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October 31, 2023 HUMAN RIGHTS

It’s a Great Revolution, Not a Great Resignation, in the Restaurant Industry

by Saru Jayaraman

The nation’s restaurant industry is undergoing historic upheaval and is on the precipice of historic change. While U.S. restaurant workers have experienced the nation’s lowest wages since Emancipation as a direct legacy of slavery, they are, for the first time in U.S. history, experiencing a unique moment of worker leverage. Over 1 million workers have left the industry, and thousands of restaurants are raising wages to recruit staff—creating enormous opportunities for lasting change.

In the United States of America in 2023, in 43 states and at the federal level, restaurant owners are allowed by law to pay less than the full minimum wage to servers and bartenders. Under a centuries-old law that is a direct legacy of slavery, tips can serve as a direct replacement for wages. When chattel slavery was officially abolished in the United States, white restaurant and railroad owners were eager to find a way to hire newly freed Black workers and continue to access free Black labor. They thus invented a system in which tips, which were popular in Europe as an expression of gratitude on top of wages, could be imported to the United States as a replacement for wages.

The idea that variable, unreliable tips were a substitute for wages understandably outraged workers. Pullman train porters, under the leadership of A. Phillip Randolph, formed the nation’s very first African American union—the Brotherhood of Sleeping Car Porters. The union negotiated a contract with the railroads and demanded a minimum wage rather than having to rely on tips. In response, to prevent the same type of advancement among their employees, restaurant owners organized the National Restaurant Association (NRA) in 1919, a powerful organization created to preserve and expand the subminimum wage. By the time the United States established the first nationwide minimum wage in 1938, the powerful restaurant lobby ensured that the subminimum wage would be ensconced in law as an exception. Today, at the federal level, the subminimum wage remains just $2.13 an hour and has not increased since 1991. 

Today, at the federal level, the subminimum wage remains just $2.13 an hour and has not increased since 1991.

Today, at the federal level, the subminimum wage remains just $2.13 an hour and has not increased since 1991.


As a result of this legacy of slavery, when we tip at restaurants, our tips subsidize what restaurant owners are obligated to pay their workers. The tip is not what most diners intend it to be—an extra thanks on top for great service. Rather, because of the subminimum wage for tipped workers, those tips actually pay restaurant workers’ wages. While a minuscule percentage of servers at fine dining restaurants and busy steakhouses are able to earn many times the minimum wage with their average tips per hour, the overwhelming majority of tipped workers are women, disproportionately women of color and single mothers, who work at casual restaurants, diners, and dive bars where they earn very little in tips regularly—and even less when they work a graveyard shift. While federal and many state laws require employers to make up the difference with the minimum wage if tips fall short, few actually do so. In fact, one study by the U.S. Department of Labor in 2012 reported that 84 percent of full-service restaurants have violated the laws surrounding the two-tiered wage system for tipped workers.

Indeed, wage exploitation is not the only injustice that the subminimum wage for tipped workers creates. Because of these systemic poverty wages, restaurant workers rely on food stamps at twice the rate of workers in other industries. In addition, Black workers are routinely tipped less than white servers, accounting for the fact that, nationwide, Black women restaurant workers earn $5 less an hour than their white male counterparts. The most universally experienced injustice is that women restaurant workers experience sexual harassment at the highest rate of any industry in the country because they must tolerate inappropriate customer behavior to feed their families in tips. These and other injustices are magnified by the reality that restaurant workers are disproportionately women of color, and in many cases immigrant women of color.

With the COVID-19 pandemic, the injustices faced by restaurant workers became unlivable. With the initial pandemic shutdown in March 2020, 6 million restaurant workers lost their jobs; two-thirds of these workers reported that they were denied unemployment because states told them that they did not earn enough to qualify because of the subminimum wage for tipped workers. When they returned to work in restaurants in the summer and fall of 2020, a majority of workers reported that restaurant work grew simultaneously more dangerous and demanding at the same time that rates of tipping declined. More than half of women workers also reported that sexual harassment increased, with hundreds of women reporting that they were regularly asked to remove their masks so that male customers could judge their looks and their tips on that basis. When they were asked to enforce COVID protocols on the same customers from whom they had to get tips to survive, these workers reported being tipped less, screamed at, and even physically attacked—and they started to leave the industry in droves. Over 1 million workers have left the industry since the pandemic began, and the restaurant industry continues to face the worst staffing crisis in its history. Over 60 percent of workers who remain have reported that they are leaving the industry, and nearly 80 percent have reported that the top factor that would make them stay or return to working in restaurants is a full, livable wage with tips on top.

In response, there has been a historic change in the marketplace. The organization that I lead, One Fair Wage, has tracked over 5,000 restaurants in the 43 states that allow a subminimum wage and that have voluntarily raised wages, transitioning from paying a subminimum wage for tipped workers to paying a full minimum wage or even higher. In some instances, we have noted 1,000 percent wage increases, from paying the subminimum wage of $2.13 an hour to offering $20 or even $25 an hour plus tips. Leaders in our “high road” employer association, RAISE, have noted that, while they are raising wages across the country to recruit staff, they cannot do it alone. They need a policy that will end the subminimum wage for tipped workers to create a level playing field so that all restaurants must raise wages to recruit staff. They have also noted that they still do not have enough recruits even with higher wages; they note that policy change to raise wages would signal to millions of workers that wage increases will be permanent and that it is worth coming back to work in restaurants.

On the other hand, in response to the restaurant worker exodus, the NRA has been a leader in the fight to weaken child labor laws in multiple states. The restaurant lobby has been actively working to remove minor work permit requirements that allow governments to monitor employers, increase the hours children can work while in school, and allow minors to serve alcohol. The lobby has even declared on its website that child labor is the answer to the industry’s worker shortage.

 While the NRA works to end child labor protections, the number of child labor violations is on the rise. Since 2018, the U.S. Department of Labor has documented a 69 percent increase in children being employed illegally. The restaurant industry represents the vast majority of child labor abuses; the industry accounts for over 64 percent of child labor violations.

As a result of this historic upheaval, policy is finally advancing to raise wages and end subminimum wages in states across the country. In 2022, 75 percent of voters in the District of Columbia voted to raise tipped workers’ wages from $5 to the full minimum wage of $16 an hour. In 2023, bills and ballot measures have been advancing in 10 states to end the subminimum wage for tipped workers, with real potential for passage in Chicago and various Maryland counties. For 2024, workers are collecting signatures to enforce wage increases that would end subminimum wages in five more states.

States across the country now have a choice—in response to historic worker upheaval, they can either follow the lead of the NRA and weaken child labor laws or they can follow the lead of millions of workers who are demanding the same minimum wage that all other workers receive—or they will not return to work in restaurants. The danger of not following these workers’ lead is the ongoing exacerbation of wage theft, sexual harassment, and racial discrimination. In New York State, for instance—where two democratic governors in a row have mysteriously refused to use their executive authority to end the subminimum wage for tipped workers—workers filed suit against Applebee’s for raising wages to recruit staff in the predominantly white-staffed Manhattan restaurants while continuing to offer the subminimum wage for tipped workers to its majority Black and brown workforce in the Bronx, even though menu prices and sales in both locations have been comparable.

We need more lawyers and firms to step up and join us in holding corporate restaurant chains accountable. They base their business models not only on the subminimum wage for tipped workers but also on the systemic wage theft, sexual harassment, racial discrimination, and child labor law violations that the subminimum wage for tipped workers facilitates. Most importantly, everyone—lawyers, judges, owners, and customers—must demand that every state and the federal government finally prohibit restaurant employers from continuing their racist, sexist subminimum wage practices for tipped workers that lead to so much injustice and exploitation. The case for fairness and equity has never been clearer. The need for change has never been more urgent. 

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Saru Jayaraman

President of One Fair Wage and the Director of the Food Labor Research Center at the University of California, Berkeley

Saru Jayaraman is the president of One Fair Wage and the director of the Food Labor Research Center at the University of California, Berkeley, and the author of One Fair Wage: Ending Subminimum Pay in America.