Worker Interests Are Well Served By 'Tipped Wage'

A new report by the Restaurant Opportunities Centers concludes that sexual harassment in the restaurant industry is especially prevalent among women earning the hourly "tipped wage" of $2.13. ROC's solution: eliminate the tipped wage and raise the minimum wage to "give all workers greater personal agency, creating a safer and more equitable workplace."

The report, entitled The Glass Floor: Sexual Harassment in the Restaurant Industry, focuses on full-service restaurants from Applebee's to fine dining restaurants. But it provides little solid evidence for claims of sexual harassment, and none for raising the tipped minimum wage. Rather, it is just the latest tactic by ROC in its campaign to raise the minimum wage.

Nearly 50 years ago, Congress created a lower minimum wage for workers who receive tips. This tipped minimum wage could not be less than 50 percent of the federal minimum wage. Later, the Small Business Job Protection Act of 1996 detached tipped employees from future minimum-wage increases. This is why the tipped minimum wage is still $2.13 an hour, now 29 percent of the minimum wage.

ROC is waging a campaign to raise the tipped minimum wage. ROC states, "Through our ONE FAIR WAGE campaign, we will be advancing campaigns across the country to pass legislation in cities and states that will require the restaurant industry to pay all its employees at least the regular minimum wage."

No matter that waiter and waitress jobs are some of the most desirable in the food industry precisely because of the opportunity to earn tips. Many food workers who could be on a regular wage find that they can earn more with the tipped wage. Those working in Boston, Massachusetts earned an average wage of $13.50 an hour in 2012, according to the Labor Department.

The sexual assault report released on Tuesday is part of the campaign. The theory is that waitresses are victims of sexual harassment because they need to give in to managers' and customers' sexual demands to get tips.

The sexual assault survey results presented by ROC in the report are laughably shoddy. ROC gathered 5,000 surveys, and chose 688 "valid surveys" to analyze. The report gives no mention of how these 688 were chosen. Of the 688 persons in ROC's sample size, 235 no longer worked in the restaurant industry when they were interviewed. Did they remember their wage levels with tips? Did ROC adjust the earnings to today's dollars? ROC does not say.

As in the Centers for Disease Control study which concluded that 20 percent of female college students will be assaulted, survey respondents were not asked whether they were the victim of sexual harassment. Rather, they were asked about workplace verbal behavior, including jokes; behaviors delivered via media, such as sexually suggestive phone calls; physical behaviors, such as pressure for dates and unwanted touching; and actual assault. Those people who interpreted the answers decided whether sexual harassment had occurred.

Conflating lewd jokes or comments about physical appearance with assault, however, renders the survey meaningless-especially when survey respondents did not classify these actions as harassment. Many workers, male and female, enjoy off-color jokes and remarks about personal appearance. Sexual assault is indeed serious, and should be reported to the police. But a compliment about a new pair of glasses or a new haircut, or a suggestion that a young man shave every morning, is not sexual assault. Jokes and comments about physical appearance are common in all workplaces, regardless of salary or wage level.

Then, consider the earnings from sub-minimum wage jobs paying $2.13 an hour. According to BLS, the median hourly rate for Food and Beverage Serving and Related Workers was $8.84 in 2012, or $9.16 in today's dollars. Cooks earned a median hourly rate of $9.88 an hour in 2012, or $10.24 in today's dollars. This includes fast food workers, which lowers the average.

Waiters and waitresses earn far more than the minimum wage, once tips are factored in. If workers make less than $7.25 an hour, employers have to make up the difference so that the worker makes the minimum wage. For restaurants to be permitted to pay $2.13 an hour, the employee has to retain all tips, and must regularly receive more than $30 each month in additional tip income.

ROC's shoddy research is not surprising given that it is more of an advocacy group than a detached research organization. ROC is an example of a "worker center," typically a 501(c)(3) organization funded by foundations and other donors. Such centers offer a variety of services such as education, training, employment services, and legal advice. They also advocate for worker rights through demonstrations, lobbying, community organizing, and engaging employers to change wages, hours, and terms and conditions of employment. These activities are inconsistent with 501(c)(3) status.

ROC's mission is, "to improve wages and working conditions for the nation's 10 million restaurant workers." Since January 2008, when the organization started focusing on developing groups outside New York City, it has launched affiliates in New Orleans, Miami, Michigan, Chicago, Philadelphia, Los Angeles, Houston, and Washington, DC to conduct "workplace justice" campaigns. In 2012, the latest year available, ROC listed revenues of $3.5 million on its Form 990, up from $2.7 million in 2011. Of that, 98 percent came from charitable contributions.

One fundamental problem is that ROC is acting as a union, but without meeting unions' legal requirements. According to the National Labor Relations Act, employees have the right to choose their union representatives in mandatory regular elections. But no employees selected ROC, much less through an election. Further, unions have to be transparent and file their financial reports with the Department of Labor for review, and officers have a fiduciary duty to members in matters related to labor unions' financial assets and property. ROC meets none of these conditions for a union.

Ultimately, ROC does not represent any employees or speak on their behalf. Self-appointed and self-anointed, ROC suggests that it is looking after worker interests. But it does little more than release shoddy studies to pursue its own agenda.