 5 is Cracker Barrel. Both are facing lawsuits that allege the company improperly denied overtime pay to employees.

Instead, these five companies work hard to keep down wages for their workers, and have collectively spent almost $11 million since 2011 on lobbying and campaign contributions to federal candidates. Everyone would be better served (no pun intended) if that money found its way to their hard-working wait staff.

These companies also pay their CEOs well - an average of about $5.6 million a year. But they also expect taxpayers to pick up the tab of the social welfare programs that keep their workers from the jaws of abject poverty.

The report from ROC United, an organization devoted to improving working conditions for restaurant workers, is just another illustration of what economic inequality in America looks and feels like. For millions, it is no abstraction.

That's why ROC United is pushing for what it calls the "One Fair Wage," which would eliminate the sub-minimum wage for tipped workers and raise the minimum wage for all workers.

If you work, you shouldn't live in poverty. It's that simple.

And, as a diner, you should support restaurants that do right by their workers, and shun the ones that don't.

AR's Chief of Correspondents, Randolph T. Holhut, holds an M.P.A .from the Kennedy School of Government at Harvard University and is an award-winning journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at randyholhut@yahoo.com.

Copyright 2016 Joe Shea The American Reporter. All Rights Reserved.

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