And business owners don't understand why workers don't come back
KENNY STANCIL for Common Dreams
The
report from advocacy group One Fair Wage and the Food Labor Research Center at
the University of California, Berkeley, urges congressional lawmakers who are
"now considering allocating tens of billions more dollars in taxpayer
funds to restaurant owners" to make further aid contingent on employers
providing a livable wage.
Restaurant
owners have collectively received more than $73.2 billion in federal relief
since March 2020 thanks to grants, loan forgiveness, and tax credits authorized
by Congress, notes the report. Meanwhile, subminimum wage workers—a majority of whom are
women and disproportionately women of color—have struggled to obtain
assistance.
Researchers
contrast the experiences of restaurant owners and workers:
To help them face the challenge of keeping their businesses afloat during the pandemic, restaurant owners had access to three different federal relief programs: the Paycheck Protection Program, the Restaurant Revitalization Fund, and the Employee Retention Tax Credit.
If they were able to access all three
programs at their average amount awarded, an average restaurant owner with
fewer than 500 employees could have obtained a total of up to $775,439 in
grants, forgiven loans, and potential tax credits.
EDITOR"S NOTE: The minimum wage for tipped workers in Rhode Island is $3.89. Charlestown's restaurants also made extensive use of pandemic subsidies, as the following tables show. - Will Collette
The Nordic is, of course, the Nordic Lodge. Birdmar Enterprises is the Cove. MGMR is the Meadowbrook Inn.
In addition, here are other pandemic subsidies received by Charlestown restaurants:
CHARLESTOWN RATHSKELLER TAVERN, INC.
- Charlestown, RI, 02813
- Approval amount: $262,200
- Jobs reported: 65
THE CHARLESTOWN RATHSKELLER TAVERN INC
- Charlestown, RI, 02813
- Approval amount: $476,311
- Jobs reported: 65
THE NORDIC INC. the Nordic Lodge
- Charlestown, RI, 02813
- Approval amount: $306,472
- Jobs reported: 54
- Forgiveness amount: $301,277
THE NORDIC INC. – The Nordic Inn
- Charlestown, RI, 02813
- Approval amount: $429,062
- Jobs reported: 65
-------------------------------------------------------------------------
While they also faced tremendous challenges in paying their rent and feeding their families, restaurant workers throughout the pandemic had access to two much smaller and harder to access federal relief programs: federal unemployment insurance and a stimulus cash payment. In May 2021, One Fair Wage estimated that only 56% of initial unemployment claims reached workers several months after the onset of the pandemic.
Nearly two-thirds of workers surveyed reported
that they faced challenges obtaining benefits. If they were able to access the
full amount of both programs, a restaurant worker could have obtained at most a
total of $26,300 over 74 weeks (a year and a half) in additional assistance.
As
the authors explain, the National Restaurant Association—led by major
chain CEOs with multimillion-dollar salaries—successfully lobbied for billions
of dollars in subsidies for restaurant owners while "simultaneously
lobbying against any wage increases for their workers," allowing the
industry to maintain the nation's lowest-paid workforce.
Congress—which
has kept the federal subminimum wage for tipped workers at $2.13 an hour for
more than 30 years—obliged, allowing businesses to access funds that came with
few, and sometimes no, worker-friendly strings attached.
From
the inadequate requirements governing employee retention, wages, and
treatment in restaurant owner rescue programs to the structure of federal and
state unemployment aid, restaurant workers have largely been left behind when
it comes to Covid-19 relief, the report shows.
"In
the first year of the pandemic," the authors write, "many restaurant
workers found themselves locked out of the unemployment benefits offered in the
$2 trillion federal stimulus relief package," with some receiving $3,200
in stimulus checks "at most."
The
report continues:
The
CARES Act and the American Rescue Plan gave workers a combined potential of 74
weeks of unemployment insurance, totaling at most up to $23,100 in extended
benefits on top of the base unemployment insurance weekly benefit. However, to
be eligible for state unemployment insurance, workers were required to submit a
minimum [number] of hours worked or minimum amount of wages earned over a
specific "base period"—usually a time frame equal to one year (though
this varies state by state). In June 2020, two-thirds of service workers who
applied to the One Fair Wage Service Workers' Relief Fund noted challenges in
accessing unemployment insurance; many noted that they were deemed ineligible
due to their subminimum wage.
Subminimum
wage workers' dependence on tips left them vulnerable to incidence of wage
theft and under-reported cash tips that led to workers receiving smaller weekly
unemployment benefits or even being denied these benefits outright. In the case
of employers under-reporting restaurant workers' tips, workers only qualified
to receive part of their salary or appeared to earn "too little" and
thus failed to qualify for unemployment insurance altogether.
Given
widespread difficulties in securing unemployment benefits, the report notes
that "millions of workers returned to working in restaurants in the summer
of 2020."
By
the fall of 2020, however, "tipped workers reported that their tips had
declined, while health risks, customer hostility, and sexual harassment had
increased," says the report. "When asked to enforce social
distancing, mask rules, and Covid vaccination card rules on the same customers
from whom they had to get tips to survive, workers reported that their tips
decreased even further—a key breaking point for millions of workers."
There
has been a "mass exodus" from the restaurant industry due to a
"lack of relief and stagnant wages"—especially in the 42 states where tipped workers are still
allowed to be paid a subminimum wage, the authors write. Compared with their
counterparts in the eight states that guarantee a full minimum wage plus tips,
restaurant workers making a subminimum wage are more likely to live in poverty
and to be victims of sexual harassment.
Nearly
one million workers have left the restaurant industry during the pandemic,
"unwilling and unable to tolerate poverty wages any longer," the
report states. "Of those who remain, 53% say they are leaving, and 76% say
the only thing that will make them return to work in restaurants is a full,
livable wage with tips on top."
Now
that they are "hemorrhaging" workers after "decades of
uncompetitive labor practices," restaurants face "the greatest
staffing crisis of any industry," the report points out.
Thousands
of restaurants nationwide have responded by increasing pay. One Fair Wage has
tracked nearly 3,000 restaurants across all subminimum wage states that are now
offering workers a full minimum wage plus tips in a bid to recruit staff.
"These
restaurants are demonstrating that it is possible to pay livable wages and
should be supported in their efforts to recruit staff by limiting relief to
these responsible employers," the report argues. "Providing all
restaurants with relief regardless of their pay and treatment of workers places
these responsible restaurant owners at a competitive disadvantage to restaurant
owners, particularly large corporate chains, persisting with a subminimum wage
for tipped workers."
"If
members of Congress and state legislators are considering providing more
taxpayer-funded restaurant relief," the report continues, "they must
simultaneously ensure these restaurants' employees receive a full, fair,
livable wage with tips on top."
"Workers
are making it clear that they will not return to an industry that refuses to
pay competitive wages," the authors add. "If the subminimum wage for
tipped workers persists, the restaurant industry is unlikely to recover from
its growing labor crisis, regardless of how much money the federal government
hands out to business owners.