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Restaurant Industry Screws Women, While $2.13 Tipped Worker Minimum Wage Makes it Worse

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Laura ClawsonRestaurant workers who make the federal minimum wage for tipped workers are pretty well screwed: That minimum wage is just $2.13 an hour, the theory being that tips will be enough for these workers to get by. When tips don’t bring workers up to the full federal minimum wage of $7.25 an hour, their employers are supposed to make up the difference, but in practice, that’s an invitation for bosses to pressure workers to just accept below-minimum wages. That’s not the only abuse of this rock-bottom minimum wage, though, and as a new report from the Restaurant Opportunities Centers United shows, these abuses and high poverty rates fall most heavily on women.

The statistics pile on top of each other in creating the picture of just how badly women in the restaurant industry have it:

“The median wage for restaurant workers in 2010 was $9.02, meaning that well over half of these workers earned less than the wage of $10.75 that a family of four needs to remain out of poverty.”

Almost half of all workers making below minimum wage are restaurant workers; 19 percent of restaurant workers earn less than minimum wage.

Five of the 10 lowest-paying jobs in the country are tipped restaurant jobs.

Women are 52 percent of all restaurant workers, but 66 percent of all tipped workers in restaurants and 71 percent of servers. That means that women are far more likely to face the uncertainty and poverty of tipped work.

“The typical full-time, year-round female server is paid just 68 percent of what her male counterpart is paid ($17,000 vs. $25,000 annually).” This disparity is in part because women are concentrated in the kinds of restaurants that pay less, while men are more likely to work in fine dining restaurants.

Basically, the restaurant industry is taking an abysmally low base wage, adding in employers who pressure workers not to demand their legal right to make at least the full minimum wage, and crowding women into the lowest-paying occupations and sectors of the industry. Few restaurant workers have either paid sick days or employer-provided health insurance, of course. As well, at slow times, restaurants may send home workers who earn the full minimum wage or above, keeping servers who are only paid $2.13 an hour to staff the restaurant, as one woman profiled in the report experienced:

One night, Claudia was one of three servers on a slow night. Claudia was told to roll silverware into napkins for two hours straight, not taking any customers except for one table. Claudia knew she wouldn’t make any tips, and she’d still be asked to report that she made the minimum wage in tips. Meaning, with taxes, she’d have worked for free. After two hours, Claudia approached the manager, saying, “I’m done with the silverware, and other servers are getting tables. Can I serve a table now?” The manager berated Claudia on the dining floor. She told her to punch out and go home, and to tell her table that someone else would serve them.

Women in the restaurant industry also frequently face sexual harassment:

More than one in ten of the more than 4,300 restaurant workers ROC-United surveyed nationwide reported that they or a co-worker had experienced sexual harassment in their restaurant.100 This figure is very likely an undercount. A recent MSNBC review of Equal Employment Opportunity Commission (EEOC) data revealed that from January to November 2011, almost 37 percent of all EEOC charges by women regarding sexual harassment came from the restaurant industry, even though less than 7 percent of women work in the restaurant industry.

The full minimum wage of $7.25 an hour is already too low, and doesn’t protect workers from sexual harassment or a range of abuses, including the practice, common in retail as well, of not giving workers more than a day or two of notice on their work schedules, or calling them in to work only to send them home almost immediately. But increasing the minimum wage for tipped workers would be an important step: Some states have eliminated the subminimum wage for tipped workers, calling for these workers to be paid the basic minimum wage. These states have the same overall poverty rate as states that use the federal rate—6.7 percent—but “Servers in states that follow the federal subminimum wage have a poverty rate 43 percent higher than in states without,” 19.4 percent to 13.6 percent. Even raising the wage for tipped workers to 70 percent of the federal minimum wage would make an enormous difference for many. The federal government should also follow the lead of states that have instituted “show-up” pay requirements, so that employers have a disincentive to call workers in and then send them home quickly.

And between now and whatever far-off day when those much-needed laws are passed, the government should enforce the laws that are already in place, rather than letting employers get away with intimidating workers into accepting less than they are legally entitled to.

This blog originally appeared in Daily Kos Labor on February 19, 2012. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.

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How a Raise in the Minimum Wage Could Benefit Both Workers and the National Economy

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Andy PictureOn June 7, 2011, the Center for American Progress hosted a panel discussion on research conducted on minimum wage increases, and the economic effects these increases caused. Participants included: David Madland (Center for American Progress Action Fund), Helen Neuborne (Ford Foundation), Heidi Shierholz (Economic Policy Institute), Celinda Lake (Lake Research Partners), Sylvia Allegretto (University of California, Berkeley), Michael Reich (University of California, Berkeley), and Paul Sonn (National Employment Law Project).

The most basic rationale behind raising the minimum wage is widely known: the current minimum wage is not a “living wage”, i.e. compensation that can truly allow an individual to meet regular monthly expenses. Data provided by the panel indicated that a woman with two children would need to work three minimum wage jobs in order to place herself in a stable position in most communities across the country. Over two-thirds of those polled on the issue of the minimum wage regularly state they favor an increase, so political action on this front would probably not be overwhelmingly unpopular. Yet the question remains: are there other reasons for raising the minimum wage besides its effect on livings standards and its widespread support?

Perhaps the most important point discussed by the panelists was that the minimum wage can be raised without destroying jobs. Conventional wisdom long held that raising the minimum wage would cause this effect, but recent economic research has tended to disprove this theory. Whether a minimum wage increase is studied at the national level or within a smaller unit (like an individual industry), these recent studies have shown that a minimum wage increase actually has no effect on the number of jobs in the marketplace.

A minimum wage increase would actually be economically beneficial since it would increase the spending power of consumers, which would result in increased aggregate demand. Furthermore, a higher minimum wage would strengthen job stability, decrease job turnover, and benefit the middle class. Job stability and decreased turnover are benefits that would be shared with employers, since they normally must expend additional company resources to train new hires when individuals rapidly cycle in and out of jobs. With less job turnover, employees can also become more experienced.

An increase in the minimum wage could also directly stimulate the economy, and be part of a larger national economic recovery. In a sense, a minimum wage increase involves shifting profits from corporations to workers, since without an increase in pay corporations would normally keep these funds. Research indicates that although allowing companies to keep this money would benefit the economy, the profits can do more economic good when they are transferred to the minimum wage workers. This is because corporations often don’t go out and spend this extra money in the marketplace. Minimum wage workers, however, need to spend what they earn in order to obtain basic necessities. So the extra money put in the pockets of minimum wage workers is actually immediately spent obtaining goods and services.

Finally, a minimum wage increase could be used in conjunction with the Earned Income Tax Credit to provide even greater support for the working class. Using only the EITC in isolation with no minimum wage increase might actually result in a decrease in wages: the EITC encourages individuals to seek employment, but with an increase in the amount of labor available, wages go down. Using both the EITC and a minimum wage increase together would actually increase the positive effects of both. This two-pronged approach also has the benefit of dividing the financial burden of paying for this support: with a minimum wage increase, the employers must face additional costs, and taxpayers cover the EITC. Using both methods results in a more equitable distribution of who pays for the assistance.

The Center for American Progress’s panel raised many interesting questions, and the research cited indicates that the minimum wage need not be seen as an economic burden, but a tool for national growth. With bipartisan support for an increase in the minimum wage already in place, perhaps federal and state governments will take action soon on this important issue.

About the Author: Andrew Laine is a law student and intern at Workplace Fairness.

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Four Years Ago Today, Hardworking Families Finally Got a Little Help

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senator_jon_testerExactly four years ago, hardworking folks across the country finally got a pay raise ten years in the making.

One of the first laws I helped pass, just a couple of months after joining the Senate, was the Fair Minimum Wage Act. And it became law four years ago today.

Passing that law was a promise I’d made to Montanans. I’m proud that it was a promise kept.

On the same ballot where my name appeared in 2006, Montanans overwhelmingly passed a measure raising our state’s minimum wage. I endorsed the effort and it earned the support of 73 percent of Montanans.

Montanans sent a clear message with that vote–that we understand the value of workplace protections like the minimum wage.

Because by 2006, years of failed federal economic policies by politicians in Congress had led to Montana coming in 50th (dead last) for wages in the entire country.

Montanans understand the minimum wage is an American value. And it’s a value I took with me to the Senate, where I fight for our working families every day.

I fought to pass the Fair Minimum Wage Act–which raised the minimum wage after the longest gap between increases in history–for the same reasons I’ve fought for more jobs, better access to veterans’ care and lower taxes for working families. And it’s why I fought to put health care decisions in the hands of patients instead of insurance companies.

For the same reasons, I fought for other workplace protections like the Lillie Ledbetter Fair Pay Act to prevent discrimination against women.

I’ve fought for these changes because I’m a third generation family farmer and small business owner and I know firsthand the challenges that working Montana families face.

They deserve leaders who work for them.

Other members of Congress have had different priorities over the years. But I personally believe public service is not about looking out for your own career or your own paycheck. Public service should be about building a better future for our kids and grandkids.

On this anniversary, let’s redouble our efforts to strengthen the middle class, in Montana and across the country.

Because a lot of politicians who’ve stood in the way of progress for our working families have no idea what it’s like to earn a minimum wage.

Maybe if they did, we’d see how quickly they start changing their tune.

This article originally appeared in the Huffington Post on May 25, 2011. Reprinted with permission.

About the Author: Senator Jon Tester is a third generation family farmer from Big Sandy, Montana.  He farms the same land his grandparents homesteaded nearly 100 years ago.  During his first Senate term, he has earned a reputation as a champion for rural veterans, a pioneer in government transparency and a powerful voice for rural America.

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Did a Sodexo Manager Really Just Say That?

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Image: Brad LevinsonAs over 1,500 students at Loyola Marymount University begin a massive boycott of Sodexo’s dining facilities this week, Sodexo’s general manager for the area, Lisa Farrell, has issued a revealing quote that may enrage workers and students all over the country.

The school’s newspaper, the Los Angeles Loyolan has the story of the boycott, which students are staging for reasons including “reducing the prices of perishable items such as fruit, making price reductions for students who choose to forgo meat and ensuring that workers are paid a living wage,” according to student Megan Lynch.

According to Lynch, Sodexo justifies their “high prices” by explaining that “workers are paid the local living wage of $11.25 per hour.” The students, however, “have come to find that many Sodexo employees make $8.50 to $9.00 an hour,” reports the Loyolan.

But here’s the kicker: within the article itself, Sodexo manager Lisa Farrell unintentionally admits that Sodexo does not pay a living wage, as defined by the City of Los Angeles’s living wage law. Here’s what she’s said to the Loyolan:

“The current L.A. living wage is … $10.30 an hour, with health benefits, or $11.55 an hour if no health benefits are offered. Here at LMU, we have a minimum starting wage of $9.05 per hour plus one meal per shift valued at $1.25…Sodexo offers full benefits to all full-time employees.”

The last time we checked, $9.05 an hour does not equal $10.30 an hour, nor does it equal $11.55 an hour.

And what about that free meal per shift valued at $1.25? Even if we gave Sodexo the benefit of the doubt and included that figure in lieu of actual pay – which would be extremely unusual – that would mean that a worker making $9.05 an hour and receiving the $1.25 meal would only make the living wage for the hour that they’re afforded that meal. For the rest of the hours they’re working, they’re still making $9.05. Nice try, though.

It’s also unclear how many of the Sodexo workers on site actually are afforded full-time positions that provide health-care benefits- meaning that for these workers, they would have to make $11.55 an hour to meet the living wage guidelines – not the $8.50 and $9.00 that the students are reporting.

And how about a second look at the $1.25 figure? As Farrell admits, the meals that the workers are provided are “valued at 1.25.” Explain that to the students spending $10 for that meal, as LMU student John Twehill says he does.

*This post originally appeared in the SEIU Blog on December 9, 2009. Reprinted with permission from the author.

About the Author: Brad Levinson is new media strategist for SEIU, where he current serves as the new media lead for the organization’s Property Services division.  In addition to his daily role of designing and implementing new media programming for SEIU’s food service workers, security officers and janitors, his current work involves developing a functional model for successful online union organizing.  Brad’s primary interests include online organizing, emerging media trends, online video, online anthropology and culture, and digital divide issues.  He is a graduate of Drexel University and earned his masters in media and politics from Georgetown University.

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National Day of Action to Stop Wage Theft

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Image: James Parks

Workers, community leaders and religious activists are holding rallies, prayer vigils and other actions in more than 40 cities around the country today as part of a National Day of Action to Stop Wage Theft.

Wage theft is a national epidemic, which robs millions of workers of billions of dollars they’ve worked for but never seen, says Kim Bobo, executive director of Interfaith Worker Justice (IWJ) and author of the book Wage Theft in America.

During a Capitol Hill press conference this morning, Bobo said:

Too many workers can’t buy a Thanksgiving turkey because employers have stolen their wages. Wage theft is not a small, isolated situation. It’s a national epidemic.

Wage theft affects workers like Cleve Williams, who worked for a city contractor in Cincinnati. Williams told the press conference he was fired after he organized his fellow workers to fight for a living wage. The city’s law required the comapny, which holds a city contract, to pay a minimum wage. But Williams says it took three years to get the wages raised to the legal level.

Bobo cited a study by the National Employment Law Project, which shows how widespread wage theft has become. Drawing on in-depth interviews with 4,387 workers in Los Angeles, Chicago and New York City, a group of respected academics estimates that 68 percent of the workers surveyed are routinely denied proper overtime pay and often are paid less than minimum wage. The average low-wage worker lost more than $2,600 in annual income due to the violations, 15 percent of their annual earnings. Click here to read the report, “Broken Laws, Unprotected Workers.”

AFL-CIO Executive Vice President Arlene Holt Baker, speaking to the press conference by phone, said the nation’s economy suffers when millions of workers are denied their just pay. Unions are the first line of defense against wage theft, she added. With a union contract, workers don’t have to worry about not getting paid for overtime or not getting a decent, living wage and other benefits.

Wage theft is not only an economic issue, but a moral one, says Thomas Shellabarger, of the Department of Justice, Peace and Human Development at the U.S. Conference of Catholic Bishops.

As we pause this Thanksgiving to remember all that we are thankful for, we also remember the workers across the nation whose wages are stolen and struggle to put a meal on their holiday table. We must put an end to this national scandal of wage theft.

*This article originally appeared in AFL-CIO blog on November 19, 2009. Reprinted with permission from the author.

**For more information on unpaid wages visit our Workplace Fairness resource page.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris

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