Op-ed: It’s time to lift the floor for all workers in Berkeley

By Van Nguyen

Van Nguyen is the co-coordinator of the Restaurant Opportunities Center of the Bay, a membership-based worker center that seeks to improve wages and working conditions for all restaurant workers in the Bay Area.

[Editor’s note: The city of Berkeley is considering raising its minimum wage with an eye toward related policy changes in San Francisco. In his recommendation to the city’s Labor Commission, which has been studying the issue, Mayor Tom Bates asked the panel to consider setting special rules for tipped workers that could potentially grant an exception to the minimum wage for tipped workers. A final determination has not yet been made but, thus far in the discussions, commissioners have said they don’t believe tipped workers should be excluded from the new rules.]

In the midst of the debate over the proposed minimum wage increase in Berkeley, July 24 marked the fourth year that has passed since the federal minimum wage increased in 2009 to $7.25 per hour. The statewide minimum wage has stagnated at $8 per hour since 2008.

Today, millions of Americans find themselves struggling in poverty even while working a full-time job. The largest low-wage employer in the country, accounting for 39% of all workers earning at or below the minimum wage, is the restaurant industry. Restaurants make up a multi-billion dollar industry and one of the fastest growing sectors in today’s economy, yet workers are not seeing the benefits. In fact, seven of the ten lowest-paying jobs and the two absolute lowest paying jobs in the country are restaurant jobs.

In Alameda County, food prep workers earn a median wage of $9.19 per hour and waiters and waitresses earn a median wage of $9 per hour — meaning that the people who put food on tables of restaurant-goers struggle to feed themselves and their families. The benefits of a minimum wage increase to these low-wage workers are clear, yet in Berkeley now, many restaurant owners are advocating strongly to exclude tipped workers from the proposed minimum wage increase.

At the federal level, the tipped minimum wage is currently $2.13 an hour, which the National Restaurant Association has been successful in keeping in place since 1991. As the state with the largest restaurant industry in the nation, California has had no distinction between the tipped minimum wage and regular minimum wage for a quarter century. California is a stellar example of how we can pay equal wages to both tipped and non-tipped workers, while growing a robust and thriving restaurant industry.

Berkeley, as a beacon of progressive values, should not be the first city in the state to set a regressive precedent by subsidizing the low wages that restaurants want to pay their tipped workers. Instead, Berkeley should join the regional momentum and its neighbors, San Jose and San Francisco, which have minimum wages of $10 per hour and $10.55 per hour respectively, in setting a fair base wage for all workers.

A common myth is that increasing the minimum wage would destroy the restaurant industry. On the contrary, a study from UC Berkeley Institute for Research on Employment and Education found that the minimum wage increase in San Francisco did not create a detectable employment loss among restaurants. Other credible studies show that raising the minimum wage for tipped workers would improve productivity and decrease turnover rates, generating sustainable benefits to businesses.

Local restaurateurs also acknowledge these benefits. Nico Sanchez, owner of Platano in Berkeley, wrote on MomsRising.org, “Paying a living wage helps my business because the workers feel respected and don’t quit on me, leaving me scrambling for new workers. Also, when morale is high among my wait staff this is reflected in the satisfaction and generosity of the customers.”

After the minimum wage increased in San Jose in 2012, in an interview with local news channel KPIX, Nick Taptelis, owner of Philz Coffee, noted that as a result of good wages, “team members are actually happier, working harder, and actually giving better customer service, and from that the store actually got busier.”

Another common myth is that an increase in the minimum wage would drive food prices up astronomically. According to a recent report from the Food Labor Research Center at UC Berkeley, raising the federal minimum wage to $10.10 over the next three years based on the Fair Minimum Wage Act of 2013 would only increase the cost of food by at most 10 cents per day per U.S. household.

Moreover, a higher minimum wage would have an immediate impact on the livelihoods of restaurant workers. Kelly, a member of the Restaurant Opportunities Center of the Bay (ROC the Bay) and a Berkeley resident, laments that “the ability of my partner and I to keep the Internet, pay a phone bill on time, or buy food for ourselves and our pets relies on what tips I bring home. Tips cannot act in lieu of a fair minimum wage.”

Natasha, another ROC member, explains the downside of relying on fluctuating tips. “It is hard to secure a good relationship with a financial institution when your employment is not secure and direct deposits amount to only a few dollars an hour,” she said.

A higher minimum wage both in Berkeley and nationally would go a long way toward ensuring that all workers — from large restaurant corporations to small mom-and-pop shops — would have a secure base wage with which to feed their families, just as they feed us daily. It has been four years since the last federal minimum wage increase, and five years since the last statewide minimum wage increase. It is now time to lift the floor for all low-wage workers.

Op-Ed: As a restaurant owner I question minimum wage process (07.02.13)
Minimum wage ‘tip credit’ idea gets cold shoulder (06.21.13)
Berkeley considers city-wide minimum wage hike (06.18.13)

Berkeleyside welcomes submissions of op-ed articles. We ask that we are given first refusal to publish. Topics should be Berkeley-related and local authors are preferred. Please email submissions to us. Berkeleyside will publish op-ed pieces at its discretion.

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  • dsd510

    Yes! Everyone deserves a living wage, and realistically, in Berkeley $10/hour isn’t even remotely liveable as a single individual, let alone what they get now – but it would be a great start. The small business owners who are fighting this because it will make it “harder for them to get by” should consider how hard it is for their workers to even survive in the bay area on what they currently get. Many of them are on food stamps as a result (I don’t bring this up with negative judgment towards anyone on food stamps, but to illustrate the situation even full-time workers are often facing). Also, if people were paid more fairly, more people would be able to afford to do things like support local restaurants.

  • damian03

    “waiters and waitresses earn a median wage of $9 per hour” – this is not true. It might be the actual reported number, but every restaurant I have worked in (5 or 6) involved cash tips, and the standard practice is to report as little of this income as possible. Credit card tips cannot be hidden, but the other ones certainly can and everyone I knew did hide them. It is naive to think that waiters are earning less than prep cooks and other back of the house jobs.

  • damian03

    Practically every business owner (I mean that literally) wants their business to succeed, and they use trial and error to see what works and what does not. Therefore, if increasing workers’ wages led to reduced turnover and better morale, AND this fact led to a more profitable business, competition would encourage and force businesses to pay more to compete. The fact that they do not pay more for some jobs indicates to me that they probably are paying as much as they feel they can given the tradeoffs of reducing or increasing pay. To say otherwise is to assume that you (the regulator) has more knowledge than the restaurant owner does about how to run the business/which wages are optimal/etc.

  • EricPanzer

    Clearly, if a business owner has decided that using child labor, discriminating against women, firing LGBT workers, withholding paychecks, skimping on overtime, or using hexavalent chromium is best for their bottom line, then trying to prevent such things is assuming that we know better than the business owner and we should just stay out of the way.

    We would all be much better off if we just went back to the Gilded Age, when business hummed along without petty distractions like human rights, safety, health, or fairness in general. When I look back on Triangle Shirtwaist, the Station Nightclub fire, or the recent Savar building collapse in Indonesia, I shake my head and wonder what would have been if only we didn’t have these pesky regulations second guessing business owners.

  • gee

    Damian03 it doesn’t work that way. Consider a case of two competing restaurants, A and B. Initially, they both pay $7 to waitstaff and both A and B make similar profits. To raise wages to $10, either employer would have to raise prices. If A goes to $10 but B stays at $7, A can be in trouble because their prices are no longer competitive. B wins. If both A and B go to $10 at the same time, A and B can both remain successful.

    This is a useful function a wage regulator has: setting a floor on allowable wages. It solves the “prisoner’s dillema” and let’s both A and B go ahead up to $10, each protected by the guarantee that their competitor has to do the same thing.

  • damian03

    I understand this point, but regardless of what competitors do, the article implies that raising wages leads to better morale and less turnover. And my point is that if that were the case, and if those benefits actually meant businesses would be more profitable, then they would make that change already. A (in your example) wouldn’t “be in trouble” if what the article implies is actually true about the benefits of paying more.

    In addition, paying “high” wages is relative, and therefore a mandated floor actually might actually diminish any sort of savings from lower turnover or boosted morale. I.E. if both A and B paid the same, workers would likely have similar behavior as before at a lower wage unless their chances of finding a job that pays $10 diminishes if a living wage law passes, which I believe would be the case.

  • Chris J

    That may be the case, certainly, and it doesn’t take into account the notion that higher prices might disincline potential restaurant goers overall from eating out or choosing either restaurant.

    My wife and I earn what many would call comfortable…or more than comfortable middle-class incomes. Regardless, as we are in our final prep years of continuing our savings for retirement, we are somewhat careful about eating out and choosing restaurants that deliver on price, quality, and service.

    We have eaten at Bistro Liaison which has excellent food and service where one of the owners has expressed resistance to minimum wage hikes. We’ve eaten at Cafe Rouge where the restauranteur offers apparent good wages and benefits to its employees, yet in both our visits we were disappointed in both service and quality.

    Given Bistro Liaison’s resistance to improving the financial lives of all workers, it certainly gives me pause about visiting their place again (I would miss ALL their dishes), yet I would continue to give Cafe Rouge a pass for other stated reasons.

    Certainly a thorny issue. The primary concern seems to be those smaller, local less-foodie fun restaurants with servers who don’t ordinarily take home tips that the well heeled restaurant servers routinely seem to receive.

  • Chris J

    The restauranteurs certainly haven’t tested this scenario by offering slightly higher wages in the first place, I’m guessing. They are running on a basic presumption that higher wages doesn’t result in less turnover and higher costs.

    My thought is that the higher the pay, the less inclination to change employment, etc. each business would need to find that balance point. Bette’s Diner on Fourth St has had employees stay often for years, with some around for 10-20 years. Of course, that’s because its a very successful eatery. I picture a small family-run place only eking out a bare living in contrast.

  • grumpybats

    Have you ever owned a restaurant in Berkeley?