Making $2.13 an Hour and the Boss Skims Tips? How We
Can Fight Exploitation in Restaurants

By Erik Loomis
AlterNet
March 21, 2012

http://www.alternet.org/story/154565/

Two weeks ago, a story about a wealthy California
business executive leaving a 1 percent tip on a $133
lunch bill went viral on the Internet. Supposedly, the
banker wrote "Get a real job" on the receipt as a
smarmy reinforcement of his own status as a member of
the 1 percent and as a put-down of the Occupy movement.

The restaurant in question quickly provided evidence
that the damning receipt was Photoshopped. But it
spread like wildfire because a rich businessman
treating a waiter like garbage sounded true to many
people. In recent months, the poor treatment of
restaurant labor has received increased media
attention. People inundate comment sections on blog
posts and news stories about restaurants, sharing their
own horror stories.

Restaurant labor is classified differently than any
other form of work in the United States. Unlike most
jobs, where a base wage provides the majority of one's
income, federal law allows restaurants to pay as little
as $2.13 an hour to waiters, forcing workers to hustle
to supplement their meager wages. Regulations do
require restaurants to match the minimum wage if the
tips do not cover it. But owners often ignore the law
as many workers either do not know the law or have no
idea how to enforce it.

Tipping catches workers between customer whims and
employer exploitation. Tipping standards vary widely
depending on the clientele; how many times have we
eaten at restaurants and debated how much to leave as a
tip? Mom wants to leave 10 percent, you argue for 20
percent. Some waitstaff do very well with tips. Workers
at higher-end restaurants can bring home hundreds of
dollars an evening in cash. The tipping system also has
benefits for undocumented labor. Often unable to open a
bank account because they lack a Social Security
number, undocumented workers in restaurants will not
even cash their minuscule checks and rely on tips for
survival.

But the tipped minimum wage exploits many restaurant
workers. Florida lawmakers recently defeated a bill
proposed by the Florida Restaurant and Lodging
Association that would have reduced waitstaff's hourly
wages from the Florida minimum of $4.65 an hour to the
federal minimum. Moreover, management at high- and low-
end establishments often takes money out of workers'
pockets by skimming from the tips. A 2008 court case
forced Starbucks to repay $105 million to workers
forced to pass their tips up the corporate chain. New
York celebrity chef Mario Batali just agreed to pay
$5.25 million to workers at his restaurants after they
sued, claiming that management took millions in tips
from their pockets over the years.

Some states are moving toward better protection for
restaurant and other service labor. Rhode Island state
legislator Christopher Blazejewski has introduced a
bill that would ban restaurants, hotels and other
establishments from requiring workers to share
automatic gratuities with management. Customers believe
these fees are going to workers in lieu of tips; the
bill would force restaurants to delineate precisely
where the service fees go so that workers can have the
opportunity to earn an appropriate tip.

Workers themselves are also fighting for their rights.
Restaurants Opportunity Centers United is a nonprofit
worker center organizing restaurant labor with locals
in eight American cities. ROC organizes around a large
number of issues, including sexism and racism within
the restaurant industry, acquiring paid sick days for
workers, and raising the tipped minimum wage.

Meghana Reddy of ROC-United explained to me that the
organization originated to represent the surviving
workers of Windows on the World, the restaurant at the
top of the World Trade Center, where 80 workers lost
their lives during the September 11, 2001 attacks.
These mostly immigrant workers needed help navigating
the federal aid bureaucracy. Building off this
experience, ROC began advocating for restaurant
workers' rights, particularly over the tipped minimum
wage. After a decade, workers have achieved important
gains. ROC-Philadelphia recently successfully lobbied
for a city ordinance to stop employers from taking
credit card fees out of tips. At present, ROC-United is
lobbying for the WAGES Act, a bill sponsored by Rep.
Donna Edwards (D-MD) that would raise the tipped
minimum wage to $5.50 an hour. It is also protesting
the Darden Restaurant Group, a corporation that owns
popular chain restaurants such as Capital Grille, Olive
Garden and Red Lobster for taking tips from workers and
making tipped workers do untipped labor at the tipped
minimum wage.

A more radical alternative to tipping is banning the
practice altogether. I recently visited the Black Star
Co-op in Austin, Texas. The first cooperatively owned
and worker-managed microbrewery/restaurant in the
United States, Black Star combines the cooperative
business model of the 1970s organic food market with
the products and services that people want today. After
a very good beer and some delicious kimchi fries, I
went up to pay the bill. I asked the bartender where I
should leave the tip. He proceeded to give me a lecture
about how they don't accept tips because they get paid
a living wage.

I also talked to Dana Curtis, a former labor organizer
for the Communication Workers of America who now works
at Black Star. She called it true "workplace
democracy," noting that working for a cooperative gives
a "sense of agency with your job." Black Star starts
workers at $13.50 an hour plus benefits, which works
out to three times the rent for a one-bedroom apartment
in Austin. Curtis admitted that many restaurant staff
can make more than this with tips at higher-end places,
but that the workplace democracy attracts highly
experienced labor. Moreover, the co-op bylaws state
that the highest paid employee can make no more than
twice the lowest paid worker. Workers at Black Star are
effectively self-managed, electing team leaders with a
board-staff liaison, also elected by the workers, that
communicates between themselves and the board of
directors. Workers can also hold up to three spots on
the nine-person board; currently two workers sit on the
board.

Were real labor disputes to take place at Black Star,
it is hard to say how effective the worker
representation would prove. But it certainly provides a
better model of labor practices than most restaurants.
Ideally, Black Star could spur more communities to open
restaurants that combine a cooperative business model
with quality food and living wages for workers. That is
happening in Grand Rapids, Michigan, where Black Star
serves as the model for the soon-to-open High Five
Brewery.

Even in a best-case scenario a cooperative model of
labor will create relatively few restaurant jobs. We
need labor law reforms to bring restaurant wages up to
respectable levels. Tipping will probably never end,
both because it is so ingrained in American culture and
because people like to leave money for good service.
But at the very least, we should move to ensure that
tipping does not provide another way for employers to
exploit workers. The first step is to raise the tipped
minimum wage to the federal minimum wage. Second,
customers need clarity on where precisely their tips or
service fees go. Customers want their tips to go to
workers' pockets, not to the managers and up the
corporate food chain. Third, the nation needs a strong
regulatory agency dedicated to ensuring restaurant
owners follow the law with significant fines for
violations.

Clearly, as individuals we need to tip generously
wherever the practice is accepted. Tipping may have its
exploitative side, but refusing to tip would make the
diner another exploiter of labor. We need legal and
institutional changes to dining labor, not customer
opt-outs.
_______________

Erik Loomis is a professor of labor and environmental
history and a blogger at Lawyers, Guns and Money.

c 2012 Independent Media Institute. All rights
reserved.

___________________________________________

Portside aims to provide material of interest to people
on the left that will help them to interpret the world
and to change it.

Submit via email: [log in to unmask]

Submit via the Web: http://portside.org/submittous3

Frequently asked questions: http://portside.org/faq

Sub/Unsub: http://portside.org/subscribe-and-unsubscribe

Search Portside archives: http://portside.org/archive

Contribute to Portside: https://portside.org/donate