When the coronavirus pandemic hit New York City in mid-March, the city’s restaurant industry was among the first to feel the shock. With so many restaurants shuttered since then, restaurant workers are reeling. According to the Bureau of Labor Statistics, nearly 200,000 restaurant and bar staffers lost their jobs between March and April, a 68.1 percent reduction.
As part of an effort to lay the foundation for reopening, last week, New York City Mayor Bill de Blasio announced a $3 million Restaurant Revitalization Program, which will provide funding to 100 family-run restaurants forced to close due to COVID-19.
The project is part of a collaboration with One Fair Wage, a national organization dedicated to raising wages and increasing equity for service workers. Restaurants are eligible for a $30,000 grant from New York City and a $5,000 grant from One Fair Wage. Restaurants that don’t land $30,000 from the city, but commit to One Fair Wage’s equity program, also have the opportunity to apply to get the entire $35,000 from One Fair Wage. The group launched a version of this initiative, which they call High Roads Kitchens, in California in May.
In line with One Fair Wage’s mission, the funding comes with a few stipulations: Restaurant owners must pay $20 an hour (before tips) to each worker for six weeks, and then must commit to paying $15 an hour for all workers—including tipped workers—within five years. The requirement is an effort to end a practice still in use in 43 states that allows workers who receive at least $30 per month in tips to be paid just $2.13 per hour.
Restaurants must also provide 500 free meals per week to low-wage workers, health care workers, or others who are struggling as a result of the pandemic. Priority will also be given to restaurants in neighborhoods hardest hit economically by the pandemic, especially in low-income communities of color.
“Having 100 restaurants commit . . . will go a long way toward moving to one fair wage at the state level,” says Saru Jayaraman, president of One Fair Wage, co-founder of Restaurant Opportunities Center (ROC) United, and the director of the Food Labor Research Center at the University of California, Berkeley.
“The idea that tips can count against wages is a direct legacy of slavery, [and] we were seeing it spread to other tipped workers, even gig workers,” she added. “So what we really needed to be fighting for is the notion of ‘no worker left behind.’ Nobody in America who works—tipped, not tipped, incarcerated, disabled—nobody should get less than a full minimum wage when they work.”
Civil Eats spoke with Jayaraman after the Restaurant Revitalization Program was unveiled about the program and what it means for restaurants—and food service workers—in New York City and nationwide.
This project takes aim at the sub-minimum tipped wage. How has the pandemic highlighted why this is a terrible idea?
On Friday, March 13, 10 million restaurant and other service workers lost their jobs. We started an emergency fund for workers on March 16. We raised $23 million, we got almost 180,000 applicants from around the country, and we’ve been handing out cash payments. We have a legal clinic, financial counseling for these workers, and a tax prep program for them.
But most importantly, we’ve been organizing them at large tele-town halls with U.S. senators, governors, and state legislators. And what they are saying in vast numbers is that they are not able access unemployment insurance largely because of the sub-minimum wage for tipped workers. Many states are being told that the wage plus tips is too low to meet the minimum threshold to qualify for benefits.
Or they’re being told, “Your boss never reported your tips, so you either don’t qualify or you’re gonna earn a lot less than you should have.” And it’s worse for workers of color, because they tend to work in more casual restaurants where there are cash tips, as opposed to fine dining, where tips are typically on credit cards.
What’s it like right now for restaurant employees in the seven states that have committed to paying a minimum wage for all workers?
Workers in California, Washington, Nevada, and the four other states that [pay all restaurant workers a fair wage] are all getting unemployment insurance measured on a $15 an hour minimum wage plus tips. They’re in the same occupation, it’s just that they happen to live in a different state. So maybe they’ll be able to survive while you’ve got these millions of people—mostly women of color—in other states not able to survive. The people who are applying to the fund are telling us that they have money for less than two weeks of groceries for their kids. It’s a dire situation.
“Workers are really up in arms about all across the country is being forced to go back to a sub-minimum wage job when tips are down nationally.”
But the other thing that workers are really up in arms about all across the country is being forced to go back to a sub-minimum wage job when tips are down nationally. We estimate [they’re down] by about 80 percent, because people don’t tip as much for takeout and delivery. Even when restaurants re-open, they’ll be at half capacity. Workers are saying, “How could you make me go back for $2 or $3 an hour, and there are no tips?” So all of this is has led to employers who had fought us in the past on this issue now saying that they want to work with us to move their own restaurants to one fair wage.
What do restaurants pay before tips in New York City?
It’s 66 percent of the overall minimum wage, which is now $15. So it’s $10. But outside of the city it’s $7. It doesn’t have as far to go: New York could do this—it’s only a $5 [difference]!—they could make this change, and when they do, it will have a significant reverberating impact on other blue states in the region.
And here’s the biggest thing: There are a number of industry leaders, who fought us in the past or who didn’t want to talk to us, who are now going to one fair wage or who are saying, “I’ll be vocal and fight!”
It looks like there are two ways to apply for this grant—through One Fair Wage and through the city. Which way should a restaurant apply?
I think it’s easier for people if they go through us, because we can help them through the process. And also, if they’re chosen by us, they [are more likely to get chosen] through the city. And the reason is that people who work with us go through our Equity Toolkit and Training Program.
Where does One Fair Wage get the funding for this program?
There were a lot of funders who wanted to support our relief efforts. Some gave to the Emergency Fund, some were very interested in the High Road Kitchens program, because it accomplishes many things at once. It hires people, it feeds people. But more importantly, it shapes the industry to be more resilient and equitable going forward. We also got a significant grant from the Robert Wood Johnson Foundation to support the effort in New York.
Is $35,000 going to be enough to help a restaurant re-open?
We did less in California—between $15,000 and $25,000—and it allowed restaurants to re-open. They’re not using the money to pay all their rent and pay off their debt. They’re using it to get inventory, bring back some workers, and re-open with takeout and delivery in a way that allows them to re-engage with their customers and get back on their feet.
Once the restaurants are all signed up, we’ll be doing events and promoting the hell out of them. Given the moment, there’s so much desire among consumers to support restaurants that are committed to racial equity, so I have no doubt that the restaurants participating will get a lot of extra business.
How will One Fair Wage and/or the Mayor’s office know whether these restaurants actually pay $20 an hour now and $15 an hour in the future?
In California, we do regular audits of the restaurants asking for reports on their payroll and their wages, and also talking to workers. We’ll be doing that every month for five years to make sure everybody goes to one fair wage. And if the restaurants don’t comply they won’t be eligible to apply for any future city programs.
Obviously, 100 is just a small fraction of New York City’s 26,000 restaurants. Is the hope that this program will inspire good practices throughout the industry?
Yes, exactly. The leader of an independent restaurant association is planning to move to one fair wage without the [grant] money. And there are other restaurants that are planning to do the same thing. We just have to fix this tip-sharing rule at the state level to allow everybody to … create some equity between front and back of the house as well. With some strict prohibitions against employers taking any portion of that.
Critics say that restaurants can’t afford to pay $20 an hour, especially now when so many have fallen into debt due to the coronavirus. What do you say to that?
We’ve had 31 restaurants sign up through us. So the idea that people don’t want to do this is factually incorrect. This money helps people get back on their feet! So I would turn the question back on them: How could these groups [the New York State Restaurant Association and the New York City Hospitality Alliance] look down on free cash grants to restaurants? The only reason they are condemning it is because they know as well as we do that this is the first step toward winning this as policy in New York state. I think it’s important for everybody to raise the question: If these people really represent small business, how could they condemn a free cash grant program?
One of our High Road restaurant owners—when she saw this response from Hospitality Alliance—she forwarded me a quote [from the statement Mississippi issued when it seceded from the Union before the Civil War]: “Our position is thoroughly identified with the institution of slavery—the greatest material interest of the world. Its labor supplies the product which constitutes by far the largest and most important portions of commerce of the earth. . . . These products have become necessities of the world, and a blow at slavery is a blow at commerce and civilization.” This is how they’ve responded for 200 years when change is imminent: They claim there is no way we can make change.
And my God, if there’s any moment to think about change, it’s now. Even I was skeptical that we could do anything in this moment. It was restaurant owners who were like, “No Saru, this is exactly the right the time—we’re all closed, we’re all rethinking everything. This is the right time.”
This article was updated to correct Saru Jayaraman’s title as president of One Fair Wage, not executive director.