The Only Industry Allowed to Gouge Its Workers

I love going out to eat. I love experiencing new meals and returning to tried-and-true favorites. Given the growing number who regularly eat out, I’d say most of America feels the same way.

Until recently I shared something else with most of America: for all the hundreds of restaurant meals I had eaten, I knew nothing about the people who cooked, prepared, and served the food. I didn’t know how the meals were sourced, how the restaurant was run, what happened to the tips I left, and so much more. Of all those hundreds of meals, I can describe only one person who touched my food. For most of us, these people are invisible—and purposefully so.

The restaurant industry fought Congress to freeze hourly wages for servers at $2.13. That’s where it remains. In essence, the industry is saying it doesn’t have to pay its workers. Consumers do.

This changed for me on September 11, 2001. On that day, 73 workers died in Windows on the World, the restaurant at the top of the World Trade Center. In the months following that tragedy, 13,000 restaurant workers lost their jobs. The hotel and restaurant employees’ union, called UNITE HERE, had represented workers at Windows on the World—a rarity, considering less than .01 percent of our nation’s restaurant workers are unionized. The union called me and Fekkak Mamdouh, a waiter who survived the tragedy, to start a relief center for displaced workers. What began as a tiny relief effort has grown into a national restaurant workers’ organization with more than 10,000 members in 32 cities. It’s called the Restaurant Opportunities Center (ROC).

ROC has grown quickly due to overwhelming demand for change. The restaurant industry is one of the fastest-growing segments of the U.S. economy, growing even during the economic crisis of the last several years. Right now, there are more than 10 million restaurant workers—one in 12 workers in this country is employed by a restaurant.

However, the industry is also the lowest-paying employers. According to the U.S. Department of Labor, seven of the 11 lowest-paying jobs—including the two absolute lowest-paying jobs—are in restaurants. The industry also has the largest number earning the minimum wage or less.

Why is the one of the largest and fastest-growing private sector employers the absolute lowest-paying employer in the United States? The abysmally low wages and poor working conditions in can be traced back to the money, power, and influence of the National Restaurant Association. It has been one of the most vocal lobbying groups battling against increasing the minimum wage for all workers at the local, state, and federal level over the last several decades.

In 1996, under the leadership of Herman Cain (who later ran for president), the lobby struck a deal with lawmakers. It would not oppose a modest increase to the overall minimum wage as long as the minimum wage for tipped workers stayed frozen $2.13 an hour.

That is where it has remained.

The result? Tipped workers—who are 70 percent female and mostly servers—suffer from three times the poverty rate and use food stamps at double the rate of the rest of the workforce. The women and men who serve our food cannot afford to serve their own families. With wages in most states of as little as $2 an hour, they live entirely off tips, once you factor in taxes.

I didn’t know (and have since found that most Americans do not know) that the tip I was leaving every time I ate out was not on top of a wage—it was the wage itself. The restaurant lobby has essentially found a way to send the following message if only America would hear it:

“We shouldn’t have to pay our workers’ wages,” it has said.

“Our customers should pay their wages for us.”


Saru Jayaraman is the Co-Founder and Co-Director of the Restaurant Opportunities Centers United (ROC United), Director of the Food Labor Research Center at University of California, Berkeley. She authored Behind the Kitchen Door, a groundbreaking exploration of the political, economic, and moral implications of dining out.