Labor Pains: 40 Percent of Restaurant Workers Live in Poverty

Khushbu Shah
August 28, 2014
wages-low-epi-study-no-benefits.jpg
wages-low-epi-study-no-benefits.jpg


[Photo: Shutterstock]

It's no secret that the restaurant industry doesn't pay all that well, but a new report from the Economic Policy Institute (EPI) reveals that nearly 40 percent of all restaurant employees live in poverty. Even though the restaurant industry accounts for more than nine percent of all private-sector jobs in the US — up from seven percent from 1990 — the median wage has stagnated at $10 per hour, tips included. The wages haven't adjusted for inflation at all since 2000. For a person not working in the restaurant industry, the median salary is $18 an hour. That is about $2.50 more than what a restaurant manager — one of the highest paid positions in the industry — makes.

Plus, benefits are incredibly rare: If a worker is not unionized (most of them are not), only 14.4 percent receive employer-sponsored health insurance. In other industries, nearly 49 percent are given health insurance through their jobs. Often, as seen in cities like Charleston, restaurants participate in "wage theft" by asking employees to "work off the clock" and then failing to pay them overtime. The low wages and lack of benefits are especially shocking given the fact that two in five restaurant workers "have at least some college education" and the "vast majority" have a high school degree.

The EPI study suggests ways to improve these standards: The government pass legislation "requiring all employers to provide sick days to their employees," updating labor laws to protect workers' rights to organize, and cracking down on "wage theft." The study also recommends raising the minimum wage — which places like Minnesota and Seattle have done — plus eliminating the tipped minimum wage altogether.

· Restaurant Workers Can't Make Ends Meet [EPI via Mother Jones]
· All Minimum Wage Coverage on Eater [-E-]