More than four million Americans work in the full service restaurant industry. Of these, nearly half rely on public assistance for their family’s basic needs, according to Restaurant Opportunities Centers (ROC) United researchers. The total cost of this taxpayer-funded support amounts to more than $9.4 billion per year.
The report also breaks down the public cost of low wages at the five largest full-service restaurant corporations: Darden (owner of Olive Garden, LongHorn Steakhouse, and other chains), DineEquity (parent of IHOP and Applebees), Bloomin’ Brands (Outback Steakhouse and other chains), Brinker International (Chili’s Grill & Bar), and Cracker Barrel.
Because they have the largest workforce, DineEquity puts the heaviest burden on taxpayers, with employees relying on $450 million in public assistance per year, according to ROC estimates.
In addition to the subsidies resulting from the industry’s low-wages, taxpayers are also subsidizing these corporations’ executive compensation. Last year the Institute for Policy Studies crunched some numbers on this. Specifically, we calculated the cost of a loophole that allows corporations to deduct unlimited amounts from their income taxes for the cost of executive compensation — as long as the pay is in the form of stock options and other so-called “performance pay.” This loophole serves as a massive subsidy for excessive executive compensation.
We found that in 2012 and 2013, the CEOs of the 20 largest corporate members of the National Restaurant Association pocketed more than $662 million in fully deductible “performance pay,” lowering their companies’ IRS bills by an estimated $232 million. The NRA is a major opponent of raising the minimum wage, especially for tipped workers, as well as paid sick leave and fair scheduling laws.
Among full-service restaurants, the company that had enjoyed the largest CEO pay subsidy was Darden. Then-CEO Clarence Otis, Jr. took in nearly $9 million in fully deductible “performance pay” over the years 2012 and 2013. That works out to a more than $3 million taxpayer subsidy.
Otis was pushed out of the company in 2014 for— you guessed it— poor performance. He nevertheless sailed away with compensation and retirement funds valued at the time at $36 million.
ROC, which works to improve wages and working conditions for the nation’s restaurant workforce, timed their new report to coincide with the NRA’s annual lobby days in the U.S. Congress. The chair of the Ben & Jerry’s corporation recently slammed the NRA for their role in perpetuating the industry’s low-road model. “The National Restaurant Association and the American Hotel & Lodging Association are using every legal and political tactic in the book to block minimum wage raises from being implemented in Seattle, San Diego, Los Angeles, and other cities,” Ben & Jerry’s executive Jeff Furman wrote. “Instead, these trade associations should be helping businesses transition to a high-road model.”
For the sake of their workers —and for taxpayers —let’s hope they get the message.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
Last week, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment. We are presently looking for 242 new monthly donors in the next 2 days.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy