Restaurant Sales Now Surpass Grocery Sales – but Restaurant Workers Are Paid Peanuts

Nearly 11 million workers work in the restaurant industry, which “is one of the fastest growing sectors of the US economy,” according to the Restaurant Opportunities Center (ROC) United’s report on racial and gender segregation in the restaurant industry, which was released last week. Restaurant sales exceeded grocery sales for the first time in March 2015. In other words, these days, more people are spending more money eating out than cooking at home.

However, the restaurant industry’s growth has not translated into better pay for its workers. Seven of the ten lowest-paying jobs in the US are in the food industry, according to the Department of Labor’s numbers. Median hourly wage for restaurant workers, including tips, is $10.00, “compared with $18.00 outside of the restaurant industry,” according to the Economic Policy Institute (EPI). Unionized restaurant workers received significantly higher wages, but unionization numbers are very low in the food industry.

“The largest restaurant industry occupation is waiter/waitress, which makes up nearly a quarter (23.3 percent) of all restaurant jobs, and has a typical wage, including tips, of $10.15 an hour,” EPI states. “The lowest-paid occupation is cashiers/counter attendants, at $8.23 an hour, while the highest paid are managers, at a typical wage of $15.42 per hour – which is still lower than the overall median wage outside the restaurant industry.”

Restaurant workers also experience high levels of poverty. “One in six restaurant workers, or 16.7 percent, live below the official poverty line,” according to EPI. Workers outside the restaurant industry face a poverty rate of 6.3 percent.

The ROC report mentions that “workers of color experience poverty at nearly twice the rate of white restaurant workers.” ROC also notes that nearly 20 percent of restaurant jobs “provide livable-wages, and fine-dining servers and bartenders in cities like San Francisco and Oakland can earn between $50,000 and $150,000 per year.” However, “those jobs are almost held exclusively by white people, and in many cases, white men,” Saru Jayaraman, ROC co-director and co-founder, explained to the audience at the report’s release event.

In addition to experiencing poverty and low wages, restaurant workers receive very few benefits. According to EPI, “Just 14.4 percent of restaurant workers receive health insurance from their employer, compared with roughly half (48.7 percent) of other workers.” Meanwhile, 41.9 percent of unionized restaurant workers receive health insurance. Only 8.4 percent of restaurant workers have a pension plan through their job, compared to 41.8 percent outside the food industry. “Of unionized restaurant workers, 31.6 percent are covered by a pension plan,” notes EPI.

In 2012, Oakland ranked number five in the New York Times list of “The 45 Places to Go in 2012,” and its restaurants were particularly highlighted. The Times boasts that “the city’s ever more sophisticated restaurants are now being joined by upscale cocktail bars, turning once-gritty Oakland into an increasingly appealing place to be after dark.”

However, the fruits of these “appealing” establishments are ending up in the hands of the few. At the release of the ROC report, Jayaraman commented that Oakland “really is the epitome of what we’re seeing of this industry nationally – in that we are not yet seeing communities of color, low-income people, immigrants, certainly people with any kind of [criminal] record getting access to those great fine-dining and bartending positions in those wonderful new restaurants opening up in Uptown.”

Breaking down the numbers

To analyze racial and gender segregation in the restaurant industry, the ROC report distinguishes between “Front-of-the-House” versus “Back-of-the-House” positions, and “Tier I” and “Tier II” positions. In restaurant industry parlance, Front-of-the-House workers interact “with guest in the front of the restaurant”, such as “hosts, waitstaff, bussers and runners.” Back-of-the-House positions, on the other hand, are largely kitchen staff who are in the back of the restaurant, such as “chefs, cooks, food preparation staff, dishwashers, and cleaners.”

Tier I and Tier II refer to levels of pay in both Front-of-the-House and Back-of-the-House. Tier I are higher-paid positions, while Tier II are lower-paid jobs. According to the report, “Front-of-the-House occupations in Tier I include the maître d’, supervisors, hosts, bartenders, and servers, while Back-of-the-House occupations in Tier I include executive chefs, sous chefs, and line cooks.” Front-of-the-House jobs in Tier II include “bussers, runners, and baristas, while in Back-of-the-House this includes prep-cooks, dishwashers, and porters.”

Racial and gender disparities in restaurant wages are widespread, according to the report. Both nationally and in California, women – who make up 52 percent of the national restaurant workforce – predominantly work in Front-of-the-House positions. Women constitute 64 percent of restaurants workers in Front-of-the-House positions nationally and 60 percent in California. Yet, women are paid less than men in those positions. Average wage for women in Front-of-the-House jobs is $9.81 an hour; for Back-of-the-House jobs it’s $9.51. Men, on the other hand, get an average wage of $12.95 an hour in Front-of-the-House positions and $10.81 in Back-of-the-House jobs. According to the report, “this differential can be attributed to the fact that women are more likely to work as servers in the casual restaurants that make up the majority of full service restaurants in America, where wages and tips are far less than in fine-dining restaurants. Our previous canvass of fine-dining restaurants found that men held 57% of observed fine-dining server positions, com- pared to only 43% of women.”

In Tier positions, it’s the same story. Women are predominantly – 61 percent – in Tier I positions, while men occupy more than half – 56 percent – of Tier II positions. Yet, women in Tier I positions make, on average, $10.10 an hour compared to $14.03 for men; in Tier II, the average wage for women is $9.25 an hour compared to $10.28 for men. The report states, “These patterns show that, despite women being disproportionately employed in Tier I and Front-of-the-House occupations, they are paid substantially less, but that these inequalities are more pronounced in the higher paid and more visible occupations in the industry.”

Racial inequities are also apparent. Nationally, white workers – who are 55 percent of the restaurant workforce – predominantly occupy Front-of-the-House jobs at 60 percent and Tier I positions at 64 percent. Latino workers, who are 25 percent of the national restaurant workforce, constitute 34 percent of Back-of-the-House jobs and 32 percent of Tier II positions. In terms of wages, the most stark discrepancies were between white and Black workers. On average, Black restaurant workers make $10.11 an hour versus $10.89 an hour for white workers.

The ROC report does not include numbers on wages for Black workers in California in particular, but it does track Latinos, Asians, and whites. Latino workers are heavily concentrated in Back-of-the-House and Tier II positions, at 65 percent and 66 percent respectively. Average wage for Latino workers in Front-of-the-House positions is $10.58 an hour and $10.16 for Back-of-the-House jobs. Whites in the same positions, on average, make $12.85 an hour and $11.28 an hour respectively. Latinos in Tier I jobs make $11.62 an hour and $9.69 in Tier II compared to $13.45 and $10.25, respectively, for whites.

Asian restaurant workers generally had higher wages, nationally and in California. However, the report does not break down within the Asian community. East Asians – Chinese, Japanese, etc. – tend to be more well-off, while Southeast Asians – Hmong, Cambodian, Vietnamese, etc. – are typically less well-off and working-class.

The report also looks at how race and gender inequality intersect in the restaurant industry. It found that “the situation is most dire for both white women and women of color, who face the highest levels of segregation and the lowest wages.” Nationally, at 31 percent, white women are represented the most in the restaurant industry’s workforce and are highly concentrated in Front-of-the-House – 40 percent – and Tier I – 42 percent – positions. Yet, white women have the lowest average wages, even compared to women of color. On average, white women make $9.69 an hour compared to $9.83 an hour for women of color and $12.45 an hour for white men. The report said this “might be explained in part by the over-representation of white women in rural and suburban places where wages are lower.”

In California, women of color have it particularly bad. At an average wage of $10.13 an hour, women of color make the least, regardless if they’re in Front-of-the-House (at $10.21 an hour) or Back-of-the-House (at $9.92 an hour) positions. As for men of color, even though they are 38 percent of California’s restaurant workforce, they comprise 58 percent of Back-of-the-House positions.

Altogether, the report’s numbers reveal that most of the high-paying restaurant jobs are given to white workers, especially white men. Meanwhile, women and Black and Latino workers – especially women of color – receive less pay and occupy the lower-paid positions.

Factors contributing to inequality

A number of factors contribute to these racial and gender inequalities within the restaurant industry. First, the foundational causes of inequality in the food industry involve structural barriers for nonwhite workers, particularly African-Americans and Latinos. “Poor people of color are more likely to experience higher unemployment levels, lower quality education and housing, increased probability of violence, and reduced health outcomes, directly leading to lower economic opportunities, weaker social networks, and reduced chances of economic mobility,” the report says.

Most restaurants that were surveyed got new hires through word-of-mouth or “networks of current employees.” These practices reinforce “existing racial dynamics present in the restaurant and excludes workers without access to strong social networks.” Another factor is self-selection bias, where workers avoid applying for certain jobs because they feel they will be unwelcome or not perform well. People of color will often apply for lower-paying positions, like a dishwasher or busperson, while white applicants rarely apply for lower-paying positions. Related to self-selection bias is stereotype threat, “in which the negative stereotypes of the outside world are internalized and dampen an individual’s ability to perform”, such as nonwhites “working on standardized tests or women working on math tests.” According to a Stanford University psychology study, when stereotype threat is absent, performance matches or exceeds that of whites and men, but when it is present, performance declines.

Another factor that contributes to racial inequality in the food industry is implicit bias. Implicit bias describes attitudes and stereotypes that shape people’s understanding, behavior and decisions in an unconscious, involuntary fashion. For example, someone who might think of themselves as (and very well may be) racially progressive could hold implicit biases against people of color – i.e. accept racialized stereotypes – and act upon those biases without being aware of it. That person could be politically opposed to racial discrimination, while also subconsciously associating Black people with violence, even though violence comes in different forms and is committed by all races. That subconscious, racialized association could impact someone’s hiring choices, without them being aware of it.

When describing desired qualities for new hires and “individual characteristics leading to turnover,” restaurant owners typically used terms that could be construed as “racialized code words,” such as “good attitude,” “work ethic,” “lack of initiative,” “drive,” “clean cut,” “presentable,” “warmth,” “aura,” and “personality.” The report notes that, “These and other words have become tropes to describe the group characteristics of racial categories without acknowledging race, and it is possible that these might be an example of implicit bias when consistently used by individuals who are clearly are opposed to discrimination.” One restaurant owner admitted that implicit bias impacted hiring, saying “Yes, you hire who you are familiar with.”

Customers’ racial and gender bias plays a role, as well, particularly in tipping. Restaurant customers will often “rate workers of color as less attentive, even though they do not rate them differently on friendliness or appearance” and “tip them less than white workers.” Customers will also leave “greater tips for women who have blond hair or that are rated as physically attractive.”

The tipping system, especially when it’s a workers’ primary source of income, also “appears to promote sexual harassment not only in interactions between customers and tipped workers, but in social interactions throughout the restaurant.” Moreover, “overbearing customers” will sometimes treat workers of color with more hostility “and this can be driven by their [customers’] biases,” according to the report.

Shonda Roberts, a fast food worker and ROC member who has worked in hospitality for 20 years, shared her story with the audience:

I would love to move up the ladder in the industry but the opportunities are never available to people of color, including myself. Working at Cheesecake Factory for two and a half years in the bakery, I never saw a person of color in a management position. The front-of-the-house was made up of nothing but white people, the back-of-the-house was made up of nothing but people of color – clearly segregated. Servers clearly made more than the back-of-the-house employees.

After working at the Cheesecake Factory, Roberts said the only position she found was a cashier job; she was still the only person of color in that position. Roberts said that training and advancement opportunities are available to white people but not to people of color in the restaurant industry. The lack of people of color in higher positions discouraged her from applying for those better-paying jobs because she felt she would not be welcome. She applied to a staffing agency in Oakland that specializes in fine dining, but “they never considered me for a position nor follow-up for any future positions that became available because the majority of people working in fine dining sure were not people of color.”

The only time Roberts was given opportunities for advancement was when she worked at a restaurant operated by people of color. In fact, the ROC report mentions that workers of color in the food industry often find more support and better opportunities in restaurants owned and operated by people of color.

As more people eat out, the restaurant industry will continue to boom. More restaurants are likely to open up, which means more people will be working in them. Despite the industry’s growth, restaurant workers face persistent low wages and poverty, along with racial and gender inequality. As ROC’s findings indicate, in order to break the cycle, the industry must confront implicit bias and provide training and advancement opportunities for women and people of color.