$2.13 Is the Tipping Point - America's Food Servers Are Grossly Underpaid

The following is an excerpt from Saru Jayaraman's new book, Behind the Kitchen Door (ILR Press, Cornell University Press, 2013). 

Right now, earning $2.13 per hour, I don’t have enough for my kids, I can’t put them through college. I barely have enough to put food on the table.
—Server, Man, New Orleans

I’m not even worth one cheeseburger an hour.
—Busser, Man, Six Years in the Industry, Chicago

We don’t usually think of food service workers as poor, if we think of them at all.

I used to be a bad tipper. Even though I ate out frequently, I didn’t understand what tipping really meant. Part of me resented the whole idea. Weren’t servers being paid for their jobs? Why did I need to pay more than the price of my meal? Wasn’t service part of the menu price? I worked hard for my money, and eating out was a guilty pleasure, so feeling compelled to leave something extra just didn’t seem right. If I left $5 for a $40 meal, I felt good about myself.

It  took me years to understand how tipping really works. First, I learned that my $5 is shared by many different people: the waiter who takes my order, the runner who brings out my food, and the bussers who clean my table and refill my bread basket and water. In some restaurants, the waiter has to ask a bartender to prepare the drinks, and a barback may assist. In the finest fine-dining restaurants, a captain greets customers and oversees the service they receive. All those workers get a piece of my $5.

Here’s the worst part: the federal minimum wage for tipped workers is $2.13 an hour. That means the federal government permits restaurants nationwide to pay tipped workers an hourly wage of only $2.13, as long as the workers’ tips make up the difference  between  $2.13 and the federal minimum hourly wage of $7.25. If the tips do not cover the difference, the employer is supposed to pay it. In 32 states, the tipped minimum wage is actually higher than the federal tipped minimum wage (e.g.,$2.65 or $4.25 an hour), and in 7 states the minimum wage is the same for tipped and nontipped workers.1 However, 13 states operate under the federal tipped minimum wage of $2.13, and another 8 states have a tipped minimum wage of less than $3.00 an hour. Thus, 21 states—almost half of the United States—allow restaurants to pay their employees less than $3.00 an hour. In several of those states, there is no state minimum wage at all. That means some restaurants in these states can get away with not paying their workers anything! As long as these restaurants bring in less than $500,000 in revenue annually (and therefore don’t fall under the purview of federal law), they can force their workers to live entirely off their tips.

The system is further complicated by the rules governing who gets a share of the tips. In a restaurant that complies with the law, the only workers taking a share of the tips are the nonmanagerial employees, who interact directly with customers. Ideally, a waiter collects tips from his or her tables and distributes them among the employees described above. In a “pooled house,” the waiter puts all of his or her tips into a pool, and at the end of the night, all of the tips in the house are distributed among service employees using a point system—five points for captains, four points for waiters, and three points for runners, for example. In a “nonpooled house,” the waiter collects his or her tips and then, using a percentage system, “tips out” the runner, bussers, bartender, and others at the end of the night.

However, many restaurants break the rules, allowing managers to take a share of the tips. Thirteen percent of workers nationwide report that managers regularly steal tips. Some workers report that they’ve been forced to turn over all of their tips to management, and they’ve received a flat rate, or “shift pay” (also illegal!). Workers who work banquets or special functions in restaurants frequently complain that “service charges”—the “gratuity” charged to customers—disappear at the end of events; these workers end up receiving a flat rate for their work, without any knowledge of how much gratuity management collected.

When I began organizing restaurant workers, I knew that restaurant workers were poor, often living below the poverty line. I understood the basics: some workers don’t receive the minimum wage, some don’t get proper overtime payments, some don’t receive pay for all the hours they’ve worked, and some get paid late or not at all. Some are even charged for things that aren’t their fault, like a guest walking out of the restaurant without paying the check. Most of us have heard about the plight of fast-food workers in the United States, and it’s not surprising when cheap chain restaurants pay their workers poverty-level wages.

I also knew, however, that the restaurant industry laid claim to some “shining examples,” restaurant owners who wanted to abolish poverty-level wages and offer workers a decent standard of living. Jason Murphy and Ben Hall, an unlikely pair of longtime friends and former dishwashers, are shining examples of employers who not only pay their workers a living wage but also offer raises, IRAs, and health insurance and have a commitment to diversity. They own the Russell Street Deli, a bustling, profitable sandwich and soup restaurant in Detroit. Later in this chapter I’ll tell the story of how Jason and Ben have shattered expectations, going from dishwashers to restaurant owners, and built a business using social justice principles.

Still, fair and equitable labor practices are extraordinarily rare in the restaurant industry. Restaurant workers hold 7 of the 10 lowest-paying occupations in the United States, earning less, on average, than farmworkers and all other domestic workers.4 Although the industry has grown steadily over the last 20 years, restaurant workers continue to earn significantly less than workers in almost every other industry. In 2010, the median wage for restaurant workers nationwide was $9.02 an hour, including tips—a wage that leaves a family of four below the federal poverty line.5 In 2009, restaurant workers made, on average, $15,092. Workers throughout the rest of the private sector made, on average, $45,155.

All of this probably sounds confusing because it is confusing. The minimum wage system for tipped workers is totally dysfunctional. It’s a system that permits and even encourages employers to underpay their employees, and forces us, the consumers, to try to make up the difference.

The American Dream at $2.13

Claudia, a former low-wage worker in a national pancake restaurant, is a slender, young Mexican immigrant with big brown eyes and long black hair. She laughs often and loves kids. She’s also one of the smartest people I know. She reads voraciously and is an articulate, outspoken advocate for the needs of workers. Thus, I was really surprised when I learned that at one point she had not been able to speak up for herself or her coworkers. In fact, it worried me. If someone as brilliant and articulate as Claudia had not been able to speak up against exploitation, how could we expect anyone else to do so?

Claudia is from the foothills of Monterrey, Mexico. “I was the youngest of nine kids,” she says. “My mom didn’t finish second grade, and my dad only made it to third grade. But my parents always told me, ‘You want to be something, you have to go school.’ We weren’t a poor family—I never went hungry or had to quit school to work—but we definitely struggled financially.”

Before Claudia was born, her mother became friends with an American woman who was living in Mexico. The friend would often do her grocery shopping across the border in Texas, where groceries were actually cheaper in bulk. “My mom’s friend told her there were people in Laredo giving out tourist visas for Mexicans to visit the United States,” says Claudia. “She took my mom to the border.”

A group of university students greeted Claudia’s mom in Laredo and asked her why she wanted a tourist visa. “She said she had to buy groceries for her large family,” says Claudia. “It wasn’t an office, just a group of university students at a booth who gave my mom a pink visa that didn’t have an expiration date. A month later the visa came in the mail.” Claudia’s mom got the whole family tourist visas this way. It was the 1970s. Immigration policies were more relaxed back then.

Claudia remembers a difficult, lonely childhood. “My dad was security guard for a newspaper,” she says. “My mom had nine children. She was from a very, very poor background. She didn’t even have shoes until she was in grade school. She was a devout Catholic, and she believed in having lots of children. She could sew very well, so she made dresses to sell and some for us. I remember my parents working, always working. There was a room in the house just for the sewing machines. I hated those machines because my mom was always with them. I had eight much older brothers and sisters, and they were all always working too.

Sometimes Claudia’s mother would take her along on grocery shopping trips across the border. “I thought, Everybody’s rich here. Wow. People have everything!” says Claudia. “I was always in awe of the United States. I remember when I was growing up, six or seven years old, Wal-Mart started coming to Mexico, and then Sam’s Club, OfficeMax, all these American stores. I have very vivid memories of my brothers-in-law working for American companies. It felt like America was moving into Mexico.”

Claudia struggled through elementary school. “The teachers were telling my mom that I was very smart, but I had a behavior problem,” she says. Outside of school she got into trouble as well. She stole fruit from neighbors’ trees out of boredom. “I would always be walking along the street, chewing stolen fruit,” she says. “I didn’t have any guidance. My brothers and sisters were two to three years apart in age, but I was eight years younger than everyone else. My mom was a great, loving mother and would make sure I ate, but she didn’t have time for anything else. I was very lonely and angry. I remember loving school, but I didn’t care about my homework, and that came from being angry.”

Things changed somewhat when Claudia’s school started a literacy program for parents and their children. Claudia’s mother would go to school with her to read and write. “I was a little older, doing very well in school,” says Claudia. “My mom and I became close. She wasn’t working as much by the time I was 10, and my dad retired. When my mom started reading and writing, she spent more time with me.”

Claudia finally got the time with her mom that she had craved. So it was especially hard for her when she found out a few years later that her mom had a brain aneurysm and would have to stay in the hospital. Claudia ended up at home alone again. Her eldest sister, whose infant daughter was born with heart issues, had left for the United States; she knew people in Austin, Texas, and so she moved there using the tourist visa her mother had acquired for her years before. Claudia’s sister’s husband had lost his job—but really, no job in Mexico would have paid for everything necessary to keep their baby girl alive. Another sister moved to Austin when her husband, an architect, lost his job; she and her husband started working in restaurants when they arrived in Texas, despite having degrees and professional experience.

Claudia began high school with her mother still in the hospital and many family members gone. She spent most of her time alone in the house in Monterrey. The neighborhood was changing, with drug-related crime on the rise, and soon she didn’t even feel comfortable being there. One night someone broke into the house. Another night someone broke into her second-oldest sister Lupita’s car. Claudia knew she had to do something. She would be graduating from high school in two years and didn’t have money for college. When Lupita lost her job as a graphic designer, she suggested to Claudia that they leave Monterrey to join their older sisters and brothers-in-law in Austin. “My sister said, ‘Let’s go for three months, save money, and come back,’” says Claudia. “But we didn’t. We stayed.”

Claudia was 15. She and Lupita arrived in Austin and stayed with their fifth-oldest sister, Carolina, who lived in a studio apartment with her husband and three children. Carolina didn’t work, but she cooked delicious Mexican meals—sopes, enchiladas, and more—for the household and took care of her three kids. After dinner, Claudia helped Carolina’s kids with their homework before she started her own. Carolina knew she couldn’t stay home for long with two additional mouths to feed. She was also exhausted from watching the kids and cooking for everyone. When Carolina found two jobs, Claudia had to start coming home right after school to watch the kids and everyone ate frozen food, Hot Pockets, and frozen pizza rolls.

The adults were not home much during the week, but on weekends the apartment overflowed with people. Carolina invited her other sisters and family to join them for weekend meals. “We wanted to re-create our life back in Mexico, where everyone would show up at our parents’ house and eat the delicious meals our mom cooked,” says Claudia. The kids played outside on a tiny lawn while the women cooked lunch and talked about life. The men watched soccer on television. “At some point we would all play Loteria, the Mexican version of Bingo,” says Claudia. “Carolina’s mixed tapes would be playing in the background.” Carolina’s tapes mixed Mexican and American music. “There’d be a ranchero song, then Madonna, then a salsa song, then Michael Jackson,” says Claudia. The music reflected their hybrid life.

Of course, it was also a tough life in Austin. The studio apartment had a loft; Carolina, her husband, and her three children all slept there. Claudia and Lupita slept on couches on the lower level of the apartment. “We kept all of our stuff in a closet in the loft, which was hard because the kids would always play with our things, and we could never find anything,” says Claudia. It was nice to be close to family, but seven people in one studio apartment naturally led to arguments and general discomfort.

Claudia also had a tough time in school. Americans were not as welcoming as she’d imagined. “For two months I would cry every single day,” she says. “I didn’t know English, and I was thrown into high school. I hated it. I wasn’t welcomed like I thought I would be. It was a harsh reality: Americans didn’t like me as much as I’d liked them in Mexico. People were mean. But my sister Lupita found a guy and fell in love one month after we got to Austin—a black guy she’s still with. She told me,
‘We have a real chance of remaking our lives.’” Claudia didn’t feel that hopeful, but as a minor she had little choice but to stay.

Lupita worked multiple jobs to contribute to the household and enable Claudia to focus on school. Once Claudia realized that she wasn’t going back home to Mexico, she decided to make the best of her life in Texas. “I just got used to the idea that I was going to have to live here,” she says. “I started studying hard, made friends, didn’t have much choice. My sisters were always at work. Everybody worked. There were times when I’d have to walk to school and back, really far. I decided I’d go to the library and stay until Lupita could pick me up from work. I started getting involved in extracurricular activities to kill time, because I was lonely. I didn’t want to ruin my life.”

Claudia wanted to fit in and have white American friends, maybe even be a white American. “I wanted to join the dance team, but it was very costly to do that,” she says. “I knew I wouldn’t be able to ride the bus, go on field trips. I knew I needed a job.” A classmate told her that a national pancake chain was hiring, and so Claudia decided to apply.

When Claudia walked into the restaurant, she immediately noticed that all the servers were attractive women. Her friend introduced her to the manager, who quickly agreed to hire Claudia as a server. Claudia hesitated to accept the position because she couldn’t speak English fluently. “I said, ‘Shouldn’t I do something  else?’ He said, ‘No, you can serve Latino customers.’ But that didn’t happen,” says Claudia. “The customers would say very mean things, like, ‘We don’t want you as our waitress.’ I would pretend like I didn’t understand.”

There was another problem: many customers wouldn’t tip her. She was earning $2.13 an hour, the minimum wage for tipped workers, and working 30 to 40 hours a week. Her tips never made up the difference between the minimum wage for tipped workers and the full minimum wage of
$7.25, and the restaurant manager chastised her for it. “We’ll have to pay this difference,” he told her, referring to the federal law mandating that employers pay the difference between the lower minimum wage for tipped workers and the regular minimum wage when workers’ tips don’t cover the difference. “The restaurant told us we had to make the money up in tips or get in trouble,” says Claudia. “The manager said, ‘If you don’t make enough tips to make up the difference [between the tipped minimum wage and the regular minimum wage], you have to report that you made that money anyway.’ He told me to report tips I wasn’t making, so that the company didn’t have to pay the difference.” Since Claudia was a teenager and new immigrant, she accepted this. Besides, she wanted to join the dance team and couldn’t afford to without her job.

Claudia’s family continued to struggle financially. Both her brother-in-law and Lupita worked as cooks at a restaurant, and Lupita had a second job at a newspaper. Every day they drove 50 minutes to earn minimum wage in a restaurant. Although they worked 50 to 60 hours a week, they could barely afford the gas it took to get to their jobs. Claudia’s brother-in-law, the architect, still works in that restaurant.

Getting through School as an Undocumented Immigrant

When Claudia was about to graduate from high school, she realized that she didn’t even know whether undocumented people could go to college. She found a guardian angel, Alejandra, who helped her explore her options. Alejandra worked for the Austin Independent School District. “She was the immigrant person for the district,” says Claudia, “and she was really open about that stuff. I started going to her office based on a flyer that said if you don’t have papers, come talk to her.” Alejandra encouraged Claudia to get involved with local advocacy groups for immigrant students in Texas. She explained that many undocumented students in Texas end up having to pay out-of-state tuition for college even when they have spent their whole lives in Texas. Out-of-state tuition was often double or triple the cost of in-state tuition, making college impossible for thousands of immigrant students. Claudia got involved, participating in many lobbying events in the state capital.

Alejandra also told her about a special program at Prairie View A & M University, a historically black college about 20 miles from Houston. The university’s president, Charles Hines, was sympathetic to the struggles of new immigrants and committed to making sure that undocumented students could receive a college education. The university offered a summer preparatory academic boot camp to any graduating senior interested in Prairie View. The top three students at the end of the summer received a full scholarship to the four-year college. Alejandra encouraged Claudia to attend.

Claudia, however, didn’t want to go to an academic boot camp; she wanted to go on a trip to the beach with her high school friends. She also didn’t want to go to a historically black college in the middle of Texas. “I talked to my family about it, like, ‘What am I going to do in the middle of Texas, with all black people?’” she says. Claudia hadn’t seen black people before coming to the United States. Lupita’s partner was African American, but Claudia and her family still harbored a lot of anxiety about black people. Plus, after feeling the pain of being different as a new immigrant, Claudia had worked hard to become an “all-American girl,” joining the dance team with her mostly white high school friends. Nevertheless, Alejandra pushed Claudia to go to Prairie View. She told her she could go on a beach trip anytime and said the Austin school district would cover her $300 tuition. Claudia agreed to give the program a chance.

That summer happened to be the fiftieth anniversary of the Brown v. Board of Education Supreme Court decision. The Prairie View administrators decided to honor the occasion by taking students on a tour of historic sites of the civil rights movement. Claudia saw the bridge in Selma, Alabama, where protesters were attacked with fire hoses. She saw places in Mississippi and North Carolina where thousands marched for freedom and equality. “I got excited,” she says. “I started learning about the history of oppression in this country. I had been experiencing it, but I didn’t know. In Mexico I didn’t think of America as oppressive. I thought of it as a place of opportunity. But in Austin I became really aware of who I am and where I fit in this country. I remember learning that my school had been a plantation. There was a slave grave at school. In Selma, I got to meet the people who had walked on the bridge. After that trip, I started studying harder to be able to attend the school.”

Something long dormant in Claudia was awakened during the trip to historic civil rights sites. Her immigration experience took on new meaning. She became a lot more interested in attending Prairie View and started studying to compete for a college scholarship. She knew she wouldn’t be able to attend college otherwise. “I was talking to my family as I was learning about the civil rights movement,” says Claudia. “And I told them, ‘I have to understand their history. I really want to go to college.’ My sister told me, ‘I didn’t have the chance to go to college, so I will keep my two jobs to support you.’” Claudia’s mom, now recovered from the brain aneurysm, decided to come to Texas on her tourist visa for Claudia’s graduation from the summer academy. “I didn’t know I had won the scholarship,” says Claudia. “My mom came for my graduation, and when they announced that I’d won, my mom was crying.”

Still, Claudia thought she’d have to turn down the scholarship when she found out that it didn’t cover living expenses. She couldn’t afford to live on her own. Once again, though, Alejandra came to the rescue. She spoke to a university administrator about Claudia’s situation, and the administrator invited Claudia to live with her and her husband.

College was a dream for Claudia. She became a leader on campus, organizing her classmates in support of the DREAM Act, which would allow undocumented students nationwide to go to college, and other racial justice issues. After the hanging of nooses and other race-baiting actions led to physical violence at a high school in Jena, Louisiana, Claudia organized two busloads of students to rally in support of the “Jena Six.” At one point someone contacted Claudia about an exciting community-organizing internship opportunity in Washington, D.C. “Alejandra had always wanted me to work with the community,”  says Claudia. “I was so excited when I heard I got the internship. Two days before I was to go—when I had already purchased my ticket—they called me to say that they had talked to their lawyers and couldn’t hire me. It really struck me. I was heartbroken. I cried. In this country even when you want to do something good, sometimes you can’t.”

Nevertheless, Claudia managed to do a tremendous amount of community-organizing work during college. She even spent one of her summers interning with Interfaith Worker Justice in New Orleans, helping to support immigrant workers who had been recruited to work for minimal wages after Hurricane Katrina. She graduated from college with flying colors and had high hopes of attending law school and continuing to advocate for the rights of the oppressed. However, she quickly realized that her options were still very limited. She didn’t know of a law school that would accept her as an undocumented immigrant, so she decided to stay at Prairie A & M to earn her master’s degree. Since she no longer had a scholarship, she also needed to come up with money for her food, gas, rent, and other living expenses.

She decided to apply for a job at the national pancake chain once again—this time in Houston.

Flirting for Food

Claudia became the only Latina server at the Houston pancake house. There were four white and two black servers working with her, and business was slower in this restaurant than in the Austin establishment. White servers were almost always chosen over Claudia and the black servers to work banquet events—the rare parties that pulled in higher-than-average tips.

Once again managers also forced Claudia to report more tips than she actually earned. They didn’t want to have to pay her the difference between $2.13 and the minimum wage of $7.25. In addition, they never paid her overtime. “I would have to work off the clock,” says Claudia. “They told me to clock out before doing side work. I was always scheduled to work 5:00 p.m. to 12:00 a.m., and exactly at midnight, even if I hadn’t finished clearing tables, I had to clock out. Sometimes I’d stay two more hours. Late at night they’d only keep one or two people, and we had to do all the side work: make silverware packets; clean coffee pots, orange juice pots, and the soda machine; refill the butter, syrup, and ketchup; make sure the syrups were in alphabetical order, all filled up. The tables had to be left spotless. I had to refill the sugar, salt, and pepper. I had to make sure the supply room was clean, organized, and everything labeled. I had to make sure the stockroom was refreshed, and cut lemons myself.”

Worst of all, the managers forced Claudia to translate their nasty comments to the Latino bussers and dishwashers. “When the managers were mad, they’d take it out on bussers and dishwashers, and they’d make me translate all the horrible things they were saying,” says Claudia. “The workers would cry when I told them they were being sent home. I would apologize and feel horrible. They would say, ‘Please don’t send me home. I need to make this salary.’ I would say, ‘I’m sorry, that’s what they’re making me tell you.’ They saw me as a sellout. I knew that this was the only job I could get, and the only one they could get. The managers would take the most vulnerable people and take stuff out on them when things were going bad. It was inhumane, horrible, how they treated them.” Although Claudia was a firebrand at school, she somehow could not bring herself to advocate for these workers on the job. She told herself she really needed the money, and tried hard to ignore the pleas of her Latino coworkers.

Claudia made about $30 to $40 a day in tips, working five to six days a week. The $2.13 she earned in wages amounted to a weekly paycheck of about $10.00 after taxes. So, in total, she earned about $150 to $200 per week. She used that money to pay for books, car payments, gas to drive the 20 miles to Prairie View, and other living expenses. She would have been homeless had it not been for the university administrator who gave her a place to stay. Sometimes Claudia had to choose between going to school or to work. “I remember having to make the choice, ‘If I go to work today, I can afford to go to school tomorrow,’” she says. “Half of my income every week would go to gas. I definitely couldn’t afford to get sick.”

She was also hungry all the time. She couldn’t afford food and tried to survive on pancakes she ate at the restaurant. “I had to eat less than $6.50 for the employee meal,” says Claudia. “If I wanted an omelette, I went over $6.50. I could only afford pancakes. If you were on the schedule for only five hours, you couldn’t get a meal. There were days when I wouldn’t eat all day.”

She was a food service worker who couldn’t afford to eat.

At times Claudia and other waitresses would try to get food from the cooks. “When we were really hungry, we would flirt with the cooks to get food,” she says. “Sometimes we wanted shrimp, but they wouldn’t let us eat it even when it came out bad. The cooks were all Mexican, so I would put on makeup and make jokes that only Mexicans would know. I was really hungry! They would ask me for my number, and I’d say, ‘Can I have three pieces of butterfly shrimp?’ I’d give them a fake number, so later they’d ask me why I lied. I’d just tell them, ‘I have to eat!’”
To make matters worse, the restaurant required servers to bring $20 each night as their “bank” so they could make change as necessary for guests. Claudia had to scrimp and save to bring the $20 every night; sometimes she asked her family to lend her the money. If she didn’t have the $20 when she got to work, she had to ask the manager to change larger bills given to her by customers requesting change, and she’d get in serious trouble.

On the weekends the restaurant stayed open 24 hours. One extremely slow weekend night a manager asked Claudia to roll silverware in napkins for two hours. This meant that she got only one table to serve. She knew she wouldn’t make any tips this way—she’d make little more than $2.13 an hour—and she’d still be asked to report that she made the minimum wage of $7.25 in tips. Meaning, with taxes, she’d have worked for free. After two hours, Claudia approached the manager and said, “I’m done with the silverware, and other servers are getting tables. Can I serve another table now?” The manager got upset with Claudia for asking this question and berated her on the dining floor. Customers watched. The manager then told her to punch out and go home, and to tell the customers at her one table that someone else would serve them. When Claudia relayed the message to the customers, they asked to speak to the manager. They were upset by the manager’s treatment of Claudia. This only enraged the manager further. She then accused Claudia of telling the customers about their exchange.

The manager realized that having three servers on a weekend night didn’t work, and so the next weekend she asked only Claudia to work— but it happened to be the night of a football party. “I was alone on the floor for four hours,” says Claudia, “and some people walked out without paying their bill. That night I had to stay until 7:00 a.m., and then come in the next morning at 10:00 a.m. I told the manager someone had walked out, and she said, ‘We’ll take care of it at the end of your shift.’ But at the end of my shift, new people started coming in. The manager told me to clock out and then do my side work. Then she talked to me about the people who walked out. They owed a bill of $98. ‘Why did they walk out?’ she asked me. I told her, ‘Because we were busy. I was the only person on the floor.’ She told me that it was my fault, and that I’d have to pay the bill. I had made $80 in tips that night. So after tipping out the busser and the dishwasher, the manager took all my tips and told me I still owed the restaurant $18. I had worked from 10:00 p.m. until 9:00 a.m.—though I had clocked out at 7:00 a.m.—and instead of paying me anything, they were telling me I had to pay them.”

At that point, Claudia quit. “I felt like I was being robbed,” she says. She walked out to her car in the parking lot and cried.

Stolen Wages

Not long after Claudia quit working in the pancake restaurant, she got a phone call from the supervisor of her college internship in New Orleans. The Restaurant Opportunities Center of New Orleans (ROC-NOLA) was looking for an organizer to fight for the rights of workers in New Orleans’s growing restaurant industry. Claudia jumped at the opportunity to interview.

I remember interviewing Claudia over the phone from my house. At the time I was living in Oakland, California, and I had just had my first baby. I interviewed her with my infant daughter lying by my side. I could hear the excitement and passion in her voice, her commitment to fight for people like her family members still in the restaurant industry. I offered her the job almost immediately, and she accepted almost as quickly. That week she threw her stuff into her old, beat-up car and drove across the state border to start a new life as an organizer.

When Claudia joined ROC-NOLA, a new campaign was just getting started. Several workers, including Thomas from chapter 3, had come forward from Tony Moran’s, a fine-dining restaurant in the heart of the French Quarter, right on Bourbon Street, to protest wage theft and discrimination. White workers at Tony Moran’s were serving customers on the ground floor; black servers were being sent upstairs to serve the few customers who ventured to the upper floors to eat. Some of the black workers had also been asked to live in apartments owned by the company on the top floor of the restaurant; the apartments resembled “servants’ quarters” of the old South. For years the workers had been terrorized by the owner, who carried a Taser and had a team of large bodyguards known for beating up workers who complained. A few of the workers had finally had enough, and although they’d previously told ROC organizers that they would never be able to fight the injustice at Tony Moran’s, they found the courage to step forward. They were shocked to learn that wage theft affects over 50 percent of restaurant workers nationwide. In addition, almost half (45.5%) of all workers surveyed by ROC report that they have been denied proper overtime payment, and one-third report working “off the clock” without pay.7 Managers regularly ask these workers to end their shift early and continue working, or, as one bartender who has been in the industry for eight years explained it, “clock out and have the company make money off us.”

As soon as Claudia came on board at ROC, she helped double the number of workers willing to speak out against Tony Moran’s management publicly. She also helped organize a number of powerful, creative demonstrations in front of the restaurant, including prayer vigils and a “funeral march” through the French Quarter to draw attention to workers’ rights. Workers from several other restaurants started coming to the ROC-NOLA office to seek justice in their workplaces as well. They buzzed about the protests, the first of their kind in the French Quarter.

At one point Claudia was invited to speak at a conference of the National Lawyers Guild. She found herself addressing several hundred lawyers from around the country. “At first I felt a little nervous, addressing a crowd of that kind and size,” says Claudia. “But after I started to talk about the injustices the workers were facing, I really started to warm up. I talked about the struggles of Tony Moran’s workers, and how we had come so far with our campaign. But I was also thinking about all those years of serving pancakes, and all those things my sisters and my brothers-in-law went through.” The audience responded with rousing applause, and that evening 200 lawyers showed up at Tony Moran’s to support the ROC campaign. Under Claudia’s leadership, the lawyers held a spontaneous sit-in at the restaurant, demanding justice from the owner. Claudia later told me, “That was my proudest moment.”

The sit-in was too much for the company. Tony Moran’s management called Claudia and requested a meeting to resolve the campaign. In the months that followed, Tony Moran’s management agreed not only to pay the workers but also to institute an employee handbook that ROC-NOLA created with the workers’ input. The handbook guaranteed a new, transparent promotions policy, a grievance procedure, and much more.

Claudia, for her part, has gone on to advocate for restaurant workers and immigrants nationwide. Her family members, all of whom still work in restaurants, are counting on her. Her family never hoped or planned to stay in the United States. Claudia’s sister and brother-in-law even made payments on a house in Mexico for several years, hoping to return at some point, but when the payments increased, they had to sell the house. They’ve stayed in the United States far longer than their tourist visas permitted and are now undocumented workers. New immigration laws have eliminated any chance they might have once had to obtain citizenship.

Claudia believes that her experiences in the Houston pancake restaurant forever changed her perspective on the plight of restaurant workers in the United States. “You know, I think my experiences in Austin hadn’t shown me what working in the restaurant industry is like for many people,” she says. “But working in Houston definitely showed me. In Houston there were a lot of older people—women in their fifties. They had children, families. Some were single mothers. It became more real. People were always really bitchy and feisty. For them, this was it. This was their job. For me, I was in college. I knew there’d be something else eventually. For them, this was everything they had. When a table was not assigned to them, they took it personally. They got in your face about it. They had families, and $2.13 plus tips was all they had for themselves and their families. It really opened my eyes. It was Latinos cooking, white women working graveyard shifts, men working days. I saw the racism, sexism, and low wages in the industry. Everything I remember from that place was horrible.”

Living Hand to Mouth

Workers who are already living hand to mouth can’t afford to deal with late or stolen wages. Some workers, like Thomas (see chapter 3), end up homeless because of wage theft. Other workers, like Claudia, barely survive. Those who are American citizens often qualify for food stamps. This, however, sheds light on a discomfiting irony: Food service workers in the United States need food stamps! In fact, servers in the restaurant industry use food stamps at almost double the rate of the rest of the U.S. workforce.

Should taxpayers really be subsidizing the restaurant industry, which is growing so rapidly, to allow its employees to eat?

Claudia worked in a family-style or franchise restaurant, a step above fast food, and so it’s not surprising that she didn’t earn a living wage. In fact, more than 80 percent of all food service workers, even waiters in big cities, don’t earn a living wage (taking into account basic needs such as rent, food, transportation, child care, and health care). Most restaurant workers can’t even afford to pay their rent. According to the National Low Income Housing Coalition (NLIHC), the fair market rent for a two-bedroom unit in the United States is $959. A full-time restaurant worker, working 40 hours per week, would have to earn $18.25 an hour to afford the two-bedroom unit.

ROC data show that 8 out of 10 restaurant workers nationwide earn less than this. The average restaurant worker, earning the national restaurant median wage of $8.90 an hour, would have to work approximately 107 hours per week to rent a two-bedroom unit at the fair market price.

Not surprisingly, some white men who are servers in fine-dining restaurants are the only restaurant workers in the United States who generally do earn a living wage; they hold the second-highest-paying position in the restaurant industry.  Still, being a white waiter in a fine-dining restaurant doesn’t guarantee a living wage. In my early days as an organizer of restaurant workers, I had no idea that even white men who are servers in some of the fanciest restaurants in the United States end up on food stamps and suffer through periods of homelessness.

Mike Morganroth’s story served as a reality check. Mike lives in Detroit and is among the many white servers in fine-dining restaurants who live in poverty.

I should note that I found Mike’s story particularly compelling because it takes place in Detroit, a city that has almost developed a reputation as a lost cause, the bottom of the barrel among American cities. People don’t usually think of Detroit as a happening place; they think of its poverty, segregated neighborhoods, and dying auto industry. Detroit is a tough city, and it’s a poor city, with one of the largest income gaps between black and white households of any urban center in the United States.13 However, I’ve been amazed and intrigued by what I’ve seen in Detroit. I’ve been introduced to people and restaurants there that shatter all stereotypes of the city. Some of ROC’s most energetic, dynamic members come from Detroit. I also count a handful of Detroit restaurants among our nation’s most vibrant, innovative, progressive establishments.

Mike is an athletic guy in his mid-thirties. He has dark brown hair styled in a military buzz cut. He has a serious look, but every so often he shows one of his tattoos or tells a joke that reveals a different side of his personality. He is also the primary caretaker for his mother, who struggles with mental illness. He wants nothing more than to have a family of his own, but the economics of having kids—and his mother’s situation—discourages him. He lives with his mother, saddled by debt. “If I had a one-bedroom house, I’d let my kid sleep in the living room,” he says. “But I can’t even afford the gas to take a woman out for a date. I can’t afford a cover charge at a bar, or even a $1 drink. Women don’t want to walk up to my mom’s door. I’ve been to every free dating site in the world, but I haven’t been on a date in over three years. ... I don’t have high standards. At this point, I’m just looking for someone without a penis.”

Mike grew up during Detroit’s golden age, when the car industry was booming. “My dad was a car guy,” says Mike. “Cruising around town, he caught my mom’s attention. He used to show me pictures of him driving a Corvette. He was a young guy, but he’d just gotten his first job, in a Ford dealership.” Mike’s parents bought a house in Warrenville, just outside of Detroit. “Warrenville was a nice place,” he says. “Families would work nine to five and go to church on Sundays. It was a real community.” It was also incredibly segregated. “I remember when the first black family moved in,” says Mike. “People said, ‘There goes the neighborhood.’ There was the Mexican part of town, the black part of town, and still some white people left in town. Most people in the area had something to do with auto industry.”

Unbeknownst to Mike, things weren’t exactly right inside his own home. “When I was a kid, my mom was hospitalized a few different times,” he says. “I didn’t know she was trying to kill herself, although I always thought she had mental health problems.” His mother suffered from depression and repeatedly attempted suicide.

Mike’s parents finally divorced when he was nine years old. The good news, however, was that Mike’s father had obtained his dream job, testing vehicles for General Motors. “He was testing new vehicles in water and ice,” says Mike. “They sent him all over the world—Australia, Japan. He made $90K to $100K per year.”

Mike’s father bought a beautiful home in the suburbs and remarried, this time to his boss at GM. Mike moved in with his father and stepmother, both of whom worked almost all the time. He saw his father only every so often. “I was lonely growing up in a house in the country all by myself,” says Mike. “I had to learn to cook for myself or I wouldn’t be able to eat. I learned through trial and error, ate lots of burnt food. By the time I was 12, I could make a complete breakfast. At first I would burn everything I touched, but over time I got to really enjoy cooking.” He dreamed of becoming an executive chef.

During high school, Mike took an interest in sports. He practiced all summer long and tried out for his school’s football team in ninth grade. He made the team, but his low grades made him ineligible to play. Feeling lonely and defeated, he started smoking pot and doing acid. “I had a reputation as the guy who could sleep through a hurricane,” he says. “I would sleep through school.”

Mike dropped out of school his senior year. His father insisted that he pay rent, so he started looking for a job. Since he remained interested in becoming a chef, he decided to take a job in a chain pizza restaurant. The restaurant mostly filled takeout and delivery orders, but there were some tables where people could eat if they wanted to stay. Mike started as a line worker, earning $4.75 an hour—the minimum wage at the time—but management recognized his intelligence and entrepreneurial spirit and promoted him to the position of general manager when he turned 18.

Mike had the potential to do very well in the restaurant industry, but his entrepreneurial spirit got him into serious trouble pretty quickly, and he fell even further off course. As general manager, he earned $450 a week, which seemed like a lot of money at first. He decided to move in with a friend in Flint, where the pizza restaurant was located, but soon he found that he didn’t have enough money to pay his bills. “The money I was making didn’t enable me to live,” says Mike.

At this point he figured out how to beat the system. The restaurant company’s regional management counted the number of pizza boxes the restaurant used each day to determine how much money should be in the cash register. Mike located the factory that produced the pizza boxes and offered the factory workers free pizza in exchange for extra boxes. He then sold pizza to customers in the extra boxes and pocketed the sales. In less than a year, he made $80,000 this way, but he also continued to increase his credit card debt.

The restaurant company eventually caught on but couldn’t figure out what exactly Mike had done. “The general manager called me in for a meeting,” says Mike. “In exchange for no prosecution, they asked me how I did it, so they could correct the problem.” Mike lost his job—carrying $20,000 in credit card debt—but he escaped criminal prosecution. The company ended up changing its accounting practices throughout the Midwest after learning about Mike’s embezzlement scheme.

Mike decided to try to get his life together. He went back to school and stopped using hard drugs. He graduated and looked into culinary school more seriously. “I looked into being a chef,” says Mike, “but it cost too much money. I felt like these schools were ripping me off.” His father and stepmother wouldn’t support him anymore, and no restaurant would pay him enough to cover culinary school fees.

At that point, Mike’s mom, still in Detroit, also needed support. Her mental health had deteriorated to where she needed an in-home caregiver. Mike moved back to Detroit to take care of her. She needed him, and he couldn’t afford to live anywhere else. “If I didn’t live with her,” says Mike, “she wouldn’t have a place to live—and I wouldn’t have a place to live either.”

Detroit looked nothing like the city of Mike’s childhood. “Big Auto” had left the region, leaving Detroit in ruins. Hundreds of thousands of people had left the city, and those who didn’t want to leave or couldn’t afford to leave lived mostly in poor, underserved neighborhoods. Mike saw many people who’d once held good jobs committing crimes and taking other desperate measures. “A family moved out down the street,” says Mike, “and the next day the windows were busted, and the siding had been taken off. You’d see a 40-year-old with an education asking, ‘Would you like fries with that?’ And uneducated people, who used to have decent jobs in the auto industry, were breaking into cars. Detroit had 1.7 million people when I was nine years old. Now it has 800,000.”

Given his skills, Mike was able to find a job in a popular family-style chain restaurant fairly easily. He started as a busser and was quickly promoted to server. Management treated him well. “Once they forgot to put the payroll in, so the district manager made a special trip to the restaurant to pay me,” says Mike. “They treated the employees fine.”

Mike began to truly enjoy restaurant work. He also enjoyed the camaraderie among the staff, who were white, black, Asian, and Latino. “We were a close staff, all poor, but we got along together,” says Mike. “At two in the morning, you’d see 30 of us hanging out in the parking lot.” As a server, Mike made $250 to $300 a week, and that was the most anybody in the restaurant made.

Mike worked for seven years in two family-style restaurants. He could barely afford gas and other bills, and he could never afford to leave his mother’s home and live on his own, but he was happy. He had a girlfriend. Things seemed to be going well.

Mike even thought he’d get his big break. One night he took his girlfriend to one of the finest restaurants in town. He wanted to impress her. The restaurant belonged to a large, multirestaurant company that served fine Italian food. During dinner, Mike observed the service. He knew that he could serve as well as any of the waiters there. “I knew I had enough serving experience,” says Mike, “so I tried to apply.” He felt motivated by his desire to make enough money to live on his own and still help his mother.

After multiple tests and interviews, the restaurant hired Mike as a server. He thought his days of poverty were over. He spent a month in training, shadowing more experienced servers, and during that time he was paid the Michigan state minimum wage—$7.40 an hour—for 40 hours of work per week. That gave him $296 a week before taxes, which was all right.

As soon as training finished, however, the company paid him the Michigan state minimum wage for tipped workers—$2.65 an hour, slightly more than the federal minimum of $2.13—and expected him to make the remainder of his wages in tips. The problem was that all of the “reservation tables” were given to certain servers whom management favored, and Mike and several others were left with “walk-ins,” the customers who happened to walk into the restaurant without a reservation. However, this fancy restaurant wasn’t in a heavily trafficked area, and it just wasn’t the kind of restaurant people walked into without reservations. Mike was lucky if he made $30 to $40 in tips each night. That meant that he made a total of $150, or a maximum of $200, per week, every week. Although he worked 50 or 60 hours a week, he took home $8 paychecks or slips that said “THIS IS NOT A CHECK.” His hourly wage of $2.65 was almost entirely eaten by taxes.

“I thought I would make more at this restaurant compared to others,” says Mike, “but I made less than half of what I made previously. The place is gigantic, too big considering the small amount of business. It’s a poor design. Management thought that if they filled the restaurant, we wouldn’t be able to take care of guests well. So they’d rather have 10 servers—which is like 4 too many—who can’t get enough work to make a living.”

Mike knew that the bussers were in an even worse position. The servers in the restaurant were mostly white; the bussers were mostly Latino. When the Latino bussers were hired, they received the full state minimum wage of $7.40 an hour, but then management announced that they could no longer afford the bussing staff and laid off all the bussers. “The restaurant had a live singer,” says Mike. “They were making all these new additions to the restaurant, and then saying, ‘We can’t afford this, we have to cut back.’” Shortly after that, they rehired a select few of the bussers and forced them to sign a document in which they agreed to be paid the lower minimum wage for tipped workers—$2.65—plus tips. That meant they would start earning about $140 a week.

Mike didn’t know how anyone could survive on less than $200 for 50 to 60 hours of work. These wages certainly weren’t allowing him to make ends meet. He couldn’t afford gas—then about $3.85 per gallon (1.5 times his hourly wage)—to get to work or to drive the 30 extra miles to a special wine training that the restaurant required all the servers to attend every other week. If he had been without the “luxury” of living with his mother, he would surely have been homeless; the cheapest rent he could find anywhere was $700 per month, which was almost his entire monthly salary. He couldn’t afford basic living expenses, even while living rent-free with his mother. “I had to ask a friend to move in with us,” says Mike. “He helped pay the bills. After relying on tips for two months, I had to start selling my belongings. I sold my stereo equipment and my spare car with gas in it. I was left with a car that had bad brakes.” Even then, it was hard to pay bills and have any money left for food, clothes, paying down his credit card debt, or having fun. He broke up with his girlfriend. And then another stroke of bad luck: Michigan had a bedbug epidemic, and his mother’s apartment was infested. The bugs started eating his flesh, but he didn’t have the money to get medical help, let alone buy a new bed. “I had to pay $85 for doctors to look at me and prescribe things I couldn’t afford,” says Mike. “I just took long, very hot showers to try to scrub the bugs out of my skin.”

Things seemed to spiral downward from there. Mike moved from restaurant to restaurant looking for decent work. Nothing was beneath him. “I took a job making pizza with 16- and 17-year-olds,”  says Mike. “I earned the minimum wage, which barely covered gas to drive half an hour to the restaurant.” When another restaurant hired him as a cook, he thought he could work his way up to chef, his original life goal. However, he soon noticed something was wrong. Having learned how to embezzle money from a restaurant at the tender age of 18, he quickly realized that the general manager was embezzling money from the restaurant. He told the owner, who fired the general manager and hired Mike as an interim general manager—but a few weeks later the owner hired a new general manager and fired Mike.

Mike continued to search for good work. “I was about to take a coffeepot to the bridge and start begging when my mom said she saw an ad for a restaurant job fair,” says Mike. “So I went. IHOP was hiring 20 people, and 550 people showed up to apply. I actually got a server position in the restaurant, and they treated me well. I turned things around for myself pretty decently.”

Despite all the difficulties, Mike says he takes great pride in restaurant work and feels sorry for his father who dedicated his life to General Motors only to be laid off about two years ago. “My dad was an engineer at GM, a big success story,” says Mike. “GM threw his life away. You work 60 percent of your life. If you’re miserable, the money you’re making is not worth it. You’re going to take out anger and pain on your family. I would rather be on my deathbed, have 18 to 20 people loving me, than to have a bunch of people go to a state funeral when I die.” Nowadays, Mike describes restaurant work as a labor of love. “I like the satisfaction of making someone smile,” he says. “I like helping people. In a factory you get no gratification from the machine. When you see some 16-year-old girl get surprised by 30 servers singing ‘Happy Birthday’ or a 90-year-old woman in tears on her anniversary, it feels great.”

Raising Standards—Taking the High Road

Of course, some employers do pay more than $3 an hour. They manage not only to stay in business, but also to become wildly successful. Jason and Ben, mentioned at the beginning of this chapter, have certainly built up a profitable, popular business without sacrificing the rights of their workers—and they’ve done it in Detroit! The story of how they transformed Russell Street Deli illustrates that employers can take the high road and benefit just as much as their employees.

Jason and Ben are the owners of the same restaurant in which they started as dishwashers, and both come from working-class families.
Ben’s father is African American; his family came from the South as part of the Great Migration. Ben’s mother is white; her family is from upstate Michigan. Both of Ben’s parents grew up in the city of Detroit. His mother worked as a server at the Playboy Club, where, on one of her shifts, she met Ben’s father. “I was more or less a happy accident,” says Ben. “I grew up mostly in the city of Detroit until the age of 12, and then we moved to California for a few years. I ended up coming back at the age of 19.”

As a mixed-race child, Ben noticed racial patterns in Detroit at an early age. “My dad was a bookie,” says Ben. “He’d have me on weekends, so he’d pick me up on a Friday night, and we’d go to bars and collect money all night. We’d go to places that were all black, and we’d go to places that were all white. There was no thought of integration.”

Ben attended four different high schools, and he learned to cope with constant change and financial challenges. The food industry, however, was a constant source of income for his family. “For a while my dad worked in the Eastern Market in Detroit, doing every kind of meatpacking job you can get fired from,” says Ben. “My mom always had two to three jobs. When she reached her mid-thirties, and they thought she was too old to work at the Playboy Club, she ended up becoming a diner waitress. But my mom has epilepsy. She had a seizure while working at Cracker Barrel, and they fired her for it. She didn’t sue them.”

Ben worked in many different restaurants throughout his teenage and young adult years. At one point he worked as a cook in an Italian restaurant in an all-white suburb of Detroit. “I was working in the back of the house,” says Ben. “It was always very clear—black people in the back, white people in the front. It’s a carryover from the era of segregation.” One day Ben noticed that a black prep cook was being instructed by his superior to cut off certain parts of a celery stem and throw them away. The owner walked in, noticed the celery stems in the garbage, and yelled at the worker, “You wouldn’t throw away the heart of a watermelon, would you?” He was referencing the old white American belief that African Americans have a weakness for watermelon—a stereotype from slavery days. Ben didn’t say anything. “It was beautiful how asinine it was, this overt type of racism,” he says. “It was a Mel Brooks, Blazing Saddles, kind of racism.”

Jason, who met Ben as a dishwasher at Russell Street, grew up in between Detroit and its suburbs. “I come from a very conservative Irish family,” says Jason. “My mother was a cashier at Burger King, and my father was a Detroit police officer. My father was an extremely racist person, and an extremely violent person. I don’t know why, but from a very young age I questioned all his beliefs. I thought he was so crazy. It was always, ‘nigger this, nigger that.’ I’d be thinking, You’re crazy. I don’t think you know what you’re talking about. He’d be beating my mom, and in the back of my mind, I was always going, ‘No.’”

Jason worked in 14 different restaurants while growing up. “My first job was at Big Boy at the age of 16,” says Jason. “I was a dishwasher, and then they made me the Saturday line cook. From 7:00 a.m. until noon I was to cook bacon. And then lunch would start, and I’d basically cook hamburgers for five hours. I remember the craziness of trying to fill the orders in the afternoon. Those people were not nice to work for. I remember washing a bunch of dishes in the dish sink on my second day of work. When I finished, I was standing there looking around, like, ‘What do I do now?’ No one had told me what to do next, and no one had given me permission to find something else to do. Then the owner walked in and said, ‘Why are you standing around? Because of your laziness, no one’s going to be able to take a break today.’ I was just 16. The owner would be completely nasty, and then an hour later he’d be a normal person again. Working in those restaurants you feel like you’re an abused dog. Your owner hits you sometimes, and then an hour later he’ll be petting you.”

Jason’s mom kicked him out of the house when he was 17 for doing drugs. He finished high school in the city of Detroit, but he moved from an all-white high school to an all-black one. “I thought, This is crazy,” says Jason. “My father is white, and he was trying to kill me, but these black people are nice to me. I liked them better than white kids in Waterford. It was nothing like what people told me it was going to be. I was raised to believe that black people were violent, of a lesser intelligence, that they were lazy. All they ever cared about was drugs, alcohol, and welfare. I remember my grandma saying, ‘Niggers will jump in the car and stab you. Keep the doors locked.’ I was 12. I remember feeling like, I just can’t imagine that happening. My father always referred to black people as ‘porch monkeys.’ I heard it quite often in the eighties, a term that meant black people were monkeys always sitting on their porches. It was insanity.” After coming to his own conclusions about racial stereotypes, Jason started dating a black woman and eventually met Ben, his lifelong friend and business partner.

When Jason moved out of his parents’ house, he moved in with his brother and sister-in-law, who demanded he find a job immediately or leave. “I ended up finding a job in another Big Boy restaurant as a dishwasher,” says Jason. “I thought it was going to be easy because I’d worked for the company previously, but I was working with a lot of chefs who were sexually harassing me. I was 18. They’d say, ‘We’re going to take you in the cooler and fuck you in the ass.’ I told my manager, who said, ‘Why are you talking to me? Deal with it.’ So I quit.” Jason’s sister-in-law  was not sympathetic when she found out he had quit his job, and demanded that he find another one by the end of the week. “It was Detroit in 1995,” says Jason. “I didn’t know my way around the city, so I asked my brother what to do. He said, ‘Go see my friend Bob at Russell Street Deli.’ I walked across town to the restaurant, and Bob said, ‘Go grab an apron. We’ll make you a dishwasher.’” Jason spent the next 12 years working off and on in the restaurant. “Bob had always paid people a pretty decent wage,” says Jason. “Some of the line cooks were making $10.00 an hour. It wasn’t great, but it wasn’t bad. It was better than Taco Bell, where I made $7.85.”

Jason learned a lot working at Russell Street Deli, and he moved up the ranks fairly quickly. “It was the first time I’d worked in a restaurant that wasn’t a franchise,” says Jason. “The food didn’t come out of boxes or bags. I moved up from a dishwasher to a salad prep cook. I saw green leaf lettuce really for the first time. I remember being like, ‘This is what it looks like when it’s fresh. And red leaf lettuce. What the hell is that?’ I was really introduced to all these different things. I was cooking my own sirloin and corn beef from scratch. I didn’t know what any of these things were. I started as a dishwasher. Over time I was sous chef. They trained me for a waitstaff position. And they brought me on the line as a prep cook, line cook, grill man, expediter, and cashier. Over time I had done everything.” In 2000, Ben started college. Jason started in 2004. They both went to Bennington College in Vermont to study painting and printmaking. Both came back to Detroit during the summers and worked in various restaurants, including Russell Street Deli. One summer Ben invited Jason to eat at the Russell Street Deli. Jason initially refused. “It’s kind of an expensive restaurant for someone who’s low-income,” says Jason. “If you have an entrée and a cup of coffee, it could be up to $23 for two people. Ben said, ‘Let’s go,’ but I said I couldn’t afford to eat. He said he’d treat. There were times when he was in school and I would buy lunch for him, and vice versa. This time I didn’t have enough money to pay for French toast. While we were eating there, we were offered the restaurant.”

The owner, Bob Cerrito, was getting older and wanted to sell the restaurant to people he thought could actually make it successful. “Ben and I had worked there for a very long time,” says Jason. “We were good employees, worked hard, no-nonsense. We come from hardworking, blue-collar families who thought they were middle class. We had both gone away and were doing other things. Ben was showing his art in galleries. It was impressive to Bob. The restaurant was very popular, and he wanted to keep it going. He had owned it for 13 years. He was a very nice man, but not the best business owner. It was wearing him out, and he wanted to give it to someone who could handle it.”

Jason wasn’t sure what to make of the offer. “He offered the restaurant to us, and we took it,” he says. “But he was also a very melodramatic person. I remember I’d be working part-time, and he’d say, ‘Are you coming in to work Saturday, or do I have to close the restaurant?’ It was the typical passive-aggressive, asshole owner thing to do. So when he offered us the restaurant, my initial reaction was, ‘He’s not serious.’ Another reaction was, ‘I can’t afford French toast. How can I buy a restaurant?’” Jason was scared. “It was like that scene from Casino, where these two guys get a casino, but they screw it all up,” says Jason. “One of them says something  like,
‘It was the last time that street guys like us were ever given anything that fuckin’ valuable again.’ Ben and I had degrees in painting, printmaking, and music. We were not setting the world on fire financially.”

Ben, on the other hand, thought that buying the restaurant was perhaps a good idea. “We had a lot of different conversations when Bob offered us the restaurant,” says Ben. “I actually owned a record store at the time, and I was doing well. I had already saved some money, and I was planning to go to grad school. Jason was unsure. It was a lot of money, and it would be hard if we failed. But it was an opportunity to radically change our lives. It was a big thing, and we didn’t know how good we’d be at it. We both had qualms, but we were both excited. We encouraged each other to make that jump, and we’re very grateful that it worked.”

Ben set up a payment plan with Bob so that he and Jason could pay for the restaurant over time. The initial idea was that he and Jason could run the restaurant well, make some money, and sell it. They could then move on with their passions—art and music. “We can make a living with this was our initial thought,” says Jason. “We weren’t thinking about wages, high road practices, paying $5 or $6 per hour to the wait staff, health insurance, or anything like that. We were just thinking, Let’s do this damn thing. Once we started, though, we remembered all the things we’d learned at Bennington in Vermont.

They decided to change the wage structure in the restaurant. Bob had always paid people well, but Ben and Jason agreed that no worker at the Russell Street Deli should be paid the abysmally low Michigan tipped minimum wage of $2.77. Servers in the front of the house began earning around $5 an hour, plus tips. Cooks made $12 or $17 an hour, depending on their experience.

Jason explains how they reached the decision to pay workers almost twice the wage required by law: “We figured that’s what would work for us because we are both pretty independent guys. Neither of us liked punching a clock. Neither of us wanted to run a restaurant,” says Jason. “When I’m not at the restaurant I spend 95 percent of my time alone doing watercolors. Ben has a record label. He’s an underground musician. So neither of us wanted to be there all the time. Both of us initially said, ‘Let’s turn this place around, fix it, because it isn’t profitable—it had never made money. Let’s manage it well, sell it, and walk away with $100,000.’ But once we started running it, implementing some of our ideas, we made the restaurant profitable, and we found that we were both taking home a good wage. So after the first year and a half we said, ‘Let’s not flip it. Let’s make $700 a week from this restaurant for the rest of our lives, plus health insurance and IRAs.’ Part of the plan was that each person would have six months off while the other was in school. So we’d be six months on, six months off.” Ben is currently in graduate school at Columbia University. Jason runs the restaurant. When Ben graduates, Jason will take his turn and go back to school.

“So no matter what, you have six months off to work on your art career or whatever else,” says Ben. “You don’t want to be there 80 hours a week, six months on. You don’t want to find yourself cutting pickles. So we thought, How do we get our employees to do the lion’s share of the work? We’ve got to give them a strong sense of ownership. We’ve got to pay people better. If line cooks are making $13 or $14 per hour, we can say, ‘This is how we want it. We don’t want to hear about it. We’re going to tell you if we don’t like it, because we’re paying you well. We understand you have dreams and aspirations outside of the restaurant, so instead of having to work 40 hours for $400, you get $600, you don’t have to work a second job, and you have time to do what you want in your life.’ We were creating a work environment that was conducive to happiness. We’d say to them, ‘You guys have to get along. You have to communicate, treat each other respectfully. You are the tip of the iceberg. You see everything. We like your input. You decide whether or not something should be implemented. If you’ve changed something and I don’t like it, I’ll tell you. If you play a good game, we don’t have to worry about it. You guys handle the restaurant, we’ll grow the business.’ So now I work 40 to 50 hours per week. I tell them, ‘If I’ve got to slice pickles and clean the bathroom, I can’t increase sales and give you a raise.”

Jason and Ben also decided to find a way to provide health care and retirement plans for the workers. “We had the idea that we wanted to have a core group of employees,” says Jason. “These are the people who got our back. They’re down for the program. They want to work here for the rest of their lives. We also understand that so many people have given their lives to the restaurant industry, and at the end they have nothing to show for it. It’s not like working at Chrysler. So we decided to create the IRA program. We said, ‘We’re not going to make you millionaires, but when you retire, you’ll be able to live out the rest of life, own a house, afford your medication. Getting sick won’t be so stressful.”

Ben feels just as strongly about paying people well. “After all, we both worked there for a number of years, so we knew what it was like,” says Ben. “It’s impossible to live on $8.50 an hour. Even 10 years ago that was difficult to live on, especially if you want to save. Anything else you’d want to do would be out of the question. God forbid someone breaks into your car. You’d lose a whole day of pay. When every dollar counts, it’s imperative to pay people well. It’s the best way to build loyalty. If you work for someone for a while, and you feel like they’re screwing you, you start building up resentment.”

Ben also talks about how important it is to share financial information with employees so they know exactly where the restaurant stands. “This sharing component helps people see that we’re all in this together,” says Ben. “It’s hard to remember when you have a hierarchy, when you have a boss. But if you’re making $2 more than your friend down the street as a dishwasher, and your boss takes care of you, it’s harder to maintain disinterest.” In Jason’s and Ben’s experience,  when employees feel valued, they’re more likely to take pride in their work. “We felt that if people were happy with the money they were making, it would be easy for them to buy into this business,” says Jason. “We could say to them, ‘You guys are running the place. This is the Starship Enterprise. We’re the captains, but the ship is flying itself.’ That comes from us having worked in restaurants ourselves. It sucks working in most restaurants. The boss is hungover, sometimes a raving lunatic. You think, Where did this bozo come from? Why are these people fighting? A lot of restaurant owners act crazy because they’re at the restaurant all the time. ... It’s like that song by Utah Phillips—the problem with punching a clock is that you give your owner your brain at the beginning of a shift, and eight hours later you get it back, but nothing’s in the same place. At Russell Street we want to give you your brain back in the same shape we found it. We don’t want you to feel fucked with. In the meantime, we’re going to do our best to make this as painless as possible.” Do Jason and Ben have to raise prices to pay for the higher wages, raises, IRAs, health insurance, and equitable employment practices? “We’ve owned the restaurant for four years,” says Jason, “and there are certain prices we won’t ever raise. We’re never raising the price of soup, for example. We want there to be something in the restaurant anyone in Detroit can afford. We hope everyone will be able to eat in the restaurant. We also remember a time when we didn’t have enough money to eat in restaurants. So part of what we have to do is raise prices on fancier sandwiches, like, from $8.95 to $9.25 after two years. Another big part of our business plan involves increasing our number of catered events. If you feed 100 people at a catered event, you don’t have to wait on them or wash dishes. You can charge more for catering at a law firm. They can afford $15 per person. We’ve also started a wholesale business. We sell our soup to other restaurants. In the end, it works. We use local products. We buy organically grown black beans from a farmer 40 miles down the road. We get the highest-quality products we can get, and that makes people want to come in. We buy these products to help local people make money.”

Besides paying people really well, Ben and Jason are committed to diversity. “When we took over the restaurant there was 1 full-time black employee,” says Ben. “Now, out of 20 employees, we have 13 black employees, in both the front and the back. I don’t feel comfortable myself eating at restaurants if I look in the kitchen and it has all white staff. I think, Where are the black employees? Why have you hired all white people? Detroit is 85 percent black. The restaurant should reflect the environment. If you just put out an ad for waiters, you’re going to get mostly white applicants; they’re already trained. We’ve had success because we’ll hire dishwashers, train them to be prep cooks, then take them to the front. Then they have a better understanding of the menu, the way the business functions, on the ground level. They speak with confidence, as people who understand the food, how something is prepared. Our new rule is that every time we put out an ad, it’s for a dishwasher.”

Jason and Ben maintain decent hours and a healthy lifestyle. They are pursuing graduate degrees and careers in art and music, and they want the same kinds of opportunities for their employees. Paying people far above the minimum wage, Jason and Ben have managed to create a decent income for themselves, their employees, and even local vendors who rely on their business. Their employees do not rely on tips alone for a steady income, and as a result, they’re much more invested in the success of the business than they would be in most restaurants.

Why wouldn’t every restaurant owner want to do the same? Should Jason and Ben have to stick their necks out as the one of the few employers in Michigan paying tipped workers more than $3 an hour?

Equal Wages for Tipped and Nontipped Workers

Jason and Ben have been lucky. It’s extremely rare for anyone to go from being a dishwasher to a restaurant owner, and it’s also rare for a restaurant employer to pay servers more than the tipped minimum wage. The reality is that Russell Street Deli—a shining example in the restaurant industry—is surrounded by restaurants that rip off and exploit their employees every day.

It’s hard to stomach, right? The United States lays claim to some of the world’s most prosperous, celebrated restaurants, but the workers inside those restaurants are getting nickeled-and-dimed. They are some of the nation’s poorest citizens and immigrants. In 2010, when the U.S. Department of Labor announced the 10 lowest-paid occupations in the United States, food service workers won the dubious distinction of holding 7 of these 10 occupations and 2 of the lowest-paid positions of all.14 That’s based on their reported income, before their wages are stolen.

It’s possible that the whole tipped minimum wage structure is just as confusing to employers as it is to workers and customers. I certainly didn’t understand how tips worked before I started organizing restaurant workers, and I feel for employers who are confused by how to calculate who’s owed what. However, there’s a very simple solution for everyone involved: let’s give tipped and nontipped workers the same minimum wage! Seven states—Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington—have the same minimum wage for tipped and nontipped workers, and all have thriving restaurant industries.

If all workers received the same minimum wage, then there’d be no need for Mike’s and Claudia’s employers to make up the difference between the tipped minimum wage and the federal minimum wage for nontipped workers. Jason and Ben wouldn’t be sticking their necks out. Taxpayers wouldn’t have to pay for food stamps for food service workers. We, the diners, wouldn’t have to worry about tipping extra for fear that our food servers will starve to death.

© Cornell University. This material may not be reproduced or distributed in any form without permission in writing from Cornell University Press.


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