CounterSpin interview with Saru Jayaraman on the lower wage for tipped workers
Janine Jackson interviewed Saru Jayaraman about the issues of tipped workers for the November 27 CounterSpin. This is a lightly edited transcript.
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Janine Jackson: “The truth of the matter is this is a big deal,” says Simon King, the general manager of The Modern, a high-end restaurant attached to the Museum of Modern Art in Manhattan. He is referring to the decision by Danny Meyer, owner of The Modern and many other restaurants, to phase out what the New York Times called “the time-honored American practice” of tipping.
That such a time-honored practice is now being challenged has a lot to do with our guest and her work. Saru Jayaraman is the co-founder and co-director of the Restaurant Opportunities Centers United and director of the Food Labor Research Center at the University of California, Berkeley. She’s author of the book Behind the Kitchen Door and the upcoming Forked: A New Standard for American Dining. She joins us now by phone from California. Welcome to CounterSpin, Saru Jayaraman.
Saru Jayaraman: Thank you, great to be here.
JJ: Tipping, and the tipped wage, is not the only issue facing restaurant workers, but let’s start there. What do you think people don’t understand about the way that practice works and its impact on workers?
SJ: I think most people know almost nothing at all about this issue, including legislators in the highest levels of office. We’ve had to do a lot of education with people on the issue, and I’ll say even me myself, until about ten years ago, really beginning to work in this industry and with workers across the country, knew very little.
I think the big thing people should know is that it is the second-largest and fastest-growing sector of our economy, but pays the absolute lowest wages in the country. And that is due to the money, power and influence of a trade lobby called the National Restaurant Association, which leads the Fortune 500 restaurant chains in our country, and whose power dates back over 100 years to the emancipation of the slaves, when they essentially first fought for the right to not pay workers anything–especially former slaves, who were the first tipped workers in our country–not pay them anything and let them live on customer tips.
And there’s just such a great deal of misinformation about who those workers are today, even. There’s such a misperception, that the Restaurant Association likes to promote, that these are very well-paid tipped workers, white guys working in fancy fine-dining restaurants, when in fact the vast majority of tipped workers in America, 70 percent in fact, are women who work at IHOP and Applebee’s and Olive Garden, and earn a median wage of $9 an hour including tips, and suffer from three times the poverty rate of the rest of the US workforce, and the highest rates of sexual harassment of any industry in the United States, because they are forced to live in large part on tips rather than receiving a wage from their employer.
JJ: Well, some of the defenses of tipping that are being brought out now really reflect that kind of feudal attitude. Richard Cohen at the Washington Post writes, “I like to reward but occasionally I like to punish.” And it really gets at something, I think, at kind of the baseline. And hearing you say the origins really are that it comes from that attitude, that people really should serve at your pleasure.
SJ: That’s right, and let me be clear, and what I really appreciate about your show and program is really clearing up what maybe other media sources have conflated. Our fight, our campaign, is not actually at this minute to eliminate tipping altogether; that’s a huge misconception. We are trying to eliminate the lower wage for tipped workers, which this industry has gotten away with for over 100 years.
The true history is that tipping originated in Europe; when it came to the United States in the late 1850s, there was a massive anti-tipping movement so great that five states passed bans on tipping. And two industries, the restaurant industry and the Pullman train company, squashed that movement, and demanded the right to hire newly freed slaves and not pay them anything and let them live on customer tips.
And that idea, that the restaurant industry in particular could not pay its workers a wage and let them live on customer tips, was codified in the very first minimum wage law, as part of the New Deal, which gave tipped workers the right to a zero dollar minimum wage. And we’ve gone from zero dollars in 1938 to a whopping $2.13 an hour, which is the federal minimum wage for tipped workers in our country.
Now, there are seven states that have completely eliminated that system and demand that the restaurant industry actually pay its workers a full wage and let tips be on top of that: California, Oregon, Washington, Nevada, Minnesota, Montana and Alaska all demand that the restaurant industry pay a full wage and let tips be on top. Our campaign, our effort has been to eliminate that lower wage for tipped workers, that two-tiered system that’s essentially legalized gender pay inequity, because it’s mostly women living on the lower wage. Our fight is to eliminate that lower wage for tipped workers everywhere across the country, not at this minute to eliminate tipping.
There are restaurants that have chosen to follow our lead and eliminate the lower wage for tipped workers in their restaurants by eliminating tipping. And if they are doing it in a transparent way that makes their workers whole, then we are fully in support of that. But right now, we feel that as long as we are talking about minimum wages in this country of $10, $12 and $15 an hour, that’s actually not enough to live on anywhere in this country, and so tips are absolutely necessary at this moment, on top of a wage, to get workers closer to something livable.
But what we don’t want is what we have right now, which is that those tips can be counted against wages, so that in essence most workers in this industry in this country are living almost entirely on customer power, on that power to punish or reward, rather than on a base wage from their employer, like every other industry has to provide.
JJ: Well, let me ask you as a point of information, because when outlets like the New York Times and USA Today print articles about the tipped wage, as a matter of course they get a letter from a representative of the National Restaurant Association that says, no one gets a sub-minimum wage because if waitstaff don’t get enough from tips plus that $2.13 an hour to get up to minimum wage, the employer tops it off. Now is that the law, but not the case?
SJ: That’s exactly not the case. The US Department of Labor reports an 80 percent–80 percent–violation rate with regard to this issue of employers having to make up the difference hour by hour, and ensure that tips bring you to the full minimum wage. I feel for employers; it’s an extraordinary burden to have to ensure, hour by hour–it takes a lot of accounting and HR which most small businesses don’t have. It’s a tremendous burden on small business, and I will say this is actually partly why so many employers have started to move in our direction, why we’re seeing so much industry shift on this issue, because even some employer-side attorneys have come out saying this is a tremendous liability and burden on small businesses in particular, that have to calculate this difference or get sued. So it doesn’t happen; it’s a huge liability.
But really, fundamentally, on top of that, I want to say that even if there was 100 percent compliance on this issue, which there obviously isn’t, it still wouldn’t work. Because when you are a woman who lives off tips for the majority of your income, as 6 million women in America do, you have to tolerate whatever a customer might do to you, however they may touch you or treat you or talk to you, because the customer is always right, because the customer is paying all of your income, truly, because your wage is so low–if you get $2, $3 or $4 an hour as it is in 43 states, your wage is so low it goes entirely to taxes, and you’re living completely off your tips. So if you are living completely off your tips, you are completely dependent on the whims of the customer and you have to tolerate this kind of behavior.
And our research shows it goes a step further; we found that management in states with lower wages for tipped workers encourages women to objectify themselves, wear tighter clothing, show greater cleavage in order to get more money in tips at three times the rate as they do in states like California, where a woman actually gets a full wage and doesn’t have to rely on the whims of a customer.
I mean, that absurd comment by the Washington Post reporter–in any other industry, any other service profession that we interact with daily, from retail to getting gas, anything where we interact with customer service, if we’re not pleased with service, we have the right to go to management and complain, and that is how it should be in this industry, too. We have the right to go to management and complain. But a woman’s ability to pay her bills, and not have to sell her body, and feed her family should not be dependent on the whims of customers. It should be dependent on her employer who supposedly employs her and has the responsibility to ensure that she is actually paid for the work that she does.
JJ: Practices, as you have indicated, differ from state to state; there’s some variation here and some employ, I think you sort of referred to it, what they call a “tip credit.” What is going on there? What is a “tip credit”?
SJ: It’s a horrible misnomer, really; some of our friends like to call it a tip penalty, because it’s really a penalty on the worker. Essentially what some people call a tip credit is an employer’s ability to discount a worker’s wage so then they ultimately only have to pay them as little as $2.13 an hour; they can say that because you are getting tips, I’m going to take this out of your wage so that I don’t have to pay you a full wage. I can pay you as little as $2.13, and the remainder will be made up in tips. That essentially is what a tip credit or tip penalty is.
In my first book, Behind the Kitchen Door, I had a story of a young woman who worked at the IHOP in Houston, Texas. Now, IHOP is a multimillion dollar corporation, should be able to figure this out, but when she started working at the IHOP in Houston, Texas, the manager told her, “I don’t want to have to be held liable to ensure that tips make up the difference for every hour, so I’m going to report that you are making the full minimum wage of a whopping $7.25 an hour whether [or not] you actually do. I don’t care what you make in tips, that’s what I’m going to report.”
Which means that she is taxed on $7.25 even for those hours, and there are many of them in an IHOP, where nobody walks in the door; it’s a graveyard shift or it’s very slow, it’s open all night, right? There are many times when she is folding napkins or filling honey bottles or syrup bottles and not getting anything in tips, earning $2.13, which goes completely to taxes, ’cause she’s being taxed as if she’s earning $7.25 for every hour that she works.
JJ: Well, as we discussed with economist Holly Sklar last week in talking about the minimum wage generally, livable wages aren’t just a matter of human decency or economic security for individuals, but also for society as a whole, right?
SJ: That’s absolutely right. Not just for society as a whole, but for this very industry itself. I mean, what’s really sad is that over the last couple of years of economic crisis, our industry has grown, but the way it has grown has reflected growing income inequality in our country, in that the fine dining restaurants are booming, fast food is booming, and that middle segment where a lot of America takes their family to eat, the Olive Gardens, Chili’s, that segment has not been growing; it’s actually been stagnating in comparison to the other segments of the industry, which is a direct reflection of how this industry pays its own workers, because this is the largest industry in America. The ability of these workers to actually afford to eat out is what sustains this industry itself, and so paying these workers a better wage would come right back into the industry itself; they would see that direct result if they would actually invest in workers’ ability to survive and live and eat out like the rest of us.
JJ: You’ve talked about what you call the Jim Crow in US restaurants, that has to do with gender and race stratification. I mean, the truth is if you’ve gone to a very expensive restaurant, some folks will notice, “Hey, all the people serving me are white men.” There is a gender and race element to this that is quite strong. You’ve talked a lot about the gender, but there are racial elements as well.
SJ: Absolutely; people of color and women of color get segregated into lower-level segments of the industry, and lower-tipping occupations and lower-paid occupations. You will see people of color in casual restaurants and fast food restaurants; if they’re in fine dining, you’ll see them in what we call the back of the house, the kitchen, or in lower-tipped positions, like a busser or a runner who often earns one-fifth of the tips that a server will make.
And so when the industry says nobody actually earns $2.13 an hour, these are well-paid tipped workers, well, there is a segment of the population for whom that’s true; there are these wealthy white servers, I won’t even say wealthy actually, I’ll say better-paid white servers who are in fine-dining restaurants. And they should be paid a livable wage, they should be remunerated for the professional work that they do, as this is a profession, this is a skilled profession, as it’s recognized to be in other countries.
But a big part of the problem is that people of color are not able to get to those livable wages as bartenders, fine-dining positions. Those jobs are not accessible to the vast majority of workers in this industry. So we need to do two things. We need to lift the floor by eliminating the lower wage for tipped workers and raising the wage overall for everybody, and we need to build the ladder — so that while we are lifting the floor, we also create better ability for workers to move into continuously higher-paying positions, especially fine-dining server and bartending positions, which can be family-supporting jobs.
JJ: Right, everyone knows somebody who makes a great living off tips, but the point is that people are not equally situated…
SJ: Most people don’t have access to that.
JJ: The tipped wages are coming to the forefront, but there are other issues that you work on with the Restaurant Opportunities Centers. What are some of the other preeminent things you think are important to know about the fight?
JS: There are three key issues that workers continuously bring up. We’ve surveyed at this point over 6,000 workers nationwide, and the same things keep emerging everywhere. The top, of course, is poverty wages, and the tipped minimum wage; the second is this issue of mobility that you’ve already touched upon, and so we’ve really been looking at the issue of racial segregation and gender segregation in our industry.
We’ve done what’s called matched pair audit tests, where we send hundreds of pairs of white and people of color applicants into fine-dining restaurants to see who gets hired. We’ve found that white applicants have twice the chance over a person of color, even when the person of color has a better resume, of getting one of these fine-dining positions. So we really need to be looking at the kind of training programs we provide to allow workers of color to get into fine-dining service positions; we need to be looking at policy that incentivizes employers to really promote from within and desegregate their restaurants. So that’s the second big issue.
And the third is access to benefits. So, lack of paid sick days, 90 percent of paid workers in this industry don’t have a single earned sick day, which means they can’t take a day off when they’re sick, not just because they can’t afford it, but often because they will be penalized or fired for taking a day off when they’re sick, which has tremendous public health implications for all of us as consumers.
Also the lack of access to healthcare, even post-healthcare reform in this country. Our industry really led the effort to form a club called the 29ers, I don’t know if you or your listeners have heard about this, but Denny’s and many other Darden–which is Olive Garden, Capital Grill Steakhouse, formed a kind of association of companies that committed to basically reduce all of their workers’ hours to 29, one less than 30, so that they wouldn’t be eligible to participate in exchanges or be part of healthcare reform.
So many of our workers at this moment are falling through the cracks, perhaps because they are immigrants and can’t get access to healthcare reform, perhaps for other reasons. So there is still a tremendous lack of healthcare for our people, and both the lack of paid sick days and the lack of healthcare has really horrendous consequences for our public health as consumers.
JJ: Let me just ask you, finally, is there something you’d like to see more of or less of in terms of media coverage of this set of issues?
SJ: Yeah; I really appreciate that question. I really hope that the media can cover this issue of tipping in a more nuanced way that really understands that the first step has to be eliminating the lower wage for tipped workers, and that has to be the focus. I think talking about tipping more broadly is sexy and people like to talk about it, but when people are living on, literally, slave wages of $2.13 an hour, and that it is an actual legacy of slavery, we need to as a nation first demand that this industry eliminate this legacy of slavery, and then we can talk about the elimination of tipping, we can support restaurants moving in this direction, however they’re doing it.
I really hope that the media really can make that distinction between those two issues, and in supporting restaurants and profiling restaurants that are moving in this direction, really highlight those that are doing it right, like Danny Meyer who did it in a very transparent way, and is committed to ensuring that without tips, his workers are going to make the same in wages as they would have made in tips. That is what we would want to see of anybody following.
So we know a lot of restaurants are going to jump on this bandwagon of eliminating tipping, and if we all understand that the most important thing is what our workers are actually being paid, then it shouldn’t be about tips or no tips; it should be about determining what is a restaurant actually paying their workers.
JJ: We’ve been speaking with Saru Jayaraman of the Restaurant Opportunities Centers United and the Food and Labor Research Center at the University of California, Berkeley. Her upcoming book is Forked: A New Standard for American Dining. Saru Jayaraman, thank you so much for joining us this week on CounterSpin.
SJ: Thank you.