Report: Restaurant wages hinder making ends meet

Oscar Serrano of Tequilas, where managers can get health insurance. The sector "provides both an opportunity and a threat to the economy," the industry report says.
Oscar Serrano of Tequilas, where managers can get health insurance. The sector "provides both an opportunity and a threat to the economy," the industry report says.
Posted: October 12, 2012

Food server Victoria Bruton, 40, worked in Philadelphia restaurants most of her life where, she said, "I served people, but I couldn't afford to eat where I worked."

Work was available, she said, although not lucrative. Her hourly pay maxed out at $2.83, the minimum wage required by law for employees who receive tips.

Ninety percent of Bruton's income came from tips, but the amount varied so widely that she could never rely on them to finance a mortgage. With home ownership out of reach, she and her two children lived with her parents. She couldn't afford retirement savings or a car: "I couldn't pay for the gas."

Bruton's income from waitressing was so low that she and her children qualified for food stamps and government-sponsored health insurance.

"It was a struggle trying to make ends meet," she said.

Two out of three restaurant workers in Philadelphia would not be able to support a family of three on their wages, according to a study of the city's restaurant industry released Wednesday. A trade group immediately took issue with the report.

"Philadelphia restaurant workers are worse off than they were a decade ago," noted the report, titled "Behind the Kitchen Door: The Hidden Reality of Philadelphia's Thriving Restaurant Industry."

Employees also face rampant discrimination, wage theft, and unsafe working conditions, the report said.

Commissioned by the Restaurant Opportunities Center of Philadelphia, a nonunion worker-advocacy group, and the Philadelphia Restaurant Industry Coalition, the study was based on analysis of government data, interviews with 33 workers and 30 restaurant owners or managers, and more than 500 surveys.

"I think it's unfair to present these studies as if they were scientific," objected Patrick Conway, chief executive of the Pennsylvania Restaurant and Lodging Association, a trade group.

Conway said those interviewed were hand-selected with a particular point of view in mind.

"They paint [the restaurant industry] as one that's evil," he said, adding that the industry has always been one with flexible hours and a mostly part-time staff typically not covered by sick-pay policies.

The business provides opportunities. Dishwashers can become managers. "Many become owners of their own restaurants," he said.

In the last 10 years, restaurant employment grew faster than most employment in the city of Philadelphia, yet wages declined in comparison, according to the report, released at a news conference at Tequilas restaurant at 16th and Locust Streets in Center City.

The report cited U.S. Labor Department statistics showing that annual restaurant wages decreased 11 percent, from $20,705 in 2001 to $18,486 in 2011, while private-sector wages overall rose 8 percent during the same period.

"The restaurant industry provides both an opportunity and a threat to the economy," the report said.

"On the one hand, this industry can provide jobs to millions." But its low wages prolong economic stagnation since its workers don't have enough money to be avid consumers, the report said.

Restaurant workers rarely have health insurance and often work sick because many restaurants do not provide sick pay, the report said.

Even Tequilas, heralded as a "high-road" employer by the study's sponsors, for its higher wages and diverse staff, does not routinely offer health insurance or sick pay.

Sick pay is available to longtime employees who have proved themselves reliable, said manager Oscar Serrano.

Managers can receive health insurance, and, he said, Tequilas' parent company heavily supports Puentes de Salud, a Philadelphia medical clinic where restaurant workers can receive free care.

The report said one in four workers noted that they had done something due to time pressure that might have harmed the health and safety of customers and that more than half had been injured on the job.

Forty percent of those surveyed for the report complained that they were forced to work off the clock without pay, and 57.9 percent said they had not been paid overtime after working more than 40 hours in a week.

Also, the report said, there is rampant discrimination, with higher-paying waitstaff and bartending jobs usually held by whites, usually males, with lower-paid kitchen jobs held by minorities, particularly Latinos and Asians.

The report recommended that policymakers raise the minimum wage and the minimum tipped wage and that they support sick-day laws.

To reduce the industry's high turnover rates, employers should raise wages and benefits, provide sick pay, and improve employees' work situation by scheduling further in advance to allow planning, the report said.

The Restaurant Opportunities Center of Philadelphia is part of a national organization, Restaurant Opportunities Centers United. The Philadelphia Restaurant Industry Coalition includes advocacy groups for workers, immigrants, and women.

The report was researched by the Keystone Research Center in Harrisburg, a nonprofit organization funded by unions and advocacy groups.

The Ford Foundation, the Rockefeller Family Fund, and others paid for the study.


Contact Jane M. Von Bergen

at jvonbergen@phillynews.com or 215-854-2769, or follow

on Twitter @JaneVonBergen.

Read her workplace blog

at www.philly.com/jobbing .

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