By Maria Myotte
Jan 31, 2014
Good ole’ Costco made national news again during this year’s State of the Union. Why? Because Costco is a corporate empire that pays livable wages.
Unfortunately, this type of business model is treated as if it’s an endangered species, even more so within the restaurant industry. With 13 million employees nationwide and six of the 10 lowest paying jobs in the country, the restaurant industry can be a rather unpleasant place.
However, there are a growing number of restaurant owners championing Costco-like policies—living wages for their tipped and non-tipped staff, paid sick days, and other worker-friendly policies. Despite corporate America telling us that raising wages will kill jobs, these restaurants are extraordinarily successful. At Restaurant Opportunities Centers United (ROC United), we call them “high road” restaurants; and these owners would tell you themselves that living wages are good business.
Let’s start with Miami’s Choices Vegan Cafe. Their food is organic, products recycled and/or compostable, and chemicals minimal. Just as importantly, their sustainable ethos carries over to labor practices. Although Florida’s minimum hourly wage for tipped workers is just $4.91, Choices Vegan Cafe starts all tipped workers off at $8.50. In fact, they never even considered paying tipped workers the bare minimum. Lori Zito, Senior Director, says, “If we can do it, anybody can.” They’re gearing up to open another location within the next month.
Ann Arbor Michigan’s Zingerman’s is a family-run chain with nearly 600 employees. From day one, they have paid well above the federal minimum wage and offered company-subsidized health care and paid time off. According to Paul Saginaw, one of 16 partners, “We have never considered these critical costs of doing business obstacles to profitability or our annual compounded growth rate of 10 percent.”
In 1997, Johnny Livesay started out as a busboy. Today he’s a founding member of Black Star Co-op in Austin, Texas. “Paying people well for the work they do is just the right thing to do,” he says. Their business model doesn’t allow tips, everyone makes a living wage after their first three months, and they encourage ownership of the business. “People should be able to afford to take care of their loved ones regardless of their jobs,” Livesay says. “It's not fair to pay so little to workers making your money for you.” Black Star Co-op thrives in Texas, one of many states where it is still legal to pay tipped workers $2.13 an hour.
In Los Angeles, one of the largest restaurant industries in the US, Diep Tran owns and operates the popular Good Girl Dinette . California is one of few states that has eliminated the tip credit, requiring all workers to be paid a minimum of $9.00 an hour. All her employees start above the minimum wage. “What’s a sustainable restaurant?” Tran asks, “It’s one in which as the restaurant grows, the people grow with it.”
It’s especially significant that all these restaurants employ tipped workers. Fervent lobbying by the corporate restaurant lobby, the National Restaurant Association, has kept the federal tipped minimum wage stuck at $2.13 an hour since 1991. As a result, servers—a majority of whom are women—use food stamps at double the rate of the rest of the workforce and are three-times as likely to live in poverty. They typically get $0 paychecks because their base wage is swiftly eaten up by taxes. Although labor laws require owners to ante up and pay their staff the federal or slightly higher (where applicable) minimum wage when tips don’t fill the gap, enforcement is alarming sparse. According to research from the Economic Policy Institute, employers have a .001 percent chance of being investigated in a given year, making wage theft pretty common, and easy to get away with. If you’re familiar with living paycheck-to-paycheck, servers are quite literally living shift-to-shift.
Yet corporate executives and CEOs still claim they can’t afford to pay more, and are actively involved in rolling back wages, blocking paid sick days, and fighting other worker-friendly regulations. In stark contrast, most small business owners already pay more than the minimum wage, and a large majority support raising it to $10.10 and indexing it for inflation. While putting forward publicity-ready talking points lauding the small business owner, the National Restaurant Association is lobbying at local and national levels against things that most small business owners are already doing.
All of which makes it even more salient that restaurants like Choices Vegan Cafe, Zingerman’s, Good Girl Dinette and Black Star Co-op are opting out of—or completely bypassing—the corporate-led ‘race to the bottom.’ Their success proves that restaurants can value employees and be financially viable. And consumers feel good knowing all the employees at their favorite spots can afford to make ends meet. And although each High Road restaurant is quite popular locally, these owners play an important role in shifting the national conversation on raising labor standards across this industry. Some regularly make it to DC to stand up for workers rights and support bills that would require better wages. They’ve joined a like-minded restaurant association called RAISE, Restaurants Advancing Industry Standards in Employment, and have invited elected officials to be a “server for a day” to help bring attention to local proposals to raise the tipped wages.
Nationwide, there are nearly 100 other High Road restaurants listed in our Diners Guide to Ethical Eating. Support them and thank the owners for doing the right thing. To track down High Road restaurants in your neck of the woods, the guide is also available as an app.
Maria Myotte is National Communications Coordinator for Restaurant Opportunities Centers United.