Behind the Kitchen Door

:

The Hidden Costs of Taking the Low Road in Chicagoland’s Thriving Restaurant Industry

By the Restaurant Opportunities Center of Chicago, the Restaurant Opportunities Centers United, and the Chicagoland Restaurant Industry Coalition

Primary Research Support Provided by Ted Smukler, De Paul University LaNysha Adams, Restaurant Opportunities Centers United Editorial Support Provided By Nirupama Jayaraman Design by Christopher Chaput February 9, 2010 Funding Provided By: Chicago Foundation for Women The Ford Foundation The Woods Fund The Chicago Community Trust

Behind the Kitchen Door:

The Hidden Costs of Taking the Low Road in Chicagoland’s Thriving Restaurant Industry

By the Restaurant Opportunities Center of Chicago, the Restaurant Opportunities Centers United, and the Chicagoland Restaurant Industry Coalition

Primary Research Support Provided by Ted Smukler, De Paul University LaNysha Adams, Restaurant Opportunities Centers United Editorial Support Provided By Nirupama Jayaraman Design by Christopher Chaput February 9, 2010 Funding Provided By: Chicago Foundation for Women The Ford Foundation The Woods Fund The Chicago Community Trust

Executive Summary

Executive Summary
Behind the Kitchen Door: Pervasive Inequality in Chicagoland’s Thriving Restaurant Industry was conceived of and designed by the Chicagoland Restaurant Industry Coalition - a broad gathering of academics, policy analysts, worker advocates, worker organizers, unions, restaurant workers and restaurant industry employers. This report represents one of the most comprehensive research analyses of the restaurant industry in Chicago. The report uses data from 582 worker surveys, 29 one-hour interviews with restaurant workers, and 31 one-hour interviews with restaurant employers in Chicago. The results of this primary research are supplemented by analysis of industry and government data, such as the Census, as well as a review of existing academic literature. Our study was inspired by the need for examination and analysis of the overall health of the restaurant industry, which is fundamental to Chicago’s economy and critical to the lives of thousands of restaurant workers and employers. The restaurant industry is an important and growing source of locally based jobs, and provides considerable opportunity for the development of successful businesses. It is therefore essential to make information about the industry from the perspectives of both workers and employers available to all stakeholders to ensure the industry’s sustainable growth.

A Resilient and Growing Industry
Chicago is home to a vibrant, resilient, and growing restaurant industry. The industry includes approximately 9,000 food service and drinking places that make significant contributions to the region’s tourism, hospitality and entertainment sectors and to its economy as a whole. In fact, Chicago has the second largest restaurant industry in the nation. Perhaps the industry’s most important contribution to the region’s economy is the thousands of job opportunities and career options it provides. In 2008, the gross domestic product by metropolitan area from the accommodations and food services sector was $12.7 billion. Since 1995, employment growth in the food services sector has outpaced that of the Chicago region overall. Restaurants employ almost 140,000 workers in Cook County alone and almost 250,000 workers in Chicagoland – 6.8% of the region’s total employment. Since formal credentials are not a requirement for the majority of restaurant jobs, the industry provides employment opportunities for new immigrants, whose skills and prior experience outside the United States may not be recognized by other employers, workers who have no formal qualifications, and young people just starting out in the workforce.

Many Bad Jobs, A Few Good Ones
There are two roads to profitability in the Chicago restaurant industry – the “high road” and the “low road.” Restaurant employers who take the high road are the source of the best jobs in the industry – those that provide living wages, access to health benefits, and advancement in the industry. Taking the low road to profitability, on the other hand, creates low-wage jobs with long hours, few benefits and exposure to dangerous and often-unlawful workplace conditions. Many restaurant employers in the Chicago area appear to be taking the low road, creating a predominantly low-wage industry in which violations of employment and health and safety laws are commonplace. While there are a few “good” restaurant jobs in the restaurant industry, and opportunities to earn a living wage, the majority are “bad jobs,” characterized by very low wages, few benefits, and limited opportunities for upward mobility or increased income. According to the U.S. Bureau of Labor Statistics, the median wage for restaurant workers is only $8.86, compared to a median wage of $17.28 for all workers in Chicago. In our own survey of restaurant workers, the vast majority (90.5%) reported that they do not have health insurance through their employers (see further Chapter III: Workers’ Perspectives). Earnings in the restaurant industry have also lagged behind that of the entire private sector. In terms of annual earnings, restaurant workers on average made only $17,844 in 2008 compared to $55,409 for the total private sector.
i

Executive Summary

A majority of workers in our study reported overtime and minimum wage violations, lack of health and safety training, and failure to implement other health and safety measures in restaurant workplaces. Almost one-third of the workers surveyed in our study (32.6%) experienced overtime violations and 28.5% reported working “off the clock” without being paid. Workers of color are largely concentrated in the industry’s “bad jobs,” while white workers tend to disproportionately hold the few “good jobs.” Workers of color also reported discriminatory hiring, promotion and disciplinary practices: 21.8% of all workers reported being passed over for a promotion, or receiving less pay than another in the same position and 42.8% of those workers felt that the unequal treatment was based on race (see further Chapter V: Segregation & Discrimination).

The Social Costs of Low-Wage Jobs
Our research also reveals the “hidden costs” to customers and taxpayers of low-wage jobs and low road workplace practices. Violations of employment and health and safety laws place customers at risk and endanger the public. For example, restaurant employers who violate labor laws are also more likely to violate health and safety standards in the workplace – such as failing to provide health and safety training, or forcing workers to cut corners that harm the health and safety of customers (see further discussion in Chapter VI: The Social Cost of Low-Wage Jobs). The pervasiveness of accidents coupled with the fact that so few restaurant workers have access to benefits such as paid sick days and health insurance have negative impacts on workers as well as consumers and taxpayers. 96.2% of all workers surveyed reported not having access to paid sick days, and 75.9% reported working while sick. In addition, 90.5% reported not having access to employer-provided health insurance, which can lead to escalating uncompensated care costs incurred by public hospitals. For example, 15.8% of surveyed workers reported that they or a family member had visited the emergency room without being able to pay for their treatment. Finally, low wages and lack of job security among restaurant workers lead to increased reliance on social assistance programs, which results in indirect subsidies to employers who are engaging in low road practices. A key finding of our research is that whenever restaurant workers and high road employers are hurt by low road practices, so is the rest of society.

The High Road Is Possible
It is possible to create good jobs while maintaining a successful business in the restaurant industry. Our interviews with employers revealed that as long as there is an enduring commitment to do so, it is possible to run a successful restaurant business while paying living wages, providing benefits, ensuring adequate levels of staffing, providing necessary training, and creating career advancement opportunities. In fact, 22.3% of the workers we surveyed reported earning a living wage, and similar numbers reported receiving benefits, thereby demonstrating both the existence of “good jobs” and the potential of the industry to serve as a positive force for job creation. Workers who earn better wages are also more likely to receive benefits, ongoing training and promotion and less likely to be exposed to poor and illegal workplace practices. For example, workers earning $16.48 per hour were also much more likely to have health insurance than workers earning less than the minimum wage of $7.75 per hour.

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Executive Summary

Our Recommendations
The Chicagoland Restaurant Industry Coalition recommends the following steps to address the workplace problems documented in our study: 1. Level the playing field by providing paid sick days and increasing the tipped minimum wage. Policymakers should require all employers to provide paid sick days to their employers, and raise the minimum wage for tipped workers to be closer to the minimum wage for all other workers. The lack of paid sick days can result in public health challenges for the entire region. 2. Incentivize high road practices. Initiatives and incentives should be considered to assist and encourage employers to provide living wages, basic health care benefits, and advancement opportunities to restaurant workers. Such initiatives could include rent and property tax incentives for employers who implement stellar workplace practices, and subsidies to employment-based health insurance or support of collective health insurance provisions across the industry. 3. Promote opportunity, penalize discrimination. Policy makers should explore initiatives that encourage internal promotion and discourage discrimination on the basis of race and immigration status in the restaurant industry. 4. Labor, employment and health and safety standards should be strictly enforced. Employers must be educated about their legal responsibilities towards their employees concerning health and safety standards. Agencies should provide employers with the necessary support to observe their obligations to their workers and to the public. It is in the interest of both workers and the public at large that existing standards be observed and enforced. 5. Promote model employer practices. Model employer practices should be publicized to provide muchneeded guidance to other employers in the industry. The vast majority of employers we interviewed agreed in theory that high road workplace practices were better. However, many did not appear to implement them in practice. 6. Allow workers the right to organize. Barriers to organizing restaurant workers should be addressed. The public benefits of unionization in this and other industries should be publicized as significant benefits to workers and employers. 7. Support further industry research. Further study and dialogue should be undertaken that includes the perspectives of restaurant workers, employers, and decision-makers. Such dialogue can help ensure effective and sustainable solutions to the issues identified in our study – especially race-based discrimination, and the impacts of the industry’s practices on health care and public program costs. The information collected here from workers, employers, and industry experts is critical to ensuring that the Chicago metropolitan area’s restaurant industry truly shines as not only an important contributor to the region’s job market and economy, but also to the well-being of its workers and communities.

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Table of Contents

Behind the Kitchen Door:

The Hidden Costs of Taking the Low Road in Chicagoland’s Thriving Restaurant Industry

ExECuTIvE SummaRy CHapTER I: INTRODUCTION & METhODOLOgy CHapTER II: OvERvIEW OF ChICAgOLAND’S RESTAURANT INDUSTRy CHapTER III: WORkERS’ PERSPECTIvES CHapTER Iv: EMPLOyERS’ PERSPECTIvES CHapTER v: SEgREgATION & DISCRIMINATION CHapTER vI: ThE SOCIAL COST OF LOW-WAgE JOBS CHapTER vII: CONCLUSIONS & POLICy RECOMMENDATIONS appEndIx & EndnoTES

i 1 4 12 24 36 48 54 56

© Copyright 2010 Restaurant Opportunities Centers United (ROC-United)

Chapter I

ChAPTER I

Introduction and Methodology
The Chicago restaurant industry has enormous potential, both as an employer and as an engine of economic growth. Over the past twenty years, the food and beverage service sector has expanded, and despite the recent economic downturn, it continues to outpace other industries.1 Unlike many jobs in the manufacturing and technology sectors, restaurant jobs cannot be outsourced. For this reason, they are anticipated to occupy an ever larger share of the region’s economy in the near future.

ABOUT THIS STUDY
This study was conceived and designed by the Chicagoland Restaurant Industry Coalition - a broad gathering of academics, policy analysts, worker advocates, worker organizers, unions, restaurant workers and employers. Data were collected from 582 worker surveys, in-depth interviews and focus groups with 29 restaurant workers, and 31 interviews with restaurant industry employers in Cook County, collected over a one-year period. The results of this primary research are supplemented by analysis of secondary industry data and a review of existing academic literature. This project was inspired by the need for examination and analysis of the overall health of an industry increasingly in its importance to Chicago’s economy and critical to the lives of thousands of restaurant workers and employers. The restaurant industry is an important and growing source of locally based jobs and provides considerable opportunity for development of successful businesses. It is therefore essential to make information about the industry from the perspectives of both workers and employers available to all stakeholders to ensure the industry’s sustainable growth.

The region’s restaurants are an important source of jobs – particularly for people of color, new immigrants and young people just starting in the workforce.2 Thousands of Chicagoland restaurant workers earn living wages and receive health care benefits. The industry also offers opportunities for joining the ranks of the many entrepreneurs who have fulfilled their dream of opening their own restaurants. Most jobs in the industry, however, are characterized by low wages - sometimes below poverty level – no health insurance, no sick and vacation days, few advancement opportunities, and exposure to poor and illegal workplace conditions.

Our primary research, review of existing literature, and analysis of government and industry data reveal that there are two roads to profitability in the Chicago restaurant industry – the high road and the “low road.” Restaurant employers who take the high road are the source of the best jobs in the industry – those that enable restaurant workers to support themselves and their families, remain healthy, and advance in the industry. Taking the low road to profitability, on the other hand, creates low-wage jobs with long hours and few benefits. It ultimately harms workers, other restaurant employers, consumers, public health, and taxpayers. Our research and existing government and industry statistics indicate that the majority of employers in Chicago’s restaurant industry, like employers in other parts of the country, are employing low road workplace practices, contributing to the creation and perpetuation of a predominately low-wage industry in which few workers enjoy basic workplace benefits and safe and healthy working conditions. These practices often lead to violations of workers’ basic rights, as well as federal and state wage and hour laws and health and safety regulations. As a result, as the restaurant industry creates jobs, it has the potential to create jobs that allow workers to support their families, but often instead ends up contributing to the proliferation of “bad” jobs in the current economy – jobs that cannot sustain workers, their families, and our communities. Our worker surveys and interviews illustrate the impacts such bad jobs have on people’s lives. Our interviews with employers highlight many of the factors that drive them to take the low road to profitability, often against the principles of good business practice they espouse, as well as strategies employed by some restaurant employers to overcome these factors. It is possible to achieve success in the restaurant business by pursuing the “high road,” but employers’ ability to do so is undermined by pervasive use of low road workplace practices, creating an unlevel playing field. Our research also demonstrates the importance to public health – and public coffers – of encouraging and supporting the majority of restaurant employers to improve practices.
1

Chapter I

In our research, we also found a high degree of separation – and racial disparity – in wages and working conditions between white workers and workers of TERMS USED IN THIS REPORT color in the Chicago restaurant industry. Our re“Front of the house” and “Back of the house” refer to search suggests at least two key factors contributing restaurant industry terms for the placement and function of to these disparities: (1) racial segregation by occupaworkers in a restaurant setting. Front of the house generally represents those interacting with customers in the front of the tion or position; and (2) racial segregation by indusrestaurant including wait staff, bussers and runners. Back of the try segment. High levels of racial segregation by ochouse workers generally refer to kitchen staff including chefs, cupation are demonstrated by the divide between cooks, food preparation staff, dishwashers and cleaners. the “front of the house” workers, such as servers and “high road” and “low road” are industry terms referring to bartenders with whom diners interact, and those opposing business strategies for achieving productivity and profitability. In this report, “high road” is used to denote who remain hidden in the “back of the house.” Resemployer practices that involve investing in workers by paying taurant workers in the “front of the house” generally living wages, providing comprehensive benefits, opportunities receive higher wages, better working conditions, for career advancement, and safe workplace conditions as a training, and advancement opportunities than those means to maximize productivity. The results of such high road practices are often reduced turnover as well as quality food behind kitchen doors. The majority of white workers and better service. “Low road” refers to strategies that involve in the Greater Chicago restaurant industry are emchronic understaffing, failing to provide benefits, pushing ployed in front of the house positions. Workers of workers to cut corners, and violating labor laws, and health standards. color are largely concentrated in the back of the house – in the lowest paid jobs requiring the longest hours, featuring the greatest health and safety hazards, and offering the fewest advancement opportunities. In addition to these disparities, restaurant workers we spoke with reported experiencing high levels of verbal abuse, excessive discipline, and barriers to promotion they believed to be based on race and immigration status. Patterns of segregation that resulted in differences in wages and employment opportunities were also apparent in the industry segments which employ Chicago restaurant workers. White restaurant workers were significantly more likely to be employed in fine dining establishments, whose price points offer the highest concentration of living wage jobs in the industry. By contrast, African-American workers were much more likely to be employed in the lower-paying quick-service segment of the industry. This report includes the perspectives of both high road and low road employers, the experiences of workers, government and industry data, and academic research. In effect, we have created a unique and rich source of information on the metropolitan area’s restaurant industry to help guide efforts to end discriminatory workplace practices, and promote the high road business model to serve as a positive engine of economic growth in Chicago.

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C h A P T E R II

Overview of Chicagoland’s Restaurant Industry

Chapter II

C h A P T E R II

Overview of Chicagoland’s Restaurant Industry
A. A Significant and Growing Industry
The restaurant industry is increasingly significant for Chicago, especially as manufacturing jobs decline. Food services and drinking places are one of Illinois’ largest employers.3 The tourism industry, which includes the restaurant industry, is now considered one of Chicago’s largest and fastest-growing industries.4 Cook County is home to approximately 9,500 food services and drinking places, a number that grew substantially in the 1990s, and is expected to keep growing.5 The restaurant industry is a key contributor to Chicagoland’s tourism and hospitality sectors, and to the economy as a whole. In 2008, the gross domestic product by metropolitan area from the accommodations and food services sector was $12.7 billion.6 The restaurant industry makes up over 70% of the accommodation and food services sector, and has an annual average growth rate of 5% in millions of dollars contributed to the local economy. Although considerable skills are needed to work in this industry, no formal credentials are generally required, making restaurants a particularly viable source of employment for workers who have not had the opportunity to pursue formal training. Restaurant employment also serves as an important entry point into the job market for new immigrants to the United States, whose credentials and experience abroad are often not recognized by other employers.

B. How Many Jobs?
As indicated in Table 1, the “Food Services and Drinking Places” sector provides almost 250,000 jobs per year in the Chicago metropolitan area (hereafter “food services sector”), and more than 171,000 jobs in Cook County alone.7 In fact, the food services sector contributed to 73% of employment in the “Leisure and Hospitality” supersector.8 The restaurant industry has been one of the largest and fastest-growing sectors of the Chicago economy, second only to the government and healthcare. Now, the food services sector employs more people than a wide variety of both old and new economy industries such as finance, securities, and construction.9

TABLE 1: Employment in the Food Services Sector and Other Select Industries, Chicagoland, 2009
Industry Total Division Non-farm Employment Health Care and Social Assistance Leisure and Hospitality Manufacturing Food Services and Drinking Places Hospitals Construction Employment (in 1000s) 3692.9 413.7 341.9 331.1 249.9 148.4 149.9 Share of Total Employment 100.0% 11.2% 9.3% 9.0% 6.8% 4.0% 4.1%

Source: Bureau of Labor Statistics, Current Employment Statistics, July 2009 In this table, Chicagoland refers to the Chicago-Naperville-Joliet, IL Metropolitan Division which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties Note: Industry Categories are not mutually exclusive

The restaurant industry has the potential for providing low-wage workers with access to advancement to jobs that will allow them to support their families. This is evidenced by the fact that the industry is growing and there are living wage jobs. From our survey data, 12.3% of all workers surveyed reported an hourly wage of $18.31 or higher.
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Chapter II

Since 1992, employment growth in the food services sector has outpaced that of general employment in Chicagoland. 10 Figure 1 depicts employment growth in the food services sector from 1990 to 2008, compared to job growth in the overall region. Even during the current economic crisis, the restaurant industry has not nearly suffered the kind of job loss locally or nationally experienced by the economy as a whole. From January 2008 until December 2008, the economy as a whole experienced a 3.5% job loss, while the restaurant industry experienced 2.3% job loss.11 Even as late as December 2007 in Chicago, while the rest of the regional economy was experiencing serious decline, the restaurant industry continued to experience growth (see Figure 1). Since the beginning of the recession in December 2007, manufacturing and construction job losses have accounted for the overwhelming majority of the job loss in the entire state.12

FIGURE 1: Job Growth in Food Services and Drinking Places and Total Employment, Chicagoland, 1990-2008
1.5

Food Services & Drinking Places Total Division Employment

1990 = 1.00

1.2

0.9

0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 199 199 199 199 199 199 199 199 199 199 200 200 200 200 200 200 200 200 200

Source: Bureau of Labor Statistics, Current Employment Statistics, July 2009 Note: Chicagoland refers to the Chicago-Naperville-Joliet, IL Metropolitan Division which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties.

C. What Kind of Restaurant?
The food services sector includes four distinct industries: full-service restaurants, limited-service eating places, special food services and drinking places.13 The restaurant industry generally includes the first two of these categories; namely, full-service restaurants and limited-service eating places. Although the Census does not distinguish between different types of full-service restaurants, we see both ‘fine dining’ restaurants and ‘family-style’ or ‘franchise’ restaurants falling within this category. Limited service restaurants are also known as ‘quick serve’ – restaurants that do not offer waiter service. Table 2 details employment levels for each of these two types of restaurants between 1990 and 2008. Over this period, employment growth in full-service restaurants outpaced that of other parts of the industry, increasing its share of industry-wide employment.

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Chapter II

Within full-service restaurants and limited-service eating places, we have identified three general sub-segments of the restaurant industry which are presently not specified in government data, but were most useful for understanding the varying practices and strategies used by individual businesses. 1. Fine dining, or what is commonly referred to as “-tablecloth” restaurants; 2. Family-style restaurants, also described as “casual dining,” including both franchise or chain restaurants such as olive Garden or applebee’s, and smaller establishments, frequently neighborhood-based and/or ethnic restaurants; 3. Fast-food or “quick-serve” restaurants. We also found through the interviews with employers that workplace practices are driven by factors such as whether a restaurant is part of a hotel, a larger corporation, chain or group and how many other restaurants the owner has, if any. We found that the majority of the fine dining restaurants are part of restaurant groups or are one of multiple (three or more) restaurants under the same owner. Non-franchise, family-style restaurants are overwhelmingly singly owned or one of two restaurants owned by the same party. These trends had profound impacts in terms of employers’ power, or lack thereof, to define standards and policies that affect their business and buying power, which is a key component of their competitiveness and profitability in the industry.

TABLE 2: Restaurant Industry Employment, Chicagoland, 1990 and 2008 (In thousands)
Year Restaurant Industry Employment, 1990 Restaurant Industry Employment, 2008 Change in Employment, 1990-2008 Percentage Increase in Employment, 1990-2008 Share of Food Services Sector in 1990 Share of Food Services Sector in 2008 Full-Service Restaurants 84.3 117.9 33.6 18.05% 45.27% 46.88% Limited-Service Eating Places 65.2 96.6 31.4 16.86% 35.02% 38.41%

Source: Bureau of Labor Statistics, Current Employment Statistics In this table, Chicago Metropolitan Area refers to the Chicago-Naperville-Joliet, IL Metropolitan Division which includes Cook, DeKalb, DuPage, Grundy, Kane, Kendall, McHenry and Will counties

D. Where are the Jobs?
While the restaurant industry is widespread throughout the seven counties that comprise what is known as Chicagoland, this report focuses on Cook County. As indicated by the data contained in Table 3, Cook County accounts for more than two thirds (67.5%) of the Chicagoland’s employment in full service restaurants, and almost two thirds (64.4%) of the state’s limited service eating places.

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Chapter II

TABLE 3: Employment by County in the Restaurant Industry, Chicagoland, 2007
Full Service Employees Chicagoland Total Cook DuPage Will Kane McHenry DeKalb Grundy Kendall 100.00% 67.49% 15.31% 6.18% 5.47% 3.49% 0.94% 0.50% 0.62% Limited Services Employees 100.00% 64.40% 14.21% 8.27% 6.24% 3.37% 1.67% 0.64% 1.20%

Source: U.S. Census Bureau, County Business Patterns 2007

E. Who Gets the Jobs?
Most jobs in the restaurant industry do not require much formal education, and, with the exception of chefs and sommeliers, employers generally do not require workers to have educational degrees or vocational certification. This is not to say that restaurant workers do not have skills or that restaurant work is not demanding. Back of the house workers, often working in hot, cramped workspaces, must be able to complete the tasks required to accurately fill orders in a timely and quality fashion in a high pressure environment. Front of the house staff and other employees who interact with customers need strong interpersonal skills, time and task management skills, and a working knowledge of food preparation and presentation. The industry is consequently an important source of jobs and income for large numbers of new workers who do not have formal training or are new to the workforce. The industry is also a source of employment for women, youth, people of color and immigrants – particularly new immigrants, whose prior education and experience abroad is often not recognized by employers in the U.S.

F. What are the Characteristics of the Workforce?
The Chicago restaurant industry is extraordinarily diverse, with no majority ethnic group, substantial immigrant populations, and almost equal numbers of men and women. Whites, Latinos, and African-Americans comprise the largest racial groups in the industry, with substantial numbers of Asian American workers as well. The industry is also fairly diverse in terms of age. Not much has changed in terms of the industry’s demographics from 2000 to 2008. The most dramatic difference in restaurant worker characteristics during this period was an increase in educational levels among restaurant workersfewer workers with less than a high school education, and more workers with high school and bachelor’s degrees. There has also been a slight (4%) increase in the proportion of Latino workers in the industry, and an equivalent decrease in the proportion of black workers. There has also been a slight increase in the proportion of workers who speak English very well. Compared to the overall Cook County workforce, Chicago restaurant workers are more diverse. The restaurant workforce has a higher percentage of Latino and mixed race individuals than the overall Cook County workforce. Restaurant workers are also more likely to be immigrants and non-native English speakers, and less likely to have a college education.

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Chapter II

TABLE 4: A Demographic Profile of Cook County Restaurant Workers, 2000-2008 (column percentages)
Restaurant Workers 2000 Gender Male Female Age 16-24 25-44 45-64 65 and older Race/Ethnicity Non-hispanic White Non-hispanic Black Asian hispanic/Latino any race 2 or more races and Other Nativity Citizen by Birth Foreign Born World area of Birth US Latin America Asia Europe Africa Other Years in US Born in the U.S. 0-5 10-Jun 15-Nov 16-20 21 or more Ability to Speak English Speaks very well Speaks well Speaks, but not well Does not speak English Education Less than high School high School Degree Some College Bachelors Degree and higher 52.7 47.3 38.6 42.5 16 2.9 37 21.8 6.9 32.2 2.1 63.5 36.5 63 24.4 7.3 4.7 0.5 0.1 62.2 11.1 8.1 6 4.7 7.9 37.5 25.5 26.3 10.7 43.3 25.7 22.4 8.6 2008 52.1 47.9 35.6 43.6 18.3 2.4 37.8 17.8 6.8 36.1 1.5 63.6 36.4 62.8 25.1 7.2 4.5 0.2 0.1 62.6 6.7 7.3 6.8 6.8 9.9 45.4 20.5 26.2 7.9 28.3 31.4 27.9 12.4 Difference (2008-2000) -.6 .6 -3 1.1 2.3 -.5 .8 -4 -1 3.9 -.6 .1 -.1 -.2 .7 -.1 -.2 -.3 0 .4 -4.4 -.8 .8 2.1 2 7.9 -5 -.1 -2.8 -15 5.7 5.5 3.8 All Cook County Workers 51.4 48.6 14.7 44 35.4 6 49.3 22.2 6.4 21 1.2 73.5 26.5 72.8 13.1 6.3 6.7 0.7 0.3 72.1 3.7 5 4 3.9 11.4 53.2 21.9 19 6 14.1 22.7 28.8 34.4 2008 Only Difference (Restaurant Workers – All Workers) 0.7 -0.7 20.9 -0.4 -17.1 -3.6 -11.5 -4.4 0.4 15.1 0.3 -9.9 9.9 -10 12 0.9 -2.2 -0.5 -0.2 -9.5 3 2.3 2.8 2.9 -1.5 -7.8 -1.4 7.2 1.9 14.2 8.7 -0.9 -22

Source: U.S. Bureau of the Census, Public Use Micro Sample from US Census (2000) and American Community Survey (2008). Note: Difference is percentage point

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Chapter II

G. What do the Jobs Look Like?
Jobs in the restaurant industry generally fall into one of three categories, each corresponding to different levels of compensation, potential for mobility, access to training, workplace conditions, and other important indicators of job quality: 1. Managers and supervisors, including chefs 2. Front of the house positions 3. Back of the house positions

H. What do the Jobs Pay?
While the industry does provide some living-wage jobs, the data in Table 5 shows that the restaurant industry offers mostly low-wage jobs. According to the Bureau of Labor statistics, the median wage for all restaurant occupations in Chicagoland is $8.86 an hour. Eighty-two percent (82.38%) of workers in the industry are employed in jobs for which the hourly median wage is below $10.00.14 As will be discussed in greater detail in Chapters III: Workers’ Perspectives and Chapter V: Segregation & Discrimination, people of color hold the majority of the lowest paid jobs in the restaurant industry. Data show that the Chicagoland restaurant industry is an important and growing source of income and employment. As this industry grows, it creates more low-wage jobs than living wage jobs. The restaurant industry contributes almost 250,000 jobs to the Chicagoland economy, but 82% of those jobs pay less than $10 per hour. And, given the industry’s growing reliance on immigrants and people of color, it is communities that are already marginalized that occupy these low-wage jobs.

TABLE 5. Employment and Median Wages for Food Preparation and Serving Related Occupations in Chicagoland, 2008
Occupation All workers Chefs and head cooks First-line supervisors/managers of food preparation and serving workers Cooks, fast food Cooks, institution and cafeteria Cooks, restaurant Cooks, short order Cooks, all other Food preparation workers Bartenders Combined food preparation and serving workers, including fast food Counter attendants, cafeteria, food concession, and coffee shop Waiters and waitresses Food servers, nonrestaurant Dining room and cafeteria attendants and bartender helpers Dishwashers Hosts and hostesses, restaurant, lounge, and coffee shop Food preparation and serving related workers, all other Under $10.00 per hour 1.44% 6.27% 5.30% 2.72% 6.85% 1.16% 0.33% 11.64% 5.05% 19.55% 5.46% 17.64% 2.06% 4.98% 4.68% 3.12% 1.75% 82.38% Employment share Median hourly wage $8.86 $15.80 $15.16 $8.17 $11.75 $10.70 $9.71 $13.16 $9.32 $8.81 $8.09 $8.08 $7.99 $8.96 $8.50 $8.15 $9.22 $9.50

Footnotes: (1) Estimates for detailed occupations do not sum to the totals because the totals include occupations not shown separately. Estimates do not include self-employed workers. (2) Annual wages have been calculated by multiplying the hourly mean wage by 2080 hours; where an hourly mean wage is not published the annual wage has been directly calculated from OES reported survey data. (3) Wages for the OES survey include base rate, cost-of-living allowances, guaranteed pay, hazardous-duty pay, incentive pay including commissions and production bonuses, tips, and on-call pay. Source: U.S. Bureau of Labor Statistics, Occupational Employment Statistics Survey for Chicago-Naperville-Joliet, IL Metropolitan Division, 2008

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Chapter II

While restaurant jobs in the Chicago metropolitan area have grown, restaurant wages over the past decade have not experienced the same growth. As Figure 2 illustrates, growth in average annual earnings in the industry has lagged behind that of the entire private sector in Chicago. In 2009 dollars, 2001 private sector annual earnings averaged $52,645, but only $17,670 in the restaurant industry. By 2008, private sector earnings had increased by 5.3% to $55,409 a year, while wages in the restaurant industry increased by 1%, to $17,844 over the same period. Thus, restaurant wages grew much more slowly than wages in other economic sectors, despite the growth in the industry during the same period. In sum, while the Chicago metro area restaurant industry is a growing source of income and employment, earnings lag far behind those of other private sector workers in the city, raising concerns about the proliferation of low-wage jobs. The restaurant industry contributes close to 250,000 jobs to the Chicago metro economy, and over 171,000 to Cook County alone but 82% of those jobs pay less than $10 per hour.15 And, given the industry’s growing reliance on immigrants and people of color, it is already marginalized-communities that occupy these low-wage jobs.

FIGURE 2: Average Annual Earnings by Industry, Cook County, 2001-2008

60,000 50,000 40,000 30,000 20,000 10,000

All industries Restaurants

Average Annual Earnings

2001

2002

2003

2004

2005

2006

2007

2008

Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages Note: Earnings are deflated using the CPI-U for Midwest Urban.

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C h A P T E R III

Workers’ Perspectives

Chapter III

C h A P T E R III

Workers’ Perspectives
The information summarized in this chapter represents a compilation of the results of 582 surveys and interviews and focus groups with 29 restaurant workers conducted between September 2008 and May 2009. By speaking directly with Chicago restaurant workers, we gained more insight on the daily experiences of workers in the metropolitan region’s eateries. We were also able to collect new data regarding the overall quality of their workplace experiences. ➜ ➜ ➜ ➜ Where earnings are concerned, our research results are consistent with existing data – the majority of restaurant workers we spoke with reported very low wages. Most restaurant workers do not receive benefits such as employer-provided health coverage, paid sick days, or vacation days. Most restaurant workers we spoke with do not receive regular raises, promotions, or ongoing job training. More than half the restaurant workers in our study are not paid overtime in contravention of governing laws. We also received reports from some workers that they were not being paid at all for any hours they worked beyond 40 despite routinely being required to do so. A majority of workers surveyed reported health and safety hazards at their workplace, compounded by a pervasive lack of health and safety training. In addition, many of the workers we spoke with reported getting injured on the job. Workers reported that assertions of their rights were met with verbal abuse and threats of retaliation.

Workers earning low wages are less likely to receive benefits, more likely to be exposed to poor health and safety conditions, less likely to be provided with job or health and safety training, and less likely to benefit from advancement opportunities. Conversely, workers earning living wages are more likely to receive health insurance and benefits, and work in safer environments.

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A. Introduction and Methodology
While a majority of jobs are low-wage, low-road jobs in the restaurant industry, our survey research shows that the low road is not the necessary path in this industry. At least one tenth of the workers we surveyed reported earning living wages, and similar numbers reported enjoying comprehensive benefits, opportunities for career advancement, and better workplace conditions. While these workers are in the minority, their experiences reflect the reality that some restaurant employers in the industry are pursuing the high road to profitability. The employer perspectives summarized in the next chapter offer important insight as to how the conditions described in this chapter can be addressed. This study was motivated in part by the current dearth of quantitative and qualitative data documenting the experiences of restaurant workers in the Chicago. In an effort to pick up where official and industry statistics leave off, the Chicagoland Restaurant Industry Coalition designed a survey to capture detailed information regarding individual workers’ experiences beyond hour and wage data. The survey instrument explored the availability of benefits, working conditions, hiring and promotion practices, the existence of job-specific training opportunities, employer discrimination, and the nature of working conditions in the industry. Stratified random sampling methods were chosen to provide an accurate proportional representation of restaurant workers in Cook County. Stratification was used as a sampling technique to ensure that our sample was truly representative.16 To add to the rigor of the survey design and administration, we weighted the data according to front and back of the house in full-service and limited-service restaurants to improve the precision of our estimates. Weighting was used to compensate for over- or under-sampling and for disproportionate stratification, and to ensure unbiased estimates of restaurant worker population totals.17 The survey was administered from September 2008 and May 2009 by staff, members, and volunteers from the Restaurant Opportunities Center of Chicago – a community-based organization with significant contacts among restaurant workers and access to workplaces in the industry. A total of 582 surveys were conducted face-to-face with workers in Cook County after workers’ shifts were completed or during breaks. We sought to capture experiences in all types of restaurants, and surveyed workers in each of the three main segments of the industry.18 Furthermore, our sampling frame, or set of participants from which the sample was drawn, consisted only of workers employed in the industry.19 Additionally, in order to obtain a holistic picture of the daily lives of individual restaurant workers, qualitative interviews and focus groups were conducted with a total of 29 workers to gain in-depth information about the nature of working conditions. A general interview guide approach was used to conduct the one-on-one in person interviews. The guide, developed by Dr. Manny Ness of Brooklyn College, contained standardized open-ended questions to ensure that the same general areas of information were collected from each interviewee. Interviewers were trained how to use the guide to conduct semi-structured, conversational interviews.20

B. Earnings
“But people really don’t know [how much we get paid]. Like I had a woman who got really upset about it when I told her -- you know like, servers don’t really make like an hourly rate. She thought like you get ten dollars an hour and the tips are extra. I was like...no.” – Male, 4 years in the industry, Server
Our survey data is consistent with government and industry statistics demonstrating that restaurant work is primarily low-wage work. Seventy-eight percent (78%) of workers surveyed in our study reported earnings of less than $16.48 an hour. Five percent (4.6%) of this group did not earn minimum wage – even when tips were accounted for. Twenty-two percent (22.3%) of workers surveyed reported making a living wage. A living wage “affords the earner and her or his family the most basic costs of living without need for government support or poverty programs”21 and was calculated using the Economic Policy Institute’s Basic Family Budget Calculator. (See side box for wage group definitions).

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METHODOLOGY FOR DEFINITION OF WAGE GROUPS FOR SURvEY DATA ANALYSIS:
Real wages were determined by either calculating workers’ average weekly earnings including tips and dividing by the average number of hours worked per week or, for un-tipped workers, using their hourly wage. Wage groups were then created using the Illinois State minimum wage at the time the survey was conducted ($7.75), the Department of health and human Services (hhS) 2008 federal poverty line earnings for a family of three of $17,600 per year, and the Economic Policy Institute’s (EPI) Basic Family Budget Calculator. The following six factors were chosen to calculate a living wage: a) housing, b) Food, c) Transportation, d) healthcare, e) Taxes and f) Other basic necessities. Definition of wage groups and distribution of the sample population across groups can be seen in Table 6.

TABLE 6: Wages Earned by Restaurant Workers
Less Than Minimum Wage (< $7.75) Below Poverty Line ($7.75 –$8.45) Low Wage ($8.46 - $16.47) Living Wage ($16.48 and higher)
Source: Chicagoland Restaurant Industry Coalition survey data

4.6% 15% 58.1% 22.3%

Over half of workers in our sample (58.1%) reported earning low wages, and one-fifth (19.6%) reported earning wages below the poverty line. The impact of occupational segregation, which will be discussed further in Chapter VI: The Social Cost of Low-Wage Jobs is substantial; even though the median wage of our entire survey population was $11 an hour, when workers of color earnings were taken out of our sample, the median wage rose to $14.56 an hour.
The earnings picture is slightly different for restaurant workers when compared to other workers because an exception to minimum wage laws is made for workers who regularly receive tips. As a result, restaurant employers in the State of Illinois are permitted to pay tipped workers minimum wages of $4.65 per hour, or 60% of the state minimum wage, as long as tips make up the difference between $4.65 and the state minimum hourly wage of $7.75 (at the time the survey was conducted). If they do not, the employer must pay workers the difference. 22 In Illinois, however, tipped workers are not guaranteed the full minimum wage for each individual hour or shift that they work. Federal regulations allow employers to average out their workers’ tips over a full workweek, complicating the tip tracking system and making it vulnerable to employment law violations under the Fair Labor Standards Act (FLSA).23 Twenty-eight percent (28%) of the workers surveyed in our study reported that they were born in another country, and 36% of these workers reported that did not have legal status to work in the United States. Their actual proportion in the restaurant workforce is likely even higher given the possible reluctance of workers to report their immigration status or “off the books” employment. Despite the legal implications of the 1986 Immigration Reform and Control Act (IRCA), 24 which made it illegal to knowingly hire or recruit immigrants who do not possess lawful work authorization and required employers to attest to their employees’ immigration status, many employers with whom we spoke stated that undocumented immigrants are widely employed in the industry. various reports and news stories confirm that the restaurant industry provides an entry-point for undocumented workers, particularly because of the opportunities to earn cash by the hour – even when earnings are below federal and state mandated minimum wages. 25 Census data is unlikely to capture the earnings of these workers.

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Chapter III

WHAT DOES IT MEAN TO LIvE ON A RESTAURANT WORKER’S EARNINGS?
According to the American Chamber of Commerce Researchers Association’s (ACCRA) Cost of Living Index, which is based on the composite price of groceries, housing, utilities, transportation, health care, clothing, and entertainment, Chicago’s cost of living is on par with the national average, making it even harder for low-income workers to make ends meet;26 According to the National Low Income housing Coalition (NLIhC), while the Fair Market Rent for a two-bedroom unit in the Chicago metro area27 is $1,004, an extremely low-income household (earning $22,470 or 30% of the Area Median Income of $74,900) can afford monthly rent of no more than $562.28 On average, a restaurant worker earning $11.00 per hour can afford monthly rent of no more than $572 for a two-bedroom unit. For workers to afford a Fair Market level of rent and utilities, without paying more than 30% of their income on housing, their household must earn $3,347 monthly or $40,160 annually. The typical restaurant worker would have to work approximately 76 hours per week in order to afford a two-bedroom unit at the area’s Fair Market rent. NLIhC determined that the “housing Wage” – the amount a full time worker must earn per hour in order to afford a two-bedroom unit at the area’s Fair Market rent – in the Chicago metropolitan area is $19.31.

C. Benefits
“Thank goodness, I am single but I do have a friend who knows somebody in the health insurance industry, but I am still paying $150 a month for health insurance and I mean it is not the greatest. It has no pharmacy or anything so that’s a nice chunk when you are not making that much money” – Male, 4 years in the industry, Various Back of the House positions
The majority of restaurant workers surveyed reported that they do not receive basic workplace benefits. The data in Table 7 reveals that the vast majority of workers surveyed do not have health insurance through their employers (90.5%), over half (53.4%) reported not having any type of health insurance coverage at all, and 15.8% went to the emergency room without being able to pay. An overwhelming majority reported that they do not get paid sick days (96.2%) or paid vacation days (87%).

TABLE 7: Job and Health Benefits Reported by Restaurant Workers
Employer does not provide health insurance Do not have any health insurance coverage Do not get paid sick days Do not get paid vacation days Have worked when sick
Source: Chicagoland Restaurant Industry Coalition survey data

90.5% 53.4% 96.2% 87% 75.9%

“Well, for me, it’s your life, it’s how you pay your bills and the way I saw it was, you work with these people. But I know I shouldn’t get friendly or personal with these people but, you know, you spend so much time together, and you make jokes together and you try to work and have fun at the same time. What I noticed was the owners of this restaurant that I used to work at they were more concerned about my production than my well-being, or how I got along with everybody. And one of the owners came over to me and said, ‘Well, now that you’ve done all your duties and all the work that you’re supposed to do, why don’t you go to the back of the house and bring in, you know, this furniture, and I thought, you’re giving me something to do and I’m going to break my back and you don’t even provide me with insurance.’ So we had this big-big argument and he said, ‘get back and do your job or else you’re fired.’ And it was like, you don’t ‘get it’. Like, I break my back in here and who’s going to take care of me, who’s going to feed me, who’s going to pay my bills, I’m only supposed to work in the restaurant. I’m not your maid!” – Male, 9 years in the industry, Busser, Barback, & Server

“I believe that the restaurant industry should be a store bound type of a job. Whether workers are a waitress bartender or a dishwasher. I believe everybody should get the same benefits as someone you know who works in an office gets dental. They work way more hours, they are doing the same labor. They’re doing overtime. Working in a restaurant is hard labor. It’s really hard labor. I think that someone who works in the restaurant industry should get the same benefits as someone in the corporate office.” – Female, 2 years in the industry, Server

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The majority of the workers we interviewed reported that they were unable to get unpaid time off when they needed it, particularly when they were sick. As a result, 75.9% of the workers we surveyed reported working while sick. These numbers should be of concern to the general public because food is one of the major avenues through which communicable diseases are spread. If workers are coming in to the job sick, it endangers the health of their co-workers, customers and the general public.

“Well, you don’t feel priority, I guess. You just feel like a normal worker, when you don’t have benefits. You’re not special, I guess. You have nothing to look forward to, because some people get a pension plan, but you have nothing to look forward to. So, I guess it does affect me a little bit.” – Male, 6 years in the industry, Server “Throughout all my restaurants and catering, no benefits. No vacation, no sick time. That’s what the restaurant business is, though, right? Because a server, a bartender, you just know off the bat [you’re not getting any benefits].” – Male, 5 years in the industry, Host “It affects me because every time we go to the doctor or whatever we have to pay for everything medicine, the appointment every time.” – Male, 14 years in the industry, Bartender
Twenty-eight percent (28%) of workers surveyed with health care pay for a private health insurance plan out of pocket. Additional information on the impact of the industry’s lack of benefits on workers, taxpayers, and the public can be found in “Public Cost” section of Chapter VI: The Social Cost of Low-Wage Jobs.

D. Dead end jobs
Ideally, restaurant workers would be able to advance from lower-paying positions in the industry (often in the back of the house, or in lower-level front-of-house positions) to higher-paying positions in the industry (most often server and bartender positions in the front of the house) over time based on their experience and ability, and would have the opportunity to move up in one restaurant setting, in which internal promotions are possible and encouraged. Unfortunately, restaurant workers have few opportunities to move up in the industry (see Table 8). Regardless of occupation, restaurant type, or length of service at a restaurant, workers reported that opportunities to increase their earnings through seniority or by working their way up the industry ladder are few and far between. Eighty percent (79.5%) of survey respondents reported that they do not receive regular raises, and 74.5% of workers responded that they had not been promoted since starting at their current place of employment. These trends held whether a worker remained in the same place of employment or sought other opportunities – 71.4% of workers surveyed said they had not moved up from their last job when they took their current one. Moreover, 61.8% of workers surveyed reported that they do not receive on-the-job training needed to be promoted.

TABLE 8: Raises and Promotions Reported by Restaurant Workers
Do not receive regular raises Have never been promoted in current job Did not move up in position from last job to the current job Did not receive on-going job training needed to be promoted from employer
Source: Chicagoland Restaurant Industry Coalition survey data

79.5% 74.5% 71.4% 61.8%

“I haven’t received a promotion – I have requested – well, first when I applied I mentioned that I wanted to work bar eventually, or be trained on the bar because I do think that the best way to move into bartending is to have experience in a restaurant, and then have experience working an actual bar. So it was something I made clear when I applied and when I was hired, and regularly when we’ve had openings I’ve indicated my interest to my managers – maybe I haven’t exactly requested the promotion, but I’ve been told I will never get it pretty clearly. It’s not going to happen.” – Female, 2 years in the industry, Server
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The majority of restaurant workers are essentially trapped in low-wage jobs with long hours, few benefits, and few advancement opportunities. A discussion of a lack of movement between front and back of the house workers emerged as a reoccurring theme in the interviews. A dishwasher who has been in the industry for 8 years explains that he recently received a promotion to food prep, even though he “wants to be a server.” After three years in the industry, a cook who works in a fine-dining establishment reported: “I asked for a promotion to bartending but I didn’t get it because they think that women are better for it.” Several employers explained that when they hire for the kitchen, there is not much room to “advance in position;” as when they hire for a dishwasher, for example, they are looking for a person to do that job and to continue occupying that position. Most of the workers we spoke with working in the industry for three years or more, reported having no choice but to leave an employer in search of better jobs at other restaurants. Not only does the constant search for a better job deny workers job stability and economic security for themselves and their families, but it also ends up costing employers in turnover-related costs.29 These two factors lead to a no-win scenario, and greatly threaten what could be a shared economic prosperity, as discussed in greater detail in Chapter III: Employers’ Perspectives.

“Well, I think any time I’ve tried to advance anywhere, I don’t think that was the reason. It was more like they denied me because they didn’t think I was right for it for whatever reason. But I’ve also never, I figured I got paid more as a barista than a dishwasher and a busser, so [I look for those positions].” – Female, 3 years in the industry, Cashier

E. Employment and Labor Violations
As mentioned in Section B above, restaurant employers in the State of Illinois are permitted to pay wages of $4.65 per hour to tipped workers. If tips do not bring the worker up to minimum wage, employers are responsible for making up the difference. Furthermore, it is unlawful for employers to take tips from restaurant workers. The employer, for each pay period in which tips are reported, must keep a written tip statement signed by the employee and dated before each paycheck is received on file.30 In paying workers $4.65, or 60% of the state’s minimum wage, employers rely on tips from customers to pay the difference between workers’ tipped hourly rate of $4.65 and the legal minimum in the state. however, if tips do not bring the worker up to minimum wage, employers are responsible for making up the difference. While “tip-pooling” and “tipping-out” is a common practice in most restaurants, it is unlawful for employers to take tips from restaurant workers. Interestingly, 88.7% of restaurant workers surveyed were not aware of the correct minimum hourly wage for tipped workers and 68.5% did not know that $7.75 was the state minimum hourly wage at the time the survey was conducted. Illinois has a state minimum wage that is higher than the federal minimum wage for both tipped workers ($2.13) and non-tipped workers ($7.25). The state hourly minimum wage increased from $7.75 to $8.00 in Illinois on July 1, 2009. Illinois will experience another minimum wage increase to $8.25 an hour on July 1, 2010 as mandated by Public Act 094-1072, an amendment to the Illinois Minimum Wage Law.31 Clearly, more public education, for workers and employers alike, is needed with respect to governing laws in the restaurant industry.

“I recently took a job there for this thing, temporary, another kind of awful experience. But now, I believe because it’s such a horrible corporate place – it was just a really bad experience. They don’t have a percentage for what you tip out to your bussers, they leave that to your discretion because the tipping from their clientele is so horrible.” – Male, 4 years in the industry, Server TABLE 9: Employment Law Violations Reported by Restaurant Workers
Employment Law Violations Reported by Restaurant Workers Experienced overtime wage violations Worked off the clock without pay Management took share of tips Experienced minimum wage violations
Source: Chicagoland Restaurant Industry Coalition survey data

Percent of Workers 32.6% 28.5% 14.7% 4.6%

As illustrated by Table 9, many workers reported being paid less than minimum wage and receiving no overtime pay when they worked more than 40 hours per week, in violation of both federal and state wage and hour laws. Thirty-three percent (32.6%) of all workers surveyed told us they were not paid overtime for hours worked beyond
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the standard 40-hour workweek. While fine-dining workers reported a higher proportion of management stealing tips (12.5%) and minimum wage violations (18.5%) than the general survey population, employment violations occurred in every segment of the industry.

“There’s always a tip. So we do events and at the end of the event there’s a big tip. But always with the tips it’s always corrupt because the function director, he’s the manager who receives the big tip and he’s supposed to divide it evenly with all the servers, the cooks, the chefs and himself. So at the end of the night he’s supposed to give everyone an even amount. But there’s always times when you think he doesn’t, when someone gets more than you, or when you get a very less amount, knowing that it’s more, and you just know that he got the rest of the money. And right there, there’s no sense of word, or how do I say it, or paperwork. He has all the power and nobody can tell him what to do or what not to do. There’s always problems at the end with the tip.” – Male, 4 years in the industry, Server
Some workers we interviewed reported being paid a flat rate no matter how many hours they worked, a practice commonly referred to as “shift pay.” However, the Fair Labor and Standards Act mandates that if workers are scheduled for a shorter shift and they end up working more than eight hours or more than 40 hours per week, employers must pay overtime.32 Furthermore, 100% of the workers interviewed who worked in the front of the house positions reported that their hourly wage depended on the type of shift they worked. For example, a server who has been in the industry for 12 years, explained “I usually worked eight to ten hour shifts, sometimes much shorter depending on how busy it is. The restaurant where I work usually has fewer servers and really big sections so I usually have a section of maybe 12 tables or more. And we’re usually busy at 6pm, weekends we get a rush at like midnight, [that’s when I get the most tips].” When a particular shift is less busy, all servers reported being “cut” because they were not making any tips. Juan, a server who has been in the industry for 3 years reported: “I’d come in for four hours and make less than $30 on a slow shift. That’s all I would make.” Several workers also told us they were paid a fixed rate on a bi-weekly basis, regardless how many hours they worked, and as a result, their average earnings were always less than minimum wage. These experiences illustrate the importance of qualitative studies in industries such as the restaurant industry, which are not closely regulated and rely heavily on informal employment arrangements, as many workplace practices are not reported to government agencies or industry associations.

“The workers pretty much get their money from the tips. The restaurant doesn’t pay anything to them not even the minimum wage. They make their own money but everything is made out of tips they get nothing from the house. I have a friend who works there he is from Cuba he was telling me the slow days run from $120 to $150 a day and the busy days $300 a day. Which is good but the house does not put money in their pockets. I think is good money but bad because they do not get paid by the house they should get at least the minimum wage.” – Male, 10 years in the industry, Cashier
Five percent (4.6%) of workers reported being paid less than minimum wage, in violation of the law. In the State of Illinois, employers may pay as little as $4.65 an hour to tipped employees, as long as they receive enough in tips to make up the difference between the tipped wage and the state minimum wage. If tips are insufficient to bring workers up to the state minimum wage of $7.75 an hour (at the time the survey was conducted), however, employers are obliged to make up the difference.33 Nevertheless, of the workers we interviewed, several reported being paid no hourly wage at all and subsisting on tips alone, often averaging out to an hourly rate far below the legal minimum.

“I usually worked 8 hours straight. I needed those tips. I was almost on a tight schedule. I was working from 8:45 am until 5:00 pm without a break. You know that that is illegal but there is always this mentality that you go to your job get it done then go home and rest. It is an unwritten mentality.” – Male, 8 years in the industry, Busser “Where I work now, they don’t pay holidays, overtime, or when it’s slow. I rely on tips.” – Male, 15 years in the industry, Busser
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More than a quarter (28.5%) of the workers we surveyed reported working “off the clock” without pay. Other workers reported having to end their shift early and still work, oftentimes receiving no pay. When asked why they had to end their shift early and still work, these workers explained they were too close to earning overtime, yet continued to work because they needed the opportunity to earn tips. Finally, 14.7% of tipped workers reported that management was unlawfully taking a share of their daily tips – a severe burden to workers who are already being paid very low wages.

“I am very passionate about the way [we] are treated, unfortunately I’ve gotten a reputation for standing up for what I believe, about how managers been treating their employees, especially the manager taking hosts’ tips. Those issues are not addressed by management and won’t be addressed by management.” – Female, 5 years in the industry, Server

F. Health and Safety Violations
“By now this day is just all about money and as long as they make their bucks you know, ‘cause I heard a lot of people I have a lot of friends who work down town and they get no training they treat you like you were blind, just throw you ‘go’ play, you know without you knowing anything. You have to pick up on your own if you do something you were not suppose is a mistake, but now the supervisor sees you… because they did not train you so, is their fault. I have a friend this is weird thing, he just came from school it was summer and he said he went to the kitchen and the supervisor told him okay I want you to cut this lime for me and when he was cutting it he cut his finger. They told him ‘you have to go you are out of here’ and they fired him. They said it was his fault because he should have told them that he never used a knife before.” – Male, 10 years in the industry, Busser
Our survey data also revealed that restaurant workplaces commonly do not employ or enforce regulations designed to ensure the health and safety of workers, in violation of the federal Occupational Safety and Health Act (OSHA).34

TABLE 10: Health and Safety Violations Reported by Restaurant Workers
Unsafely hot in the kitchen Fire hazards in the restaurant Missing mats on the floor to prevent slipping Missing guards on cutting machines Done something that put own safety at risk Did not receive instruction or training about workplace safety
Source: Chicagoland Restaurant Industry Coalition survey data

25.7% 18.1% 19.7% 26.8% 33.6% 32.3%

As shown in Table 10, twenty-six (25.7%) percent of workers surveyed reported that it gets unsafely hot in the kitchen where they work. Significant numbers of workers reported fire hazards such as blocked doors or non-functioning fire extinguishers in the restaurant where they worked (18.1%), as well as absence of guards on the cutting machines (26.8%) and mats on the floor to prevent slippage (19.7%). Thirty-four (33.6%) percent reported having done something at work that put their own safety at risk. Despite the prevalence of health and safety hazards in restaurant workplaces, nearly a third of the workers (32.3%) told us they did not receive health and safety training from their employers.

TABLE 11: Workplace Injuries Reported by Restaurant Workers
Burned while on the job Cut while on the job Slipped and injured while on the job Came into contact with toxic chemicals while on the job Have chronic pain caused or worsened by the job
Source: Chicagoland Restaurant Industry Coalition survey data

47.8% 53.7% 13.5% 11.3% 21.8%

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Table 11 demonstrates that on-the-job injuries are pervasive in Chicago restaurants. 47.8% of all workers surveyed – or 271 workers out of the 568 workers eligible to answer the question - had been burned on the job. Fifty-four percent (53.7%) of workers surveyed had suffered work-related cuts on at least one occasion, and 11.3% had come into contact with toxic chemicals. Fourteen percent (13.5%) reported that they had slipped and injured themselves while at work. Additionally, 21.8% reported chronic pain that was caused or worsened by their job.
“So, I cut my finger at work last year. I cut my tendons in my finger. I was bartending, actually. I thought I was going to recover after three days, but I noticed that my finger wasn’t going up or down. So I went to go see the doctor, and he told me you hurt your tendon at work. So he told me my work would give me worker’s comp. And it actually worked pretty good about that. I was lucky to have insurance from my school and they paid for the whole surgery and everything. It was over three or four grand. If I hadn’t been in school, I would probably have a deformed finger” – Male, 6 years in the industry, Server

TABLE 12: Workplace Practices Reported by Restaurant Workers
Worked when the restaurant was understaffed Performed several jobs at once Experienced verbal abuse from supervisors Performed a job not trained for Done something due to time pressure that has put own health and safety at risk Done something due to time pressure that might have harmed the health and safety of customers
Source: Chicagoland Restaurant Industry Coalition survey data

81.1% 88.0% 30.9% 52.1% 33.6%

23.9%

Finally, Table 12 reveals that understaffing, which places inordinate pressure on workers, is a common industry practice. Eighty-one percent (81.1%) of respondents reported working when their restaurant was understaffed and 88% reported they have performed several jobs at once. Half (52.1%) responded that they have been required to perform jobs for which they had not been trained, and 33.6% of workers reported doing something under time pressure that put their own safety at risk (i.e., grabbing overly hot plates/pans in order to not keep the customer waiting). And, as previously discussed, nearly three fourths of the workers we surveyed reported working while sick (75.9%). Such low road workplace practices not only affect workers, but can also have serious consequences for consumers. Fourteen percent of workers reported having done something that might have put the health and safety of the customer at risk as a result of time pressure. In fact, as further discussed in Chapter VI: The Social Cost of Low-Wage Jobs, survey data indicated a correlation between health and safety violations and impact on consumers.
The federal Occupational Safety and Health Act (OShA) imposes standards for health and safety in the workplace, requiring employers to provide protection for workers in hazardous environments and to keep records of all workplace injuries and accidents. OShA covers toxic chemical use – the statute requires gloves, for example, for dishwashers and kitchen cleaners who use very heavy toxic chemicals – and temperature of work environments, including excessively hot kitchens. While there is no mandatory requirement that employees be provided with specific health and safety training, such training is effectively necessary to ensure compliance with OShA and workers’ compensation law. In addition, employers in the State of Illinois must secure workers’ compensation insurance for every employee. The Illinois Workers’ Compensation Act is a no-fault law; workers are eligible for benefits even if they contributed to their own injury. A work related injury may be an isolated incident (falling down) or a reoccurring action that leads to an injury, condition or illness (daily inhalation of a toxic chemical). Illinois Workers’ Compensation law also stipulates that workers’ related medical expenses will be fully covered, to employees entitled to workers’ compensation benefits, with no time or monetary limits. Furthermore, the injured employee has the injured employee has the right to be treated by two doctors and their referrals at the cost of the employer. Workers are also allotted time off to recover from an injury or illness, and may be eligible to receive fixed compensation for any permanent disability.35

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G. Many “bad jobs,” a few “good jobs”
Analysis of our data revealed the existence of not only the low road practices described above, but also of correlations between workers’ earnings, benefits and workplace conditions. Unfortunately, since many of the jobs in the restaurant industry are long-term, these conditions cannot be dismissed. Restaurant workers surveyed reported working an average length of time in each restaurant at two and a half years. More than a quarter (27.2%) of workers surveyed reported working in one restaurant for three years or more. More than three-fourths (79.6%) of the workers that reported working in the same restaurant for six or more years were workers of color. While they may not stay in one particular restaurant for many years, many workers most definitely stay in the industry for their lifetime. The median hourly wage reported by workers that worked in one restaurant for three or more years was $11.54, compared to $8.50 for workers who had worked in the same location for only one year or less. Additionally, there was a high correlation between workers that reported receiving promotions and the length of time they stayed working in one restaurant. Fifty-three percent (52.9%) of workers who stayed in their restaurant for six or more years received a promotion, while only 26.4% of workers who worked between one and three years in the same restaurant received a promotion. When combined with findings from the interviews, these statistics indicate that many of the workers are quitting their jobs to find others that provide better opportunities and higher wages, still in the restaurant industry. Thus, contrary to the popular myth that workers are “transient” and use their jobs as temporary stepping stones on their way to earning more money, the restaurant industry is actually a career choice for many. A fine dining server who has been in the industry for more than five years explains that low wages and lack of access to benefits in the industry “sucks because some of us take our jobs seriously. We make the restaurant our career, but we don’t [enjoy] the benefits of a career.” Of the 582 workers we surveyed, the vast majority reported working 40-hours per week (53.1%), year-round (91.2%), for more than one year in one restaurant (71.8%). Clearly, most workers make a career out of the restaurant industry, and several workers explained that turnover rates are high because they are constantly seeking better jobs.

“Yes they paid overtime, they paid holidays all time and a half. Every paid shift they gave you a paid lunch and at the end of the year if you don’t use it you can cash it and they give you cash or you can still use it if you like. I mean it was pretty good I was very happy that I worked with them. I left because I needed benefits.” – Male, 8 years in the industry, Server
Our research shows that when workers receive poverty wages and experience a lack of promotions and benefits, they frequently encounter a large number of additional poor workplace practices, creating an industry of many “bad jobs” and few “good jobs.” Specifically, our data demonstrates that workers in lower wage positions are: ➜ Less likely to receive regular raises, promotions and job training needed to move up in the industry. Conversely, workers in living wage jobs are more likely than workers earning incomes below the poverty line, and much more likely than workers earning less than minimum wage, to be promoted within their workplace or when they move from one job to another. Less likely to receive workplace benefits such as employer provided health insurance, or paid sick and vacation days. For example, workers in living wage jobs were more likely than workers making less than minimum wage to have health insurance. More vulnerable to violations of employment laws, more likely to be exposed to unhealthy and unsafe workplaces, and more likely to have to work longer hours in order to make a sustainable living in the industry. For example, more than three quarters (83.3%) of workers earning less than minimum wage reported overtime pay violations, compared to only one-third of workers in living wage jobs (33.3%). Less likely to receive training, such as health and safety training, to perform job duties. Workers earning less than the poverty level are particularly likely to be required to perform jobs without receiving the necessary training.

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TABLE 13: Conditions Reported by Restaurant Workers, by Wage Group
Conditions Reported by Restaurant Workers, by Wage Group Do not get regular raises Do not receive paid vacation days Do not receive paid sick days Do not have health insurance Have not been promoted in current place of employment Have not moved up in position from last place of employment to current Experienced overtime violations Worked off the clock without being paid hourly wage Did not receive health and safety instruction or training from employer
Source: Chicagoland Restaurant Industry Coalition survey data

Less than Minimum Wage 95.2% 100.0% 100.0% 80.8% 84.6% 80.8% 83.3% 20.0% 34.6%

Under Poverty Line 85.3% 88.4% 93.8% 57.6% 91.6% 77.2% 55.6% 35.8% 40.0%

Low Wage 73.3% 86.4% 95.9% 49.4% 68.6% 69.4% 24.9% 28.7% 31.2%

Living Wage 89.7% 85.6% 98.3% 54.8% 78.5% 72.9% 33.3% 24.1% 29.8%

kam, hong kong, delivery I came here 5 years ago from hong kong and I have worked in the restaurant industry for a year. When I first started in the industry I was excited because I had several different positions as a server. I later saw that there was no reason to be excited I always got paid below minimum wage, at one place I was paid $10 a day plus tips for working 9-10 hour shifts, I have always been paid between $0-$2.50/hr as a server. I decided that this wage was too low and I switched to delivery driver, as a delivery driver I was not paid an hourly wage and only received the delivery charge and whatever tips came from that delivery, I was required to provide my own car and pay for my own gas. When I switched my position I was forced to sign a paper to state that I was not an employee of that restaurant, when I got burned from chemicals on the job and my nail split open I could not ask to get gloves for protection because I had signed that paper, I was forced to bring my own from home. As a delivery driver with no hourly wage I was also forced to do side jobs, I washed the dishes, cooked, and bussed tables, with this extra responsibility I worked over forty hours and only occasionally received $30 a day. I also did not receive a break, workers were not allowed to eat in the restaurant, only occasionally when it was really slow, but since I was delivery I was able to sneak a lunch, I would deliver the food quickly then I would park my car and eat the lunch I had brought myself. The schedule I work changes week to week, sometimes I work three days sometimes four, this makes it impossible for me to plan my life and schedule for anything other than work, the restaurant wants a career commitment without providing me the career benefits. I do not have health insurance, I do not have sick days the boss is always unhappy when people call in sick, and they always tell us things like if you don’t come in today don’t ever come back. “If you don’t like working here there is the door,” is something we hear daily. All of the workers at the restaurants I have worked in were Asian immigrants and they treated us all unfair, they took advantage of our need to work. I like working in restaurant industry I just want to be treated with respect and I want this job to have career benefits because it’s my career.

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C h A P T E R Iv

Employers’ Perspectives

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C h A P T E R Iv

Employers’ Perspectives
Our interviews with employers in Chicago’s restaurant industry proved to be a rich source of information regarding the constraints under which they operate, thus leading them to engage in the practices described by workers in Chapter III: Workers’ Perspectives - often despite their best intentions and their expressed belief that restaurant workers are critical to their success. Our interviews with employers highlighted the principles and approaches adopted by employers pursuing the high road – those who manage to maintain successful businesses while ensuring that their workers earn a living wage and are guaranteed workplace benefits and safe work environments. As such, the perspectives summarized in this chapter can serve to guide further study of the industry, and, perhaps most importantly, lay the groundwork for initiatives developed in partnership by restaurant workers and employers. Our interviews with employers revealed that: ➜ Market volatility brought about by factors beyond employers’ control such as green trends in the industry, economic downturns, and changing tastes require significant flexibility on the part of restaurant employers. Worker productivity and low employee turnover are both important to profitability. Workplace practices intended to increase productivity, such as understaffing and longer, more unpredictable hours, can have the effect of increasing employee turnover, creating a dilemma that many employers face. The majority (58%) of Chicagoland restaurant employers interviewed elect to take the low road to profitability, offering low wages, even while stating preferences for some high road strategies. While employers recognized workers’ dependence on wages and overtime to earn enough to meet basic needs, they also reported a policy of keeping wages low and overtime pay to a minimum. Many employers stated that they would like to offer their workers health insurance, but maintain that it is almost impossible to do so due to prohibitive costs. It is possible to achieve profitability by taking the low road and paying living wages, providing benefits, and maintaining a safe working environment when there is a non-negotiable commitment to doing so. Fourteen (45%) of the 31 employers interviewed reported that they were able to invest in workers by offering higher wages, training, and advancement opportunities, and still earn a profit. Employers taking the low road, however, undermine restaurants following the high road approach.

➜ ➜

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A. Introduction and Methodology
In order to obtain a better understanding of factors that drive workplace practices, the Chicagoland Restaurant Industry Coalitioninterviewed restaurant employers in Chicago. With the assistance of students and faculty from De Paul University and other Coalition partners, we conducted in-depth interviews with 31 restaurant employers, including owners and managers, from September 2008 to May 2009. Employers were selected for interviews in a manner designed to gather data reflective of the distribution of the different segments - fine dining, casual/family style, fast food/quick serve – and sizes of Chicago restaurants. Interviews included questions regarding trends in the industry over time, factors affecting business practices, strategies for running a profitable business, workplace practices, and the role of the informal economy in Chicago’s restaurant industry. Overwhelmingly, 100% of the restaurant employers we interviewed recognized the important role that workers play in the vitality of the industry and the success of their businesses. The vast majority of employers described their workplace policies as supportive of workers and their development. However, when in-depth analyses of qualitative data from employers and worker responses to our surveys are juxtaposed, a more complex picture emerges. Both worker surveys and employer interviews confirm that some employers are paying living wages, providing comprehensive benefits, and ensuring healthy work conditions while successfully running a profitable business. Indeed, 22.3% of workers we spoke with reported being paid a living wage by their employers, and a similar share reported receiving workplace benefits. These employers, however, are the exception, rather than the rule. Employers also recognized that the low road to profitability - paying low wages, engaging in wage and hour violations, and cutting corners on health and safety, - is the path more often followed in the Chicago restaurant industry. While there are surely some “bad” employers who operate only for their own profit, at the expense of their workers, what appears to be more common is that employers espouse supportive workplace policies in theory, but do not implement them in practice. This disconnect can be largely attributed to lack of good management, absence of industry incentives rewarding good employment practices in the industry, and ineffective employment law enforcement mechanisms. Additionally, employers would clearly benefit from better guidance from the industry as a whole, including more education regarding their legal obligations, and enforcement of these laws. Although the workers are the ones who lose out in the short term as a result of low road workplace practices, interviews with employers suggest that the industry as a whole loses out in the long run.

B. External Factors Affecting Workplace Practices
In order to better understand the tensions and contradictions in the restaurant industry affecting employers and workers alike, it is important to consider some of the most salient external pressures on restaurant businesses in the local context. Employers we interviewed referred to two central factors that impact their business, workplace, and employment practices - the economy and “the greening” of consumer demand.

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TABLE 14: Chicagoland Interview Survey Sample by Attributes
Industry Segment Fine-Dining Family Style/Casual Dining Quick Service Total Position Owner Manager/general Manager Total Gender Male Female Total Length of time in industry Less than 1 year 1 – 3 years 3 – 6 years 6 – 10 years More than 10 years Total
Source: Chicagoland Restaurant Industry Coalition interview data

Number of Employers (%) 11 (35%) 15 (48%) 5 (16%) 31 (100%) 7 (23%) 24 (77%) 31 (100%) 18 (58%) 13 (42%) 31 (100%) 5 (16%) 1 (3%) 7 (23%) 6 (19%) 12 (39%) 31 (100%)

“With the economy the way it is obviously people are looking for value. I think that when you survey different products you know almost in any prices a good product is good for you its healthy is prepared and taste great. And you offer good service at any price that is valued. And now we’re suffering a little bit. And its a constant battle . I mean its a constant battle even when the economy is good. Got to stay new and fresh and remind people that you’re there. And to you know constantly to be touching up the holes in the wall always try and look new and fresh and always have the right product.” – Owner, 25 years in the industry, Fine Dining
The Chicago restaurant industry continues to be one characterized by robust growth, as shown in Figure 3. The number of restaurants in Cook County increased by 18.4%, from 8,009 establishments to 9,485 establishments between 2001 and 2008.36

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FIGURE 3: Growth in Food Services and Drinking Places in Cook County, 2001-2008
10,000 8,000 6,000 4,000 2,000 0

Number of establishments

2001

2002

2003

2004

2005

2006

2007

2008

Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages.

While almost all employers interviewed discussed the economic crisis as affecting the industry, they also said their own business was not substantially affected. In fact, despite the general perception that other restaurants were suffering, and statements that other restaurants have had to reduce prices and downgrade to meet consumer demand, most employers noted that they were not having to do so themselves, and that they were surviving the economic crisis by adapting to consumer demand for greater value. These seemingly contradictory observations reflect national trends. While the industry is generally perceived to be declining, the restaurant industry lost only one-quarter of the jobs that the rest of the economy lost from March 2008 to December 2008.37 And, while most other sectors continue to decline or lag, the restaurant industry has already begun to post growth as of July 2009.38 Certain segments of the industry, such as fast food and liquor sales, have been growing throughout the crisis.39

“My intuition is that restaurants are ever more popular. If that’s what you mean, what’s the sense of the audience’s relationship to restaurants? I think demand is up, it seems to me, I don’t keep count of course but it feels to me that there’s more and more restaurants opening all the time, and that suggests that there’s a kind of enthusiasm behind that. They’re sensing that, that if they open, if you build it they will come. .. My sense is that as more restaurants have moved in our business has just gotten better.” – Owner, 11 years in the industry, Fine Dining “Business has been pretty similar over the past – well as long as I have been working here about ten years things have been pretty similar. I would say not much has changed over the past ten years. Just recently, the past year or so the economy has been a problem but nothing much over the past ten years.” – Owner, Over 10 years in the industry, Family Style
Employers repeatedly emphasized the increase in liquor sales, which has helped them stay profitable during slow economic times. Historically, even during a recession, bars and restaurants that serve alcohol remain popular and experience increases in profit.40 Several employers reported revamping the menu by reducing portion sizes, lowering prices of food items, and including more drinks as that is where they derive most of their revenues. Economists report that alcohol is a counter-cyclical asset, a good that defies economic trends.41

“And the other thing is, and it’s not even a matter of the money sometimes, the climate right now is also warranting going green. And what is going green? You’re more conscious of food additives, preservatives, things like those. When you’re in a fine dining establishment there’s not a lot of room for plas27

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tic food. What you’re serving is real, is fresh. You’re not going to get a fish, if your fish isn’t fresh, then you’re not going to be able to serve it to your customers. So if you go to McDonald’s, or if you go to a place that’s offering you frozen fish, let’s say you come here and you’re getting a fresh fish. You might be paying a little bit more money, but you know what you’re ingesting is quality. There’s no chemicals in it. So I think that makes a difference in families. Because I see a lot of families coming into fine dining establishments right now. It’s quality of food versus the fast chemical intake.” – General Manager, 6 years in the industry, Fine Dining

GREEN TRENDS IN THE INDUSTRY
Several employers spoke of the need to “go green” in order to stay competitive in the industry. Industry research points to the increase in consumer demand for healthier alternatives and economically efficient restaurants.42 In Chicago, there are a few certified green restaurants and the trend seems to increase as more diners become aware of what they consume, how it is packaged, and food’s impact on the environment.43 The U.S. food system alone uses as much energy as France’s total annual energy consumption, and with “food miles” requiring an estimated 1,500 miles before being consumed, many employers spoke to how diners understood the unsustainability of these practices and were looking for “greener” options.44

“I think now people are more concerned about what they eat. You know, we have been inundated with how we see and what we see and it is overwhelming for a lot of people. I think our guests now rely on us to [offer the healthiest options and explain it to them]. So from our stand point we have to do their homework for them [by offering quality foods and then explaining it to them]. And [with my front of the house workers], they obviously have to be trained, and skilled, and educated enough to discuss those items with the table. [Guests] expect that from you. They want more information at the table, in bite sizes - pieces of information that they can process quickly in order to make a decision.” – Manager, 30 years in the industry, Fine Dining
Unfortunately, “green” restaurant employers do not always necessarily take the “high road” with regard to employment practices. While it is essential that the restaurant industry strives to lessen the environmental impact caused by food consumption, it is also essential that employers and consumers alike recognize the equal importance of treating workers with dignity and respect.

C. Strategies for Profit
To deal with many of the external pressures outlined above, employers generally agree that one of the most important elements of maintaining a profit is human capital. In fact, most employers in our sample agreed that reducing employee turnover and increasing employee productivity were both critical to maintaining profitability.

MINIMIZING TURNOVER
“I think that owners who underpay their staff are going to suffer the consequences. So I think it undercuts their business in the long run. It’s basically like a personal relationship, it pays to be accommodating and to be interested in the welfare of the other person because it’s going to make your welfare better, it’s as simple as that. I think employee turnover has a direct relationship to profitability in the sense that if they’re not happy with what they’re making and you’re paying everything that the business can pay them; they’re going to leave at some point. – Owner, 10 years in the industry, Fine Dining
Establishment of a loyal customer base and personable service was cited by employers as critical to promoting businesses and ensuring consistency in profit. Consistency and quality of staffing is of great importance to the employers we spoke with, who told us that keeping staff turnover low was critical to the success of their business. Most employers agreed that turnover is expensive and destabilizing to a restaurant workplace:
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“[Turnover] can cost a lot because it is tough to constantly have to train a new person. And if there is one chink in the armor it can have an effect on the whole process. And if we have to get a new dishwasher every month, then that would mean that we would have to find a new dishwasher and it would screw us up in not getting the food out fast enough and then the service isn’t as good.” – Owner, 27 years in the industry, Family Style “How do you keep your turnover rate low then? I guess just make sure that you treat your employees well and have a good work environment.” – Owner, 4 months in the industry, Quick Serve
Employee turnover rates in the restaurant industry often exceed 90% per year. Such high levels of turnover impose both direct and indirect costs on businesses. Direct costs include the time and money required to find, hire, and train replacement workers. Indirect costs include declines in productivity and quality of service causes by understaffing during the time it takes to find replacement workers, and by the inexperience of new workers. Previous research suggests that dissatisfaction with compensation is a major cause of restaurant employee turnover.45

Employers recognized the importance of keeping employees happy in order to decrease employee turnover, thereby fostering a satisfied and loyal customer base. Some of the strategies mentioned by employers as important to promoting good conditions for workers included training, promoting from within, paying sustainable wages and providing other “perks” ranging from workplace benefits to staff outings. In addition, many employers cited the overall importance of creating a good work environment and a sense of family.

I think in fine dining you see a lot of places that do well, perhaps you see servers and cooks are happy because they are busy and they are being paid well, because business is making money. So, a successful business is going to keep employees a little longer, because [employers] recognize that they are doing well and they want to keep their employees happy, because employees are the part of the reason that they are doing so well. I’d think as you go down the food chain from price points down, you would see more turnovers. Our restaurant is kind of in between, we are kind of casual- fine dining. It is not necessary for fine dining, because our prices are higher, because we are doing higher level food than most of restaurants on the street. So we don’t have high turnover at all. We know that we recognize our employees, this is the part of the reason we are doing well. We are trying to keep everybody happy, Yeah, I think, if you would go down on the food chain those fast food restaurant have higher turnovers, because employees are less gratified.” – Manager, 10 years in the industry, Fine Dining

WORKER PRODUCTIVITY
Employers reported that worker productivity is critical to running an effective and profitable business. There are differing theories regarding how to best maximize productivity. Some employers believe that training and investing in workers is best. On the other hand, some think that hiring fewer workers to perform several tasks is the most efficient way to move production. Fourteen (45%) of the 31 Chicago employers interviewed, however, echoed the belief that investing in workers – in terms of wages, working conditions, training, advancement opportunities, and more – is the most effective way to keep workers happy and productive.

D. Contradictions in Theory and Practice
“Litigation is a big issue for the restaurant industry. It’s one that the National Restaurant Association has worked on for years and always will.” – John Gay, senior vice president of government affairs and public policy for the National Restaurant Association.46

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“I mean there are so many people that are actually doing it [violating the law] that there is not really much – I mean you can say that like we can make it illegal blah blah blah – but like it’s really hard to enforce. Most people won’t even say that they are getting paid below minimum wage.” – Manager, 10 years in the industry, Family Style
While some employers are committed to pursuing the high road to profitability – providing workers with decent wages, benefits and training – these employers are unfairly undercut by those who choose to take the low road to short-term and unsustainable gain. In some cases, this approach is related to management and business skills; in others, it comes down to a lack of enforcement, support, and rewards promoting good workplace practices. What becomes clear, however, is that low road practices are counter-productive, ultimately having negative impacts on worker productivity, employee turnover, and restaurant profitability.

WAGES AND OVERTIME
“Well you know I think that in this market people are always looking cheat the systems a little bit because workers are one of your biggest expenses. So it’s tough – I can kinda understand both sides because people have to make a living but there is also you know hundreds and hundreds of people out there that are willing to work for less. So, umm it’s a hard one, but I can see both sides of the story.” – Owner, 4 months in the industry, Quick Serve “What is our overtime policy? Uhh, there really isn’t one. There is no extra pay for overtime.” – Manager, 10 years in the industry, Family Style
Despite some employers’ expressed understanding of the importance of paying good wages to keep staff happy and productive, the majority of workers in Chicago receive low wages, and are not paid for overtime. Several Chicago restaurant owners we interviewed recognized this contradiction.

“Eventually [low road employers] will drive themselves out. The turnover rate will be so high in those restaurants they will never be able to produce a great staff or maintain a good staff. In this business it’s a lot like sports. The better players, they want to be drafted to the better team so they will leave on their own, eventually. So I get the benefit of better qualified individuals, more skilled and they lose them in those restaurants.” – Manager, 20 years, Fine Dining
Unfortunately, employers who do not comply with the law do not leave the restaurant industry so quickly, as evidenced by the vast majority of workers who suffer under low wages and constant employment law violations.
“Raising standards for restaurant workers is no easy task and we must all share in the responsibility. Union and political leaders, academics and activists, faith leaders and community groups, employers and government agencies must all contribute in the different ways that we can to support restaurant workers in their struggle to be treated with respect and dignity.” - Richard L. Trumka, President of the AFL-CIO 47

Eighteen employers (58%) interviewed reported that labor costs are the first to be cut when business and profits are low because other costs, such as rent, may be non-negotiable. Such a practice robs employers, and of course workers, of the security and longevity that is gained through consistent investment in labor. Thirteen employers (42%), on the other hand, discussed various management strategies to avoid labor cuts, including scaling down portion sizes, lowering costs that are less visible to customers, such as having cloth napkins instead of paper, or reducing hours rather than laying workers off completely. Although several employers reported lower-wage workers’ dependence on overtime wages to earn enough to get by, many employers reported a policy of keeping overtime to a minimum, and some discussed creative strategies to
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avoid paying overtime altogether, such as paying slightly higher hourly wages overall, but not time and a half on the overtime hours, or paying by the shift or week. Many employers reported that they aspire to replicate the systematization and standardization characterizing chains and fast food restaurants, such as structured employee review policies and regular raises. However, the majority of non-chain employers said that they gave workers occasional raises based on perceived merit rather than conducting regular salary reviews. One notable exception was Jim, a family style employer that has been in the business for more than 30 years, who reported paying at least one dollar above minimum wage for all employees, investing 10 days of training for front and back of the house employees, and providing yearly raises and promotions to his staff. Without the validation provided by regular reviews and raises, workers will invariably leave in search of jobs with better opportunities.

“Well, as long as I’ve been working in the business, there are a lot of grey areas. A lot of restaurants employ illegal aliens. They turn a blind eye by paying employees in cash. They are doing things that are obviously illegal. But I’ve never seen it fully cracked down upon. Here we do everything as by the books as possible. That’s just the way we do it. I know that a lot of restaurants that cut corners; you don’t pay payroll tax if you pay someone in cash. There are ways to get around it and it is obviously illegal. I’m not going to judge anyone for doing that. It’s a tough business to be in, anyway to cut corners and make money, a lot of places will do it. I think some things are little more morally unsound that others. There are certain things that are grey areas as far as what is right or wrong. Obviously the law states a certain thing. I’m not going to judge other restaurants but if they are mistreating their employees or if they are not giving fair wage because they can get away with it, well I don’t think that’s fair and I don’t condone. As long as it’s a mutually respectful relationship and the employees are being paid for. There are things that happen obviously. It doesn’t happen here but I’ve worked in places where people get paid illegal.” – Manager, 8 years in the industry, Fine Dining
When asked it if was possible to pay a living wage and still make a profit, many employers felt it was difficult, but not impossible. Commitment to doing so and an acknowledgement that it was a non-negotiable overhead determined whether or not better wages would be paid. The examples of successful employers who have stood by such a commitment demonstrate that building labor costs into operating costs from the outset and providing living wages and benefits to workers can be consistent with success in the restaurant industry.

BENEFITS
“We do not provide many benefits, other than free food and bonuses. My wife is the one who is more ethically minded about that than I am, I’m like if we have money let’s do what we can do. She has some kind of healthcare for our partner, but for the employees no. We just can’t afford it. It goes back to there being no [funds for it], after everyone’s paid and bonuses are given out, there’s no money left over. In the best of all possible worlds we’d like to do that.” – Owner, 11 years in the industry, Fine Dining
Restaurant employers overwhelmingly reported that it was impossible for them to provide health insurance benefits to their employees with the exception of chain/franchise establishments,. Many employers cited prohibitive costs and administrative burdens as the most significant obstacle to offering benefit packages. When asked if they would be interested in a plan specifically geared to restaurant businesses covering multiple employers, and particularly smaller businesses, a large majority of employers we interviewed indicated that they would be.

“Our wages are totally competitive. We actually conduct surveys on our own to see what our competition is offering. We include hotels as well as other restaurants that we think is at our level. We look at what they are paying their staff and then we decide, if we are not there we are going to get there. We do the same not only in hourly rates but also in benefit packages. We also find out what other people are offering and if we don’t have that benefit we make it available.” – Owner, 30 years in the industry, Fine Dining
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“We don’t have 401K or any kind of retirement. We provide our managers, certain managers, with health insurance. We also provide Aflac. We don’t pay it, but our employees can pay for that as a payroll deduction which is tax deductible but it reduces their taxes because they’re paying for it pre-tax but so that we offer and we offer other benefits, like the kitchen staff, they all get to eat for free during their shift. Every year we have been open, we have also given bonuses during our holiday party in January. But last year was particularly difficult so we gave gift certificates to the restaurant, so we had to be a little more creative last year.” – Manager, 3 years in the industry, Family Style
Multiple-restaurant owners and restaurant chains are able to provide worker health benefits because they are able to negotiate good rates based on volume, while small, single-location businesses simply do not have the institutional size and strength necessary to absorb the costs associated with providing benefits to a small number of employees. Chains and franchises had the most standardized policies and practices with regards to benefits, including sick and vacation days. Few other employers reported offering these benefits.

TRAINING
“[I spend] as much time as it takes. Because if I find that a worker is capable, if they’re a little slower in the training process, that’s fine. It’s okay. Because I know at the end it’s going to be better for me. There’s nothing quick about training. I mean, I’m still training. I think life in general is a training process, so when I train employees, I take as much time, if I find qualities in them that are acceptable to me, then I will take as much time as necessary to train that employee, because I know they’re going to give it back to me, and they’ll keep with me. So longevity is key in training. So I want that person, that investment to stay with me for awhile, so I’ll take my time training them.” – General Manager, 6 years in the industry, Fine Dining
Training restaurant workers is important for health and safety reasons as well as to enhance worker productivity. Training is also an investment in workers as a means to promote mobility and longevity in the workforce. The benefits of making such an investment are a well-trained staff, low turnover rates, and ultimately lower costs over the long run. There is, however, a great deal of variation in the types of training available to restaurant workers across the industry. Some employers agreed on the need for training – both to help a worker perform their job and to encourage mobility. Others fell short on providing training to all workers, focusing on workers in the front of the house and not providing training to back of the house workers.

“People from other positions are welcome to attend that training. It’s not geared toward specific positions in the restaurant. It’s geared towards our mission statements, it’s geared towards providing service, it’s geared toward respect, it’s geared towards having an attitude that we try to invoke here. We can instill that in our staff, if you can instill that in your staff you can transfer those skills to every position after that.” – Owner, 25 years in the industry, Fine Dining
Restaurant chains, regardless of industry segment, have formal training systems. These programs range in duration from one week to two weeks, and a formal review that takes place anywhere between thirty to ninety days from an employee’s hiring date. One chain in the quick service segment in particular stated that it considered employee training to be the second biggest factor in its success, after good management. Chains also spoke of cross-training to facilitate promotion from within. Despite looking to chains and fast food restaurants for inspiration in other areas, most non-chain restaurant employers we interviewed generally did not follow their lead with respect to training, generally reporting only informal on-the-job training, and only three employers reporting a structured program.

“[We train everyone in-house], but paranoid enough about sanitation that we have an outside training thing, for sanitation certification. And that is expenditure. It’s not that big a deal, but to get somebody trained for the first time is like $200-some. But I think we found out this time, the more you train the cheaper it is. So if you keep sending employees it appears that the rate goes down, we just sent a guy for his first training and it cost us $85. And it should have been like $250 anyway, we do more of that
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than you’re required to. You’re required to have one sanitation-certified person on site at all times. We probably have three here most of the time, we probably have 5-6 sanitation certified employees, and there’s 2-3 of us here at all times.”
Of the fine-dining and casual non-chain restaurant employers who discussed training during our interviews, only two mentioned training back of the house staff. Data from interviews with workers and employers demonstrate that, contrary to popular perception, there is actually greater longevity in tenure among back of the house employees. Interviews with employers demonstrate that, contrary to popular opinion there is actually greater longevity in tenure among back of the house employees, and higher turnover in the front of the house.48 As explained by one fine dining employer who has been in the industry for 12 years, “I can’t keep turnover low [in the front of the house, but] all of the back has been with us since we opened.” Nonetheless, our data also indicates that workers in the back of the house are much less likely to be promoted, (see Chapter V: Segregation & Discrimination) suggesting that employers are missing the opportunity to train and invest human capital into those employees who are most likely to stay with the establishment in the long-term.

“Our servers always get tipped at about 20% and that’s part of why we’ve kept them. We have this woman who’s been with us… we’ve been open 10 years; she’s been with us about 8. This is her only job, and for much of that time we were only open breakfast and lunch, and that’s what she works, breakfast and lunch days, Tuesday through Saturday and is happy with what she makes, apparently.” – Owner, 10 years in the industry, Fine Dining
Some employers recognize the value of training all staff – not just those who regularly interface with the public or who represent the “public image” of the restaurant. One owner who has been in the industry for seven years reported providing training to all employees, treating training as an investment, and even spending “as much time as it takes” to train her employees. According to the owner of this fine dining establishment, “training is a process, so when I train employees, I take as much time, if I find qualities in them that are acceptable to me, then I will take as much time as necessary to train that employee, because I know they’re going to give it back to me, and they’ll keep with me. Longevity is key in training. So I want that person, that investment to stay with me for awhile, so I’ll take my time training them.” This employer also clearly recognized the importance of training good managers, to avoid management’s non-compliance with the law, verbal abuse, and other behaviors that might create greater liability for the employer. The onus falls upon ownership to ensure that management helps them remain off the low road.

E. Conclusion: The High Road is Possible
“I’m going to guess about 30% of [my workers have received promotions]. A lot of my staff now started as buss boys and are now waiters. Some of them are my best waiters and some of them actually started as dish washers. Some started as dish washer and became bussers and then became expediters and then became food runners and then became servers and bartenders and then became banquet captains. We have a number or had until recently a number of managers here who started out as bussers and now I have a busser who is now our general managers, upstairs in the our other restaurant. You see the opportunity, you have to be prepared for it, put yourself in that position and when that opportunity comes your way its to be considered for. After that really the sky is the limit.” – Owner, 22 years in the industry, Fine Dining

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The Restaurants at the East Bank Club, Maxwell’s at the Club and the grill, are some of Chicago’s finest establishments and EBC believes that its success is due in large part to its loyal employees. “The most important thing for us is not to have turnover…. it isn’t about me, it’s about that relationship that that server, busser, host/hostess, bartender, whatever, has with the member (customer),” says Mike. Mike Romano grew up in the restaurant industry, and has been operating the Food and Beverage Department at the East Bank Club for 23 years; in all his time there the East Bank Club has been committed to investing in its staff. Workers at the East Bank Club’s restaurants receive higher that industry wages, “Our staff is making anywhere between $7-$10/hr as a server, the company pays them higher to keep them here, we realize we’re only as good as they are, our reputation is made by those employees,” Mike states. After 30 days all restaurant staff receives Blue Cross and Blue Shield medical/dental coverage, a 401k in which up to 2% is matched by the company, free ESL and other trainings. Restaurant staff at EBC also receive 7 holidays that if worked result in double time pay, 6 paid sick/personal days a year, and escalating vacation, after 1 year 2 weeks, after 5 years 3 weeks, and after 10 years 4 weeks. The benefits are not only monetary but EBC firmly believes in providing its employees with the opportunity to move up within the company, “One of the managers of the operation is a twenty year employee that started as a server… we always try to offer stuff to the employees that are here first… we don’t need to go to the outside unless we absolutely have to,” states Mike. A large majority of employees at East Bank Club’s restaurants have made a career as a restaurant worker, and tenures of 10 years and above are not uncommon.

Low road practices ultimately have cost implications for businesses as a result of constant turnover as workers leave to find better paying jobs with better workplace conditions. Turnover has been shown to negatively impact productivity and profitability, thereby resulting in realities contrary to employers stated goals.43 Some employers reported that low road practices implemented by their competitors, such as minimum wage and overtime violations, had the effect of undercutting them. High road employers lose business to those pursuing the low road as the latter benefit from unfair competition by violating the rights of workers. This ultimately damages the industry as a whole and the public at large by pushing industry wages down even further, harming the very workers on whom their profitability depends, and spawning the proliferation of low road practices across the industry. The end result, as further explored in Chapter VI: The Social Cost of Low-Wage Jobs, is an increase in “hidden costs” to the public. Employers would benefit from greater awareness of their obligations towards their workers and of the value of implementing “pro-worker” practices, as well as more guidance in employing better business strategies. Further study in this area is also needed, particularly regarding the impact of low road practices on the proliferation of low-wage jobs and on employers pursuing the “high road.” Insights from empirical investigations for solutions to these problems are needed to help the Chicago restaurant industry realize its full potential as a source of both revenue and employment to the Chicago metro area.

“[We offer] health insurance definitely, dental, eye care, counseling all of the above. Again they can invest on the 401 k, we contribute to their 401k. We have progressive disciplines all mapped out for them in their orientation and it’s in the employee handbook. Again the more you have invested in an employee, especially in this environment because it is a private club the members get to know their servers, they get to know their bartenders, they get to know their managers and they lose that person, they’re still asking for them weeks later. You know what ever happened to so and so. Not to mention that they have developed relationships a connection to those members. They have greater menu and wine knowledge, POS knowledge so it obviously expedited that process.” – Manager, 10 years in the industry, Fine Dining

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ChAPTERv

Segregation & Discrimination

Chapter V

ChAPTER v

Segregation & Discrimination
Our interviews with both workers and employers show that the experiences of restaurant workers across the industry are not uniform. Across various types of restaurants and employers, there is a stark division between the treatment and experiences of the workers in the front of the house and those who work in the back of the house. Additionally, factors such as gender, race, ethnicity, national origin, and immigration status have a significant impact on the nature and quality of the experiences of restaurant workers. Our research indicates that: ➜ Jobs in the restaurant industry are divided between those in the front of the house and those in the back of the house. Earnings, benefits and workplace conditions differ considerably between the two. White and U.S. born workers are employed primarily in front of the house positions, while the vast majority of immigrant restaurant workers are found in the back of the house. As a result, the impacts of poor working conditions in the back of the house fall disproportionately on workers of color. Race appears to be correlated with wages and upward mobility in the restaurant industry. Some employers discriminate in hiring and promotion. Several workers reported experiencing verbal abuse based on race, gender, language, or sexual orientation. They also reported being disciplined more often or more severely based on their race, gender, or sexual orientation.

➜ ➜ ➜

The informal economy is important to the restaurant industry. According to employers, undocumented workers are found in significant numbers in the industry because they are more likely to work for lower wages and under worse conditions.

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A. Introduction
The nature and quality of restaurant work in Chicago depends on various factors, including the type of restaurant, its location, and the employer. It also depends on the type of job and the value the employer places on the work performed. Our worker and employer data indicate that wages and working conditions also depend on a worker’s race, gender, national origin, and immigration status. Our research suggests that occupational segregation and discrimination, both in its apparent and more subtle form, is evident in the Chicagoland restaurant industry. Historical discrimination, residential segregation, and current discrimination in the industry mean that, in large majority, those with living-wage jobs are disproportionately white, and those with low-wage jobs are disproportionately immigrants and people of color. While the public at large is generally most familiar with overt forms of discrimination, more subtle and less recognizable discrimination occurs when seemingly neutral policies have a disproportionate impact on a particular group. For example, white workers are overrepresented in living-wage front-of-house positions, and while workers of color are never overtly told that they will not be hired in these positions due to their race, the result of seemingly innocuous hiring practices over time results in occupational segregation by race. Because workers’ experiences of discrimination were not the primary focus of this study, our surveys and interviews provide only a glimpse into these issues. The Chicagoland Restaurant Industry Coalition plans to conduct additional research in this area in the coming year, and strongly encourages both industry and worker analysts and advocates to pay greater attention to these issues.

B. Segregation by Occupational Structure, Industry Segment & Geography in Chicagoland’s Restaurants
“It’s especially in the front, there have been times that… almost everybody, the majority on the floor in the front are white.” – Owner, 11 years in the industry, Fine Dining
Jobs in the restaurant industry essentially fall into one of three categories: front of house workers, back of the house workers, and managerial and supervisory positions. Our research indicates that workers’ positions within this hierarchy determine their earnings, benefits, opportunities for training and advancement, and working conditions (see Table 15). Front of the house workers generally earn higher wages and have greater opportunities to increase their earnings through tips. As indicated by the data in Table 15, 47.2% of all front of the house workers surveyed reported a living wage (more than $16.48 per hour) compared to only 8.3% of back of the house workers. Additionally, more back of the house workers are subject to unsafe working conditions where they are at greater risk of injury and illness. They are also less likely to be afforded benefits such as health insurance and sick and vacation days, or receive health and safety training. Yet they experience a greater percentage of unsafe working conditions and workplace injuries, such as exposure to toxic chemicals (14.1%), cuts (55.6%), and burns (63.1%). There are, of course, some differences in wages and work quality among positions within each side of the house (see Table 15). For example, although both occupations would be classified as front of the house positions, compensation and working conditions differ considerably between bussers and servers. A closer examination of the 27 workers who reported earning less than minimum wage reveals the following: 4 were dishwashers, 10 were line cooks, and the remaining workers ranged in front the house positions, with 4 of them working as bussers and 1 as a server. Furthermore, bussers earn the lowest hourly wage among all front-of-the-house positions. From the workers we surveyed, bussers reported an hourly median wage of $8.26, much less than even the lower paying positions in the back of the house, such as prep cook ($9.88), line cook ($9.26), and dishwasher ($10.00). However, our analysis found the starkest disparities between front and back of the house positions. The median hourly wage reported by front of the house workers was $15.33, while back of the house workers averaged $9.50 per hour.

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TABLE 15: Differences in Job Quality by Restaurant Job Type
Front of the house jobs Wages Less than minimum wage Under poverty line Low wage Living wage Total Race White hispanic/Latino Black Asian Mixed Middle Eastern Total Workplace Conditions Do not have health insurance Experienced overtime violations have not received on-going job training from employer Worked when the restaurant was understaffed Unsafely hot in the kitchen Did not receive health and safety training have done something that put own safety at risk have done something due to time pressure that might have harmed the health and safety of customers Workplace Injuries have been burned while on the job have been cut while on the job have slipped and been injured while on the job have come into contact with toxic chemicals
Source: Chicagoland Restaurant Industry Coalition survey data

Back of the house jobs 7.7% 21.4% 62.5% 8.3% 100% 14.3% 57.7% 16.7% 6.5% 3.6% 0% 100% 64.3% 35.1% 30.3% 74.9% 32.0% 33.3% 37.8% 23.5%

3.9% 3.5% 45.4% 47.2% 100% 40.4% 23.8% 17% 9% 6.7% 2.2% 100% 59.4% 35.9% 40.3% 83.6% 23.8% 33.9% 33.3% 26.2%

30.5% 42.5% 10.8% 9.4%

63.1% 55.6% 11.8% 14.1%

“I’m sorry, come on, let’s state the obvious. Kitchen people are mostly Hispanic people, and bussers are also the Hispanic people. The ones with the least communicational English. Servers are just, depending on the place, it could-- just know how to speak and you can be a server, but then there’s other places where it takes more charisma and it takes more than just wanting to have a job.” – Female, 3 years in the industry, Server “I’ve been interviewing and job hunting for the last few months and for example, I’ve noticed that all of Lincoln Park, on craigslist will all be like-- send photo with resume, photo with resume, photo with resume. And you know, I used to think that to have a resume as a server was the biggest joke, like seriously?” – Female, 4.5 years in the industry, Bartender
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TABLE 16: Race Breakdown by Restaurant Job Type
Non-Hispanic Black Front of the House Workers Back of the House Workers Total 57.6% 42.4% 100% Non-Hispanic Asian 64.5% 35.5% 100% Hispanic 35.3% 64.7% 100% Non-Hispanic White 78.9% 21.1% 100% All Workers 57.5% 42.5% 100%

Source: Chicagoland Restaurant Industry Coalition survey data

As indicated in Table 16, our survey data shows similar concentrations of white workers in front-of-house positions, and workers of color in back-of house positions. Of all the workers in back of the house positions, 57.7% of them were Latino, 14.3% of them were white, 16.7% of them were African-American and 6.5% were Asian (see Table 15). An overwhelming majority of all back of the house workers were people of color (85.8%). When examining workplace benefits offered to each position, these differentials are even more striking. While less than one-tenth of all workers surveyed received health coverage through their employer (9.5%), of the 51 workers that were insured, 37 of them were front of the house workers (5 occupied management positions). A total of 57 workers also reported receiving paid vacations and 34 of these were front of the house workers (5 occupied management positions). Thus, white workers are more likely to land in front-of-house positions with greater access to benefits.

“And I’ve noticed that they follow a trend, that if it’s always this type that fills that position it seems like, then that, it’s almost looks if it was that they felt that women could only be servers then I would go into a restaurant and they would all look like me. So whatever, like if it was the dishwasher or the busser, then that’s one of the things I like about my current job, that’s not the case. I was blown away when I saw women dishwashers. Two! Floored. And saw multi-colors, and I had two AfricanAmerican managers. I was like, ‘Oh my God, I’m at home! Oh my God!’ Yeah, it was great. It was great. But that is the exception. Everything else is, we always had Hispanic dishwashers, Hispanic bussers, the servers are under 35, and young, and white. And the managers are white.” – Woman, 12 years in the industry, Bartender
Additionally, back of the house workers reported more frequently than front of the house employees that they had been injured on the job. While these results can be explained in part by the greater health and safety hazards associated with positions requiring use of sharp instruments and work near hot ovens or with toxic chemicals, they also appear to be related to workplace practices. Despite the fact that they work in more dangerous environments, 33.3% reported that they did not any receive health and safety training (see Table 15).

SEGREGATION BY SEGMENT
“In fast food they thought that the women could better handle the stress. We’re better at customer service. Like she said the males they would rather have jobs where they don’t have to think or deal with people. I thought maybe it should have been rotating. You know, everybody should get a piece of the stress and the maintenance. That’s how I felt.” – Male, 1 year in the industry, Prep Cook
While all restaurants are in the business of serving their guests a meal, factors such as ambience, type of service, and type of targeted patrons segment the industry into three categories which vary markedly with respect to wages, working conditions, and workforce composition. In this report, we categorize those segments as “quick-service” or fast-food, family-style and franchise, and fine-dining or “tablecloth.” The industry has the potential to provide living-wage jobs, particularly in the fine-dining segment of the industry. From our survey data, the most significant difference between the segments was wage. The median wage differential reported by workers was significant. Fine-dining workers averaged $14.61 per hour, while workers in family-style
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establishments averaged $13.50 per hour and workers in quick-service averaged $9.00 per hour. 22.3% of all workers surveyed reported earning a living wage, or more than $16.48 per hour. Many workers reported earning more than $50,000 per year, and some above $100,000 annually. It is the $40 price point per meal at these establishments, along with higher tips, that offers employment with higher earnings than the other two segments of the industry. Our data indicates that race is also a mediating factor in gaining employment in particular segments. Eight out of ten survey respondents (80%) working in the quick service segment were a person of color. More specifically, 58.2% of all African Americans workers surveyed were concentrated in quick-service jobs earning a median wage of $9.00 per hour.

C. Racial Disparities in Wages & Working Conditions
As described in the sections above, the restaurant industry in Chicago is segregated by position and segment, and this segregation occurs mainly along racial lines. Workers of color reported lower median wages and higher rates of employment law violations and lack of access to benefits than white workers. Whites in our survey reported a median hourly wage of $14.56, while workers of color reported a median wage of $10.00 per hour. In addition, workers of color reported experiencing significant employment law violations compared to white workers. Findings from workers surveyed indicate that 84.6% of those who reported not being paid the minimum wage were people of color, even though workers of color comprise only 72% of our survey sample. In addition, 5.4% of all people of color did not earn the minimum wage, compared to 2.6% of white workers in our survey sample. 38.5% of African-American workers surveyed reported experiences of not being paid overtime, compared to 37.6% of white workers, and a quarter (25%) of Middle Eastern restaurant workers experienced management taking a share of their tips, compared to 16.5% of white workers. Neither Census and other government data nor our survey data can completely represent the reality of occupational segregation for restaurant workers by race, for a variety of reasons. One reason that Census data has limitations with regard to immigrant populations is that immigrants are less likely to speak to government surveyors for reasons of language barrier and fear. However, Census data is also limited with regard to non-immigrant low-income populations, which are generally undocumented for a plethora of reasons, including lack of access to telephone and other means of communication, lack of stability of address, and more. Further research into how discrimination based on race, ethnicity, and immigration status affects Latino and African-American workers is clearly needed – particularly given that segregation is not obvious to the single worker, and discrimination can be subtle. These experiences do not appear to be adequately addressed by current government data.

D. Discrimination in Hiring and Promotion
“You never know what kind of picture you’re supposed to send. Like a glamour shot? A webcam photo?” – Female, 2 years in the industry, Host “It was pretty well balanced. Well, all of the managers were white men, but aside from that everything else was balanced and age-wise too, it was pretty mixed.” – Female, 5.5 years in the industry, Server & Bartender

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JOB ADS FOUND ON CHICAGO INTERNET BULLETIN BOARD ON CRAIGSLIST
Bartenders and Servers (morton Grove)
Date: 2009-12-16, 3:49PM CST [Family Style Establishment] is now hiring experienced bartenders and waitresses. We are looking for fun energetic girls that want to have fun in the work place as well as making our guest have fun. We have full time and part time positions available. If you have a great personality and a hard worker we are willing to train the right person. Bartenders you don’t need a license to bartend. No need for a resume if you have one that’s fine. If interested please apply in person and ask for a manager any time 11am - 12am any day

Lincoln park High volume Bar: Bartenders/Servers (Lincoln park)
Date: 2009-12-08, 5:15PM CST We are currently looking for bartenders and servers that have a strong social network and live in or near the Lincoln Park area. Our current staff is young, energetic, hard working and attractive. Experience preferred but willing to train the right person. If this is you and you have a strong social following please send a picture and a short paragraph of why you are the right person.

Waitresses Wanted

Date: 2009-12-01, 2:00PM CST [Family Style Establishment] is looking for fun, energenic girls to waitress at our fast-paced Lincoln Park tavern. All applications are to be submitted through the Craigslist ad. Submit a resume and a picture. NO PhONE CALLS!!!!!!!!

Our interviews with employers revealed that they actively seek “attractive individuals” for better paying, better quality front of house restaurant jobs. Half of the employers we spoke with told us that attractiveness, “personality,” and ability to interface well with clientele were priorities when hiring for positions in the front of the house. A matched pairs audit testing study of discrimination in New York City’s restaurant industry indicated that measures of “attractiveness” include race, national origin and skin color50, all legally prohibited forms of employment discrimination under federal law.51 As a result, discrimination in hiring for front of house positions, however unconscious, likely contributes to the racial disparities between those employed in the front of the house and those working in back of the house positions.

“Yeah, in the two fine-dining restaurants, because aside from this I had no problem, it was only when I tried to work downtown. The reason was, oh you haven’t had this many years of fine dining, it didn’t matter, or just serving experience, which was a little bit upsetting for me, because I felt like the kind of serving I did was a lot more difficult than I knew it was at a Finnegan’s or a TGIFs, not to say that I thought it was better, just it was a lot more intense. But that’s usually what they say, or sometimes they don’t say. Um, a couple of times, they said, well, they said something, but it was just BS, so I just stopped listening after that. But my theory is that, they just wanted someone to come in and say, I’ve been working for like nine years, so that’s pretty much it.” – Female, 9 years in the industry, Server “Probably the whole issue about they want to hire pretty, skinny, hot girls. And if you don’t fit, you don’t have a good of a chance at getting hired. And it’s not fair, you can do the same things they can do, you can probably do it better because they know that they can make easy money and they don’t have to work that hard for it. And obviously we’re all going to use what we have to our advantage and I’m not saying that they’re wrong for doing it. But if they’re allowing them, if they’re put in the position to make more money just by their looks. I don’t think almost everyone woman can do it.” – Female, 7 years in the industry, Host
Conversely, when hiring for back of the house jobs, “work ethic” was the characteristic most commonly cited as important by the employers with whom we spoke. Further inquiry revealed that employers’ perceptions of an employee’s work ethic generally related to willingness to work long hours for low wages, perform tasks that others were not willing to, and work under poor working conditions. The fact that back of the house workers are largely workers of color and immigrants suggests that employers’ hiring decisions with respect to back of house positions are based,
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even subconsciously, on racial perceptions of who possesses the type of “work ethic” they are referring to. When asked about the demographic breakdown of employees in front and back of house positions, several employers responded that they hired those “who applied.” While they were aware that front of house workers are predominantly white and back of house staff are overwhelmingly people of color, they maintained that any disparities were a result of the fact that blacks and other people of color apply primarily for back of the house positions.
“I remember we were in a hotel, doing catering and the Black Caucus was there. One of the managers, she turns around and she says, ‘oh ‘D,’ do you know if they want ranch dressing or blue cheese dressing?’ I’m like, What the heck is wrong with you? And she was like, um, and she asked every single African-American person there. She asked us if they wanted ranch or blue cheese, or hot sauce but they ordered raspberry vinaigrette. I looked at her like she was crazy. Like did you just ask-- did you even just come close to asking that? And I guess because they get a lot of comments about them being racist. So that whole week they put us, put all the African-American people in the front. We hosted every event, at the head of the table, to let them, to show them that hey, we aren’t racist. So we’re going to show you these three black people. Any other time we would have been doing our own thing, but this event, we had to be mainstream in the front. We couldn’t do certain things because we had to do food. If we wanted to be on the sidebar doing something else different, no. I think they had a spaghetti and catfish line. They made us serve. Why the heck were we serving spaghetti and catfish? And other people would be like, can we serve, can we serve? And they would be like, no. you have to serve. And I would be looking like, I don’t even like spaghetti like that to be serving it. And they would be like, no but they think we’re racist, so you have to stand in front of the line. It’s like, wow. And I think my best friend commented on it. And she said, oh, I’m not being racist. My child is actually African-American. And I’m like, what the heck? So it was very racist, and it was racist all the way through. We stayed for like, I think I worked there for like three or four months, but it was-- when we first arrived it was like oh my god you guys arrived. They were staring at us so hard. But you know, you have a job to do and you do it. you try to make sure that you feel comfortable. So if you didn’t feel comfortable at the time, you stated that and you stated the reasons and we got apologies and stuff, but they even took our tips. I think every time we should have gotten a tip, because like the Black Caucus left us this big tip. I guess they were trying to portray that they weren’t racist, so they left the tip to the African American people. They left our tip and they took our tip. And then they said that they didn’t give tips. It’s like, I just got a tip a couple of weeks ago. When they took our tips I was so hurt. I just wanted to kill her because I needed that tip money, but it happens. you just have to simmer down and stay true to who you are.” – Female, 3.5 years in the industry, host & Server

Our data indicate that the stark differences in job quality between front of house and back of house positions are compounded by a general lack of mobility between the two types of positions. In fact, many workers described a “glass ceiling” between the back of house and front of house positions, which was extremely difficult to break through. Of all workers surveyed who never received a promotion, 71% were workers of color. As a result, once hired in back of house positions, workers are essentially trapped in the back of the house positions receiving low-wages. On the other hand, workers told us that promotion from front of house positions to supervisory or managerial positions was relatively common, even though wages for managers tend to be much lower.

TABLE 17: Barriers to Promotions Reported by Restaurant Workers
Responded that in the past 12 months they or a co-worker had been passed over for a promotion Of those who reported being passed over for a promotion… Reported that race was a factor Reported that language was a factor
Source: Chicagoland Restaurant Industry Coalition survey data

25.7%

42.8% 26.2%

E. Verbal Abuse and Discipline Based on Demographic Variables
“I’ve been yelled at by a few managers, one of them yelled at me really because he was having personal problems that day. Who knew, and he was yelling at all of the servers, and he has control of his tone of voice issues I guess. I had asked him for one of the later shifts, one of my co-workers with child wanted to take my shift. And I said I wanted it, but I would give it up because I was trying to be facilitating of her greater financial burden. And he yelled at me out of hand, when I said, ‘would it be ok if I switched this shift with Keisha?’ Really, really, really out of hand and ridiculous and disrespectful. I have very
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rarely been spoken to in the way that he spoke to me. Other times, things like, just little disrespectful things were very common. A lot of rumors get started by co-workers about other co-workers’ sexuality all the time. But that’s just like small stuff.” – Female, 1.5 years in the industry, Bartender
Workers we surveyed reported frequent verbal abuse (see Table 18). About one third of the workers who reported such abuse believed that the verbal abuse to which they or a co-worker had been subjected was motivated by race, gender, language or immigration status.

TABLE 18: Verbal Abuse Reported by Restaurant Workers
Responded that in the past 12 months they or a co-worker had experienced verbal abuse Of those who reported experiencing verbal abuse… Reported that race was a factor Reported that gender was a factor Reported that language was a factor Reported that immigration was a factor
Source: Chicagoland Restaurant Industry Coalition survey data

30.9% 31.1% 28% 21% 21%

Similarly, among restaurant employees who believed they or a co-worker had been disciplined more often or more severely than other workers within the past year, 21.9% cited race, language or immigration status as the reason.

TABLE 19: Discipline Reported by Restaurant Workers
Discipline Reported by Restaurant Workers Responded that in the past 12 months they or a co-worker had been disciplined more often or severely than others Of those who reported more frequent or severe discipline… Reported that race was a factor Reported that language was a factor Reported that immigration status was a factor
Source: Chicagoland Restaurant Industry Coalition survey data

Percent of Workers 21.9%

32.4% 21.4% 21.4%

F. Gender Discrimination
“I actually have trained someone for the position I was qualified for. I’ve done that and it was infuriating, but basically the way the restaurant where I was working was structured, my general manager only hires men for the bar, and would be really rude, generally to the female employees. And this is across all the women who work there. And he hired, I wanted to be promoted to the bar, I’ve done it and I know how to make all of our drinks, and that’s something each restaurant does a little differently, and he hired somebody who had gone to bartending school but had never had any serving experience, and I ended up training him not only on the floor but also on the bar. To not get the job. It was very frustrating.” – Female, 1 year in the industry, Barback “I think because, I can speak from a restaurant that I worked at for seven years, they had a boys club. There was no getting into the boys club and the only way that women were able to get around it was they created their own girls club. They were the catering managers, so if they had any power in the organization it was catering, and that’s it. It was always to be a boys club. They didn’t know how to train women effectively, they didn’t know how to support women effectively, and they did want women in these positions. I mean straight out just blatant discrimination.” – Female, 20 years in the industry, Bartender
Sixteen percent (16.2%) of respondents surveyed reported experiencing sexual harassment. However, the severer sto43

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ries told to us in longer worker interviews indicate that gender discrimination in general was very under-reported to surveyors in our study. Many women we interviewed commented on expectations to respond to sexual advancements, and the high level of flirting required of them on the job. A front of the house worker explained that her schedule depended on the discriminatory practices of management: “I left a restaurant a year ago, where they did a schedule based on the chef ’s preferred servers. And it was the white straight men, then it was the gay men, and then there were the women at the bottom.” Of respondents reporting experiences of sexual harassment, 21.6% reported it was based on sexual orientation. One front of house worker who was demoted explained: “in my restaurant it’s mostly white but one of the waitresses knew that I was (ahh) gay, and she said she got along with gay people, but then I ended up in the back. I have no idea why they decided to put me with all the Mexican workers in the back.” Women workers we interviewed often described the back of the house as a place where explicit sexual comments could be made and even physical contact in inappropriate ways.52

“I have been harassed. At the time at I was scared, I didn’t know what to think so I didn’t, I didn’t think about it in a moral sense. We did have a problem with our kitchen. I mean usually, most of the time, it might be an immigrant, or someone who didn’t really speak-- so I didn’t know what he was saying sometimes to me, so I would just be there all smiles, so I didn’t know at first. But I’ve been cornered in the big refrigerator like cornered there a couple of times. Literally. It was a really scary thing, but because of the way I am, and how I handle stuff, I just try to be really nice to people. Now that I think about it, as an older person, I probably would definitely have an issue with that. But then, I was new, and I was thinking like, well maybe he does this to everybody. But I don’t think he did. Then once I learned some Spanish and I found out what he was saying to me, I was like, oh this is really bad. This is like the definition, the textbook definition of sexual harassment. But you know, sometimes that does happen, and you don’t realize it. Especially since never once for me did I assume that he was saying anything bad to me, because I didn’t understand what he said. But yeah, and I’ve seen it even worse than that. I have seen a couple of managers or chefs, like at the last place I worked we had an open kitchen, so you worked directly with your chef. There are no cooks, technically, and I definitely saw what if it was me, I would have thought that it was sexual harassment.” – Female, 6 years in the industry, Server “There are so many things. Like when the manger said to the hostess that she should only wear high heels. I’ve encountered so many. This is when I was younger, having a manager brush up against you at the POS system. The tickle – I cannot stand the tickle, because ‘I’m a girl and I must be so cute, so I must want to be tickled,’ the inappropriate touching. This was back at the steakhouse, it would be constantly…the guys would talk about table 44’s breasts, or how after the Christmas party they went to the strip club with the managers.” – Female, 7 years in the industry, Server
Many of the women interviewed explained that restaurants frequently exclude women from certain positions, particularly the most lucrative wait staff and bartending positions in fine-dining restaurants, and instead concentrated them in lower paid positions at particular establishments. Women of color were also highly concentrated in the quick service segment of the industry. Over half (57.7%) of all African American women surveyed held jobs in the quick service segment, where the average hourly wage is $9.00. Our data also indicated that 34.5% of women experience more verbal abuse, and 74.6% had never received a promotion.

“A co-worker…Yeah, she left. They didn’t even fire him, she left because he was so bad. Because his uncle, who had gotten him the job, was a server who’s been there for over twenty/twenty-five years. So I think that had something to do with him not getting fired. I mean, I wouldn’t have been able to see him every day. There’s a little group, and they wouldn’t even be discrete about it. They would just say whatever was on their head at that very moment. Even with the customers. The guys would run into the back and ‘Oh my God, table four,’ and then another one would be like, hey let me go look. And they seriously would from all the way over there come and tell about, hey, you’ve got to go see this girl, or you’ve got to go see this, so they all go, like oh yeah, yeah. What do you get from that? Are you going to get a better tip? Probably not, you’re going to get a worse tip because you’re just being perverted and being obvious.” – Female, 4 years in the industry, Server
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Additional quantitative and qualitative analysis of women’s experiences in the industry, and particularly those of women of color and immigrant women, is clearly needed. The Chicagoland Restaurant Industry Coalition plans to further examine the role of gender in an upcoming in-depth study of discrimination in Chicago’s restaurant industry.
Nayhely, Mexican Immigrant, server I came to the US from Mexico 10 years ago, I live here with my mother and sister and am a single mother raising my son. I have been working in the restaurant industry for 4 years. I started as a tortilla heater and performing other general back of the house duties, and am now a bartender and server. In the four years that I have been working in the restaurant industry I have always gotten paid whatever the minimum wage is at the time, and the only time I have received a raise is when minimum wage goes up. I have never had health insurance, and I have never received paid sick days. Not having benefits has had a big impact on my life, if I get sick I have to decide between getting better and providing for my son because I cannot afford to not get paid for a day, if my son gets sick I have to decide between taking care of him and providing for him. I love the restaurant industry but because it does not provide career benefits I am forced to sacrifice my well being and forced to make tough decisions regarding my son’s care. I want to move up within the industry but sometimes it seems like it is impossible, at my places of employment there has been little opportunity to move up and I cannot leave my job to look for something else because I have to think about raising my son and providing for my immediate needs. I also am discouraged because I don’t fit the profile of restaurant management or of advanced positions in general, I have the experience and am completely competent in English but I rarely see Latinas in power positions.

G. Disparities in Wages & Working Conditions Based on Immigration Status
Immigrant workers in Chicago are more vulnerable to exploitation due to language barriers, lack of information about their rights, and fear of detention or deportation. Immigrant restaurant workers in our sample reported higher rates of employment law violations than U.S. born workers. Eight percent (8.4%) of immigrant workers also experienced minimum wage violations, a percentage rate that was three times the rate of U.S. born workers. However, federal law states that all workers have the right to minimum wage and overtime protections, regardless of status.53 On average, immigrant workers averaged $9.00 per hour, compared to $12.00 reported by workers born in the U.S. Immigrant workers also reported a higher rate of health and safety violations than U.S.-born workers. As shown in Table 20, 39.2% of all immigrant workers reported working in restaurants did not receive health and safety training, yet a higher percentage of immigrant workers worked in unsafe conditions and did something that on the job that put their own safety at risk.

TABLE 20. Immigrant Workers and Health and Safety Violations
Percentage of immigrant workers Unsafely hot in the kitchen Fire hazards in the restaurant Missing mats on the floor to prevent slipping Missing guards on cutting machines Done something that put own safety at risk Did not receive instruction or training about workplace safety 30.3% 23.6% 23.5% 28.4% 34.5% 39.2% Percentage of U.S. born workers 23.4% 15.1% 17.8% 25.6% 33.7% 28.2% Percentage of entire sample population 25.7% 18.1% 19.7% 26.8% 33.6% 32.3%

Source: Chicagoland Restaurant Industry Coalition survey data

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Luis, 10 years in the industry, Cook I have been working in the restaurant industry for 10 years always holding a back of the house position, usually working as a cook. In all my time in the restaurant industry I have only been paid minimum wage and the most I have ever gotten paid is $10/hr. despite having 10 years experience. I also have never had health insurance or paid sick days. If I get sick I take over the counter medicine to try and get better, I am only able to go to the doctor if I feel the illness is really serious. I have been burned on the job several times and because I am not able to go to the doctor I only put on burn gel and continue to work because I am not able to take the time off and am not able to pay the medical expenses. Once I called in sick because I had a fever and was feeling really ill, I had never called in sick and had even found coverage for my shift and despite this I was still punished and removed from this particular shift. I work with food and want to protect the customers and my co-workers; I do not want to spread my germs. I also work 6-8 hour shifts and do not get a long enough break to sit down and eat a meal. In my experience because I work in the kitchen, managers tend to yell at us, harass us, and treat us like we are not even human, like we are their pet.

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The Social Cost of Low-Wage Jobs

Chapter VI

C h A P T E R vI

The Social Cost of Low-Wage Jobs
Absent from much of the data and discourse regarding the restaurant industry is an assessment of the cost to consumers and taxpayers alike of low-wage jobs with few benefits and poor working conditions. While hidden, these costs are significant, ranging from increased public health risks to employers pursuing low road practices through social safety programs employed by some restaurant workers to make ends meet. A key finding of our research is that whenever restaurant workers and employers are hurt, so are we all: ➜ ➜ ➜ ➜ Low road workplace practices ultimately harm not only workers but restaurant consumers, employers pursuing the “high road,” and the public. Restaurant employers who violate labor and employment laws are also more likely to violate health and safety standards in the workplace. Violations of employment and health and safety laws place consumers at risk and endanger the public health. Failure to provide health insurance and paid sick days to restaurant workers can lead many to delay seeking primary or preventative medical care, ultimately increasing health care risks to workers and consumers, and contributing to increased health care costs. Poor health and safety conditions in restaurant workplaces, combined with low wages and lack of employment-based health insurance, increase costs of providing emergency care to uninsured individuals at public hospitals, thereby ultimately decreasing the availability of free health care services for those in need. Low wages and lack of job security among restaurant workers lead to increased reliance on unemployment insurance and social assistance programs such as welfare and housing and child care subsidies.

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A. Introduction
“The proliferation of low-wage jobs has an impact on public budgets and the availability of public services. Those earning minimum wage would qualify for and would need to rely on a number of government programs in order to make ends meet.” – Hidden Costs: The Public Cost-Wage Jobs in San Diego54
The low road workplace practices described in this report have impacts beyond those affecting members of our communities who are employed in the city’s restaurant industry. Predictably, they affect the quality of the food we eat when we dine out at an eating establishment in Chicago. In some cases, they can lead to increased risks to public health. They also have more far-ranging – and more hidden – effects on the local economy, social safety net, and ultimately, the local taxpayer. Restaurant employers who violate labor and employment laws are also more likely to violate health and safety standards in the workplace. These low road employers put the safety of the public at risk by overworking their employees, pushing them to cut corners, requiring them to do jobs they have not been trained for, failing to provide basic health and safety training, and creating conditions leading employees to work when they are sick or injured. The health and safety of both workers and consumers is compromised as a result. Workers who do not have employment-based health coverage and cannot otherwise afford insurance delay accessing treatment, often leading to the development of more serious medical conditions requiring more costly medical care. Because they receive low wages, they are generally unable to pay for the cost of that care, increasing uncompensated costs incurred by public hospitals. Furthermore, when workers are unable to earn enough to support themselves and their families through their jobs, they are forced to rely on public safety net programs to make ends meet. The result is a “hidden cost” of the restaurant industry in the form of indirect public subsidies to employers who do not pay adequate wages.

B. Endangering Public Health
“I’ve called, I actually was throwing up, I called my restaurant, I work evenings, and said I was sick. And they told me to come in anyway, which was really, really unsanitary. And miserable. And other times when I’ve had colds, I would think that my management would not want me. I’m glad I’m there working, because otherwise I wouldn’t be making money. I want to go in unless it’s really, really out of the question, but I don’t really think it’s sanitary for a place that serves food.” – Female, 1.5 years in the industry, Bartender
Our research findings strongly suggest that low road workplace practices prevalent in the Chicago’s restaurant industry can increase public health risks. For instance, 75.9% of workers we spoke with in the course of our study reported working while sick. Several workers reported needing to work while sick because they could not afford to take the day off. One front of the house worker explained, “Sometimes I sneeze or I cough into drinks. If I’m sick, I have to work. I am the only person working in the bar.” Ninety-six percent (96.2%) of workers surveyed reported that they did not receive paid sick days. During the outbreak of the H1N1 “Swine Flu” epidemic in early 2009, the president and surgeon general both urged people staying home to be the best way to minimize the spread of the flu.55 However, since nearly all food service workers lack paid sick days and earn low wages, staying home is not feasible for them. Thus, a lack of paid sick days and preventative health care contribute to the risk of the widespread illness among both restaurant workers and the public they serve.

“Or you’re sick. I’ve had some places say, well you still need to come in, but what I will say about a couple of those places is that they were really, they did care about us. So if they would ask you to come, but if you came, and you looked like crap, you know, they’d be like, okay. Go home. Which is kind of like, you’re mad now, because you’ve done all this work. But at least they saw okay, you really are sick. And I think that’s what they need to do, weed out, because some restaurants have been so mean about it.” – Male, 5.5 years in the industry, Server

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“I call in when I’m sick. Over the years I am like hey if I am sick I take a day off. I drink lots of tea. I bundle myself up so that I don’t get sick. I know if I do end up getting sick there is no way to financially take care of me.” – Female, 9 years in the industry, Bartender
Employers who force restaurant workers to work while sick are contributing to a public health challenge. The U.S. Centers for Disease Control and Prevention (CDC) in Atlanta estimates that noroviruses, a family of pathogens associated with outbreaks of foodborne illnesses, are actually more common in restaurants. In 2004, the most recent year for which data are available, 251 reported outbreaks of food borne illnesses across the country – involving 10,000 victims – were thought to be viral. According to CDC statistics, almost all were classified as norovirus-related, and 93 were norovirus outbreaks tied to restaurants.56

“If an employee stays home sick, it’s not only the best thing for that employee’s health, but also his coworkers and the productivity of the company.” – Commerce Secretary Gary Locke57
Timiko, Prep Cook and Shift Supervisor I have worked in the industry since I was 18, for over 4 years now. I started as a cashier in a quick serve restaurant and am now a prep cook and shift supervisor. In all of the years that I have been in the industry my wage has always been along the lines of minimum wage. I have wanted a raise and think that I deserve it because of my work ethic but have seen a lot of favoritism. Raises are only in existence, and treatment is only fair in the industry if you are close to management. In all the time that I have been in the industry I have also never had health insurance and I have never had paid sick days or vacation days. When I do feel ill I have to decide how sick I am and I have to wonder, is it worth being penalized for not coming in. If we call in sick they sometimes reprimand us, they change our shifts, they day we take off usually becomes our permanent off day so we basically have to be prepared to rearrange our lives if we call in sick. When I don’t come in to work it is literally because the illness has gotten so bad that I am puking and running a high fever, otherwise I have to show up. I feel like we are left with no choice because I want to get paid and I do not want to have to change my life because managers want to punish me for being sick. There is no way for me to tell a month in advance that I am going to be sick, but that is what they expect and if we cannot predict our illness we suffer the consequences

C. WORKPLACE PRACTICES AND CONSUMER RISK
Twenty-four (23.9%) percent of workers surveyed had done something as a result of time pressure that might have put the health and safety of a customer at risk. Employers pursuing a low road business strategy place enormous pressure on workers, and often cut corners on health and safety training, leading to workplace practices that endanger employee and food safety, and consequently public health. As demonstrated by Figure 4, workers who reported employment law violations at their place of work were also much more likely to report workplace practices such as failure to provide health and safety training, being required to work when the restaurant is understaffed or perform several jobs at once, and being asked to perform a job for which they are not trained. In fact, workers who experienced employment law violations were twice as likely as workers who experienced no employment law violations to be forced to do something under time pressure that put the consumers’ safety at risk. This combination of workplace conditions could have harmful effects on the health and safety of customers. Workers who reported that they had done something as a result of time pressure that might have harmed the health and safety of the customer were more likely to experience overtime violations (37%) and working “off the clock” without pay (39%) than the general survey population, 32.6% of which reported overtime violations, and 28.5% of which reported working “off the clock.”

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FIGURE 4:Linkage Between Labor Law Violations and Workplace Practices that Put Consumer Health at Risk
Any labor violations

Worker did not receive health and safety training from employer

36.7% 28.8%

No labor violations

Worker had to work when restaurant was understaffed

82.4% 80.1%

Worker had to do a job for which worker wasn't trained 46.8%

57%

Worker had to cut corners because of time pressures that might have harmed the health or safety of customers

28.4% 20.5%

Percent of restaurant workers Source: Chicagoland Restaurant Industry Coalition survey data

Paying workers wages below the federal poverty line hurts not just workers and their families, but everyone – from employers who pay higher unemployment insurance premiums to the taxpayer who pays more for, or receives fewer, social benefits. When workers have trouble making ends meet, they have no choice but to utilize food banks, housing and child care subsidies, tax rebates for low-income people, and other social benefits. As a result, more public resources must be devoted to these programs – or, more likely in the current economic climate, there are fewer public resources available to all of those in need.

According to the authors of Wages, Health Benefits, and Workers’ Health, higher-wage workers are more likely than their lowerpaid counterparts to have health insurance and health-related benefits, such as paid sick leave, and to use preventative care.58 Low-wage workers, meanwhile, are much more likely to forego needed health care because of cost and to report problems paying medical bills.

HEALTH CARE COSTS
“Insurance, benefits I mean I know it is expensive and I know this industry hurts a lot and it takes money to make money in this industry but I mean I’m fortunate enough that I had money saved up and I can afford my own insurance at this time but when my money is gone, you know. Knock on wood I’m healthy but God forbid something happens.” – Male, 4 years in the industry, Cook

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Our survey data indicates that the lowest paid workers in the restaurant industry are much less likely to have health insurance. Seventy-seven percent (77.3%) of those without health insurance were earning low and poverty-level wages. As a result, low-wage workers are less likely to be able to access primary or preventative care for themselves or their families. Data from other studies suggests that low-wage workers are much more likely to forego needed health care because of the costs involved, and to report problems paying medical bills.59 Additionally, workplace injuries among restaurant workers are endemic. Data from this and other studies suggests that restaurant workers often access emergency room services for a range of work related injuries such as burns, scalds, and cuts. When medical care is required, restaurant workers without health insurance are forced to seek treatment in emergency rooms at public hospitals, and are often unable to pay for the medical services they need. Eighty percent (80.3%) of workers going to the emergency room did not have health insurance and were not able to pay for their visit. When these realities are compounded by the fact that low-wage workers are also less likely to receive paid sick days, it is clear why restaurant workers often feel compelled to work while sick, increasing the risk of worsening health conditions and increased public health hazards. Previous studies have noted that where health care financing relies on employer sponsored health insurance, the public suffers as a result of “free riders” - employers who opt out of the system by not providing affordable health insurance to their workers, and pass the costs of their workers’ health care onto the public.60 Ultimately, it is other employers, workers, and the public at large who pay for these low road practices espoused by employers.

SOCIAL PROGRAMS
Our survey data also revealed that low-wage restaurant workers are, at times, forced to access social programs such as welfare benefits and housing and childcare subsidies in order to supplement low wages. Twenty-four percent (23.7%) of all workers surveyed reported accessing social programs at some point to supplement their wages. Fifty-seven percent (57.2%) of those who have accessed social assistance reported being recipients of Medicaid. Ironically, of the respondents who reported receiving public assistance of some kind, 44.4% of these workers accessed food stamps through the federally funded Supplemental Nutrition Assistance Program (SNAP). At the peak of the recession, the number of Americans receiving food stamps reached 35 million in June 2009, the highest number since the program began in 1962, with an average monthly benefit of $133.12 per person.61 Numerous studies have suggested that employers paying low wages rely on social programs to sustain their workers rather than paying better wages.62 By creating conditions that force workers to participate in social programs rather than providing essential benefits, employers are, in effect, receiving an indirect public subsidy for engaging in poor, and sometimes illegal, workplace practices. Such practices also have the effect of undermining other employers who do provide benefits, thereby creating disincentives to those who might otherwise take the high road to profitability.63 Existing literature concludes that this can lead to a downward cycle for wages and benefits across the industry, ultimately resulting in worsening conditions for workers, consumers, and the public.64 Clearly, further study is needed to determine the full impact of the prevalence of low-wage jobs in the restaurant industry on social programs in Chicago. What is clear from existing data is that failure to address low wages and the lack of health coverage for thousands of workers in the industry leads to increased costs to workers, employers pursuing the high road, and, inevitably, the public.
The kaiser Family Foundation reports that in federal fiscal year 2008, a majority of families using Medicaid in Illinois (54.1%) included a full time worker.65 It is clear that health insurance in the private market is not an option for these workers and their families due to their low incomes and the high cost of health insurance that impacts both employers and the employees. As a result Medicaid fills the gap providing essential access to health coverage for these employees and their families.66

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C h A P T E R vII

Conclusions & Public Policy Recommendations

Chapter VII

C h A P T E R vII

Conclusions & Public Policy Recommendations
B y weaving together industry and government data, existing academic literature on the restaurant industry, and the voices of restaurant workers and employers, we are able to obtain a clearer and more comprehensive picture of the Chicago restaurant industry. The restaurant industry holds enormous promise as a source of income and jobs to the region. Its particular importance as a locally tied, sustainable industry providing employment to workers without formal training, those seeking entry level positions, and immigrant workers whose experience is not recognized by other employers, is clear. However, our research confirms that, in practice, the majority of restaurant employers are unable or unwilling to take the high road to profitable and sustainable businesses, creating an industry of predominantly “bad” – low-wage, long hour, dangerous and dead end jobs for most of the industry’s workers. Additionally, the persistence of low road practices has the effect of compromising the health and safety of both workers and customers alike, forcing the city’s taxpayers to subsidize restaurant employers through social programs. Nevertheless, one of the major findings of our research is that it is possible to run a successful restaurant business while paying workers living wages, affording standard workplace benefits such as health care and paid sick and vacation days, ensuring adequate levels of staffing, providing necessary training, and creating career advancement opportunities. While commitment to doing so on the part of employers is a necessary ingredient to achieve this goal, additional public policy measures are also needed to help restaurant employers fulfill the potential of the industry to providing good, locally based jobs. Government and regulatory agencies should find ways to support and reward employers who take the high road, in order to facilitate a truly successful Chicagoland restaurant industry. Based on the results of our research, The Chicagoland Restaurant Industry Coalition makes the following specific recommendations: 1. Level the playing field by providing paid sick days and increasing the tipped minimum wage. For the benefit of not only workers but also consumers and employers, policymakers should level the playing field by requiring all employers to provide paid sick days to their employers. Policymakers should also raise the minimum wage for tipped workers to be closer to the minimum wage for all other workers. As described in our report, the lack of paid sick days among food service workers can result in public health problems for the entire region. Similarly, the tipped minimum wage of $2.65 is simply not enough for families to live on, forcing many workers to rely on public assistance. The lack of a level playing field on both of these issues ultimately hurts workers, consumers, and responsible employers. 2. Incentivize high road practices. Policymakers should consider initiatives and incentives that will assist and encourage employers to pay living wages and go above and beyond the law. Such initiatives could include rent and property tax incentives for employers who implement exceptional workplace practices, thereby enabling them to reduce fixed costs and invest more in workers. They could also take the form of subsidies to employment-based health insurance or support of collective health insurance provision across the industry. Given the high health care and public assistance costs associated with current practices, limited public expenditures in these areas could result in substantial savings to the taxpayer overall. We urge decision-makers to explore and implement such initiatives for the benefit of all residents in the Chicago region. 3. Promote opportunity, penalize discrimination. Policy options ensuring greater career mobility for workers of color should be explored, and racial discrimination in the industry addressed. Our research illustrates the impacts of the occupational segregation within the restaurant industry. It is clear from our findings that discrimination based on race and immigration status acts in concert with occupational segregation to keep immigrant workers of color from higher-paying and more sustainable positions in the restaurant industry. Policy makers should explore initiatives that encourage internal promotion and discourage discrimination on the basis of race and immigration status in the restaurant industry. These could include subsidizing training programs that help workers of color advance to living-wage positions.
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4. Labor, employment and health and safety standards should be strictly enforced. Workers suffering from egregious violations of labor and health and safety codes must be protected. Not only do federal, state, and municipal agencies have a responsibility to ensure that these laws are respected; they also have a responsibility to individual workers whose lives are often threatened by illegal workplace practices. They also have a responsibility to protect the public from the unsanitary conditions and public health risks associated with illegal workplace practices, and to protect law-abiding employers from unfair competition from those that do not comply. Local legislative bodies should consider policies that protect all stakeholders by considering a restaurant’s compliance with basic employment laws when granting government licenses, such as liquor and other business licenses, that are intended by statute for responsible business owners. Additionally, public resources need to be spent in order to enable government agencies to effectively carry out this mission. Elected officials should resources to these agencies, and thoroughly oversee their activities. 5. Promote model employer practices. Model employers’ practices should be publicized. The vast majority of employers we interviewed agreed in theory that high road workplace practices were better for both their workers and their businesses, decreasing turnover and improving customer service. However, they appeared unable to implement them in practice, citing external pressures and factors impacting their bottom line. Dissemination of model business practices such as those cited in this report could go a long way toward helping the vast majority of well-intentioned restaurant employers to not only do the right thing, but also increase their profitability, and therefore tax revenues from the industry. 6. Allow workers the right to organize. Governments, employers, and non-governmental social sector organizations should ensure that relevant initiatives foster and support organizing among restaurant workers and publicize the public benefits of unionization in this and other industries. Additionally, creative collective organizing efforts among restaurant workers which foster better wages and working conditions, enable restaurant workers to access health care insurance and other benefits, and facilitate advancement, investment and ownership in the industry should be supported through research, funding, and policy initiatives. Finally, development and dissemination of “know your rights” training for restaurant workers is clearly necessary. 7. Support further industry research. Further study and dialogue is essential. While the results of our research shed much needed light on the realities underlying existing statistical data, they also identify significant gaps in information currently available. There is a particular call for more detailed information regarding occupational segregation and discrimination and effective remedies to occupational segregation. Additional potential areas for further study identified by our research include: the factors influencing employers’ workplace practices and the needs that must be addressed in order to improve them, and the impacts on health care and public assistance costs occasioned by industry practices. Data and policy initiatives in these areas should be explored with the full participation of restaurant workers, employers, and decision-makers in order to ensure effective and sustainable solutions.
“how do we get America on the ‘high road?’ The answer, I believe, lies in partnerships – between unions and employers, between industry groups and community groups, between workers and academic and political leaders, between foundations and government agencies and schools and colleges.” – John J. Sweeney, ,former President AFL-CIO and President of the AFLCIO Working for America Institute’s Board of Directors 67

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Appendix and Endnotes

APPENDIX

Survey Demographics
The survey was administered by staff, members, and volunteers from the Restaurant Opportunities Center of Chicago (Chi-ROC) – a community based organization with significant contacts among restaurant workers and access to workplaces in the industry. A total of 582 surveys were conducted with workers, face-to-face in the vicinity of restaurants during breaks or at the end of shifts, and inside restaurants.

TABLE 21: Characteristics of Chicagoland Restaurant Industry Coalition Survey Sample
Percent of Sample Race hispanic/Latino White Black Mixed Asian Middle Eastern Sex Male Female Age Under 25 26 to 35 36 to 45 46 to 55 Over 55 43.7% 32.4% 10.6% 12.3% .9% Sample Size (number) 582 53.1% 46.9% 34.5% 28.1% 18.4% 7.9% 6.8% 7.9% Position Front of the house Back of the house Mixed Front and Back of the house Place of Birth U.S. Born Foreign Born Restaurant Segment Fancy expensive table cloth restaurant Family style (chain/franchise and non-franchise) Fast food or quick service restaurant 27.3% 26.7% 46% 63.1% 36.9% 40.8% 30.2% 29.1% Percent of Sample

Source: Chicagoland Restaurant Industry Coalition survey data

NOTES ON SAMPLE:
Stratified random sampling methods were chosen to ensure that our sample was as representative as possible. We used industry and Census data related to demographics with regard to race, gender, age, and county to select a sample that is reflective of the industry as a whole. Like all methods, our sampling methodology has strengths and limitations, which may have affected the results. Even though stratified sampling was used to identify subgroups within the target population, because workers were contacted on the streets and in communities in which restaurant workers reside, our sample was not strictly random. One of the greatest strengths of our outreach methodology, however, is the inclusion of populations typically underrepresented in the census. In addition, in-person surveys lead to high question-specific response rates. Using data from the United States Bureau of Labor Statistics, we were able to weight the sample to match the distribution of “back of the house” and “front of the house” staff in “full-service” establishments and “limited-services”eating places in Cook County’s restaurant industry.

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Appendix and Endnotes

ENDNOTES
Note: All URL’s last visited January 8, 2010.
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See the National Restaurant Association’s Restaurant Performance Index (July 2009). Available at: http:// restaurant.org/pressroom/pressrelease.cfm?ID=1838. Since 2004, employment of food service workers, particularly “Food Counter Workers” has annually been projected to increase faster than the average for all occupations over 10-year projection periods. See “Employment and Outlook” section at http://www.michigan.gov/ careers/0,1607,7-170-46398-111478--,00.html#Employment. See Table 4. Data from U.S. Bureau of the Census, Public Use Micro Sample from US Census (2000) and American Community Survey (2008). See Table 1. Data available from U.S. Department of Labor, Bureau of Labor Statistics. Current Employment Statistics. Accessed 1 December 2009 for July 2009. Available at http://www.bls.gov/ces/. The City of Chicago. Chicago Office of Tourism 2008 Statistical Information. Accessed 1 October 2009. Available at http://www.explorechicago.org/etc/medialib/explore_chicago/tourism/pdfs_press_releases/chicago_office_ of.Par.60218.File.dat/Statistics_2008.pdf. U.S. Department of Labor, Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Accessed 1 December 2009. Available at http://www.bls.gov/cew. U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Accounts. Gross Domestic Product by Metropolitan Area. Accessed 15 December 2009. Available at http://www.bea.gov/regional/gdpmetro/action.cfm. In 2008, QCEW estimated 171,902 employed in food services and drinking places. U.S. Department of Labor, Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Accessed 1 December 2009. Available at http:// www.bls.gov/cew. The “Leisure and Hospitality” supersector includes 1) arts, entertainment, and recreation, 2) food services and drinking places, and 3) hotels and other accommodations. See Table 1 for food services and drinking places as a subsector under “Leisure and Hospitality.” Data available from: www.bls.gov/ces. See Table 1. U.S. Department of Labor, Bureau of Labor Statistics. Current Employment Statistics. Accessed 1 December 2009. Available at: www.bls.gov/ces. Time series analysis from 1990 to 2008 in Figure 1 reflects this information as well. U.S. Department of Labor, Bureau of Labor Statistics. Current Employment Statistics. Accessed 1 December 2009. Available at: www.bls.gov/ces. Jennifer Ratttcliff. “Illinois Manufacturing Jobs Down 2.1% Over Past Year.” January 16, 2009. Accessed 1 December 2009. Available at http://www.manufacturersnews.com/news/release.asp?ID=157. This report is focused on the first two of these sectors. Within these sectors, we have identified three general subsegments of the restaurant industry which are presently untracked by government data and which were important in guiding our study and understanding the varying practices and strategies used by individual businesses. They are further outlined in Chapter III: Workers’ Perspectives. U.S. Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics. Accessed 12 January 2010 for Chicago-Naperville-Joliet, IL Metropolitan Division (2008). Available at http://www.bls.gov/oes. In 2008, QCEW 171,902 employed in food services and drinking places. See U.S. Department of Labor, Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Accessed 1 December 2009. Available at http://www.bls. gov/cew. Sharon L. Lohr, Sampling: Design and Analysis. Pacific Grove, CA: Duxbury Press, 1999.

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Elazar J. Pedhazur and Liora P. Schmelkin, Measurement design and analysis: An integrated approach. New York: Psychology Press, 1991. After the data were weighted, the percentage of the sample in each segment was as follows: fine dining 27.3%, family 26.7%, and quick service 46%. See Appendix for other characteristics of the survey sample. The survey sample included workers already employed in the industry, not trainees or workers from other industries who wished to work in the industry. Furthermore, all workers surveyed were employed at the time the survey was conducted. Steinar Kvale. Interviews: An Introduction to Qualitative Research Interviewing. Detroit: Sage Publications, 1996. “Campus Living Wage Resources: What’s a Living Wage?,” Living Wage Action Coalition. Accessed June 1, 2009. Available at: http://www.livingwageaction.org/resources_lw.htm. U.S. Department of Labor, Employment Standards Administration Wage and Hour Division. Minimum Wage Laws in the States, 2009. Available at http://www.dol.gov/whd/minwage/america.htm. U.S. Department of Labor. Fair Labor Standards Act and Amendments. Available at: http://www.dol.gov/elaws. Susan B. Coutin, Nation of Emigrants. Ithaca, NY: Cornell University Press, 2007, p. 179. Nola Sarkisian-Miller, “Many new immigrants find that the restaurant industry represents their best chance at employment,” Los Angeles Business Journal, 20 December 1999. ACCRA Cost of Living Index: Comparable Data for 303 Urban Areas, The Council for Community and Economic Research, February 2008. Accessed 1 November 2009. Available at http://www.gastongazette.com/ attachments/1203624730-costofliving.pdf. Chicago metro area refers to the Chicago-Naperville-Joliet, IL Metropolitan Division. Out of Reach 2009, National Low Income Housing Coalition. Accessed October 20, 2009. Available at: http://www. nlihc.org/oor/oor2009/. Michael Lynn, “Turnover’s Relationship with Sales, Tips and Service Across Restaurants in a Chain.” International Journal of Hospitality Management 21: 443-447; Julia Lane, “The Low-Wage Labor Market: Challenges and Opportunities for Economic Self-Sufficiency – The Role of Job Turnover in the Low-Wage Labor Market.” Accessed 10 December 2009. Available at: http://aspe.hhs.gov/HSP/lwlm99/lane.htm. Internal Revenue Service. Tips on Tips: A Guide on to Tip Income Reporting. Accessed 12 January 2010. Available at www.irs.gov/pub/irs-pdf/p3148.pdf. In addition to increasing the state minimum wage, Public Act 94-105 gives the Illinois Depart of Labor stronger author to enforce the minimum wage, overtime and wage payment laws. See http://www.ilga.gov/legislation/ publicacts/fulltext.asp?Name=094-1072&GA=094 for more information. U.S. Department of Labor. Fair Labor Standards Act and Amendments. Available at: http://www.dol.gov/elaws. Ibid. See also Rajesh D. Nayek and Paul K. Sonn, “Restoring the Minimum Wage for America’s Tipped Workers,” National Employment Law Project, August 2009. Available at http://www.nelp.org. See OSHA regulations regarding enforcement of health and safety standards. Available at: http://www.osha.gov/pls/ publications/publication.html. State of Illinois. Illinois Workers’ Compensation Act. Accessed 1 December 2009. Available at www.state.il.us/Agency/ IIC/act.pdf. U.S. Department of Labor, Bureau of Labor Statistics. Quarterly Census of Employment and Wages. Accessed 1 December 2009. Available at http://www.bls.gov/cew. U.S. Department of Labor, Bureau of Labor Statistics. Current Employment Statistics. Accessed 1 December 2009. 58

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Appendix and Endnotes

Available at: www.bls.gov/ces.
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Annika Stensson and Maureen Ryan, “Restaurant Industry Outlook Improved Somewhat in July as Restaurant Performance Index Posted First Gain in Three Months,” 31 August 2009. Accessed 1 September 2009. Available at http://www.restaurant.org/pressroom/pressrelease.cfm?ID=1838. U.S. Department of Labor, Bureau of Labor Statistics. Current Employment Statistics. Accessed 1 December 2009. Available at http://www.bls.gov/ces/. Jonathan A. Parker, “The Consumption Risk of the Stock Market.” Brookings Papers on Economic Activity, 2001, 279-348. “Alcohol Sales Climb During Recession,” Join Together From The National Center on Addiction and Substance Abuse at Columbia University. Accessed 10 December 2009. Available at: http://www.jointogether.org/news/ headlines/inthenews/2002/alcohol-sales-climb-during.html. Annika Stensoon and Sue Hensley, “Consumer Demand for Ways to Fit Quality Meals into Hectic Schedules, Shape Restaurant Trends in 2008, According to National Restaurant Association,” National Restaurant Association, 12 December 2007. Available at http://www.restaurant.org/pressroom/pressrelease.cfm?ID=1537. Lauren R. Harrison, “It gets easier being green for Chicago diners,” Chicago Breaking News Center, 26 August 2009. Accessed 1 December 2009. Available at http://www.chicagobreakingnews.com/2009/08/it-gets-easier-being-greenfor-chicago-diners.html. Holly Hill, “Food Miles: Background and Marketing,” National Sustainable Agriculture Information Service, 2008. Available at attra.ncat.org/attra-pub/PDF/foodmiles.pdf. See also Danielle Murray, “Oil and Food: A Rising Security Challenge,” Earth Policy Institute, 2005. Available at www.earthpolicy.org/. J. Bruce Tracey and Timothy R. Hinkin, “The costs of employee turnover: when the devil is in the details,” The Center for Hospitality Research, 2006, Report 6, No. 15. Fred Minnick, “Litigation woes defy reform: lawsuits that snare businesses in costly, distracting battles continue to emerge despite the industry’s efforts to clear up legal quagmires,” Nations Restaurant News, 8 January 2008.

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High Road Partnerships Report, AFL-CIO Working for America Institute. Accessed 10 January 2009. Available at: http://www.workingforamerica.org/documents/HighRoadReport/highroadreport.hym. Rachel King, “Turnover is the New Enemy at One of America’s Oldest Restaurant Chains,” Workfoce Management Online, April 2004. Available at http://www.workforce.com/section/06/feature/23/68/40/. See also Timothy Hinkin and J. Bruce Tracey, “The cost of turnover: Putting a price on the learning curve,” Cornell Hotel and J. Bruce Tracey and Timothy R. Hinkin, “The costs of employee turnover: when the devil is in the details,” The Center for Hospitality Research, 2006, Report 6, No. 15.

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The Great Service Divide, Occupational Segregation & Inequality in the New York City Restaurant Industry, Restaurant Opportunity Center of New York, 2009. U.S. Congress, Title VII of the Civil Rights Act of 1964. Accessed 12 January 2010. Available at http://www.eeoc.gov/ laws/statutes/titlevii.cfm. Sexual harassment is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964. For more information, see the U.S. Equal Employment Opportunity Commission, Laws, Regulations and Guidance. Available at http://www.eeoc.gov/laws/types/sexual_harassment.cfm. NLRB clarified that a worker’s immigration status is only relevant after the employer is found liable. See Issue Brief: Workplace Rights of Undocumented Workers After the Supreme Court’s Hoffman Plastic Ruling, National Immigration Law Center. Accessed 18 December 2009. Available at http://www.nilc.org/immsemplymnt/IWR_Material/Attorney/ Issue_Brief_Workplace_Rights_post_Hoffman_3-06.pdf. Hidden Costs: The Public Cost of Low-Wage Jobs in San Diego. San Diego: Center on Policy Initiatives, March 2004.

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Robert Gibbs, Secretary Janet Napolitano, John Brennan and Dr. Richard Besser, “Press Briefing on Swine Influenza,” The White House Office of the Press Secretary, 26 April 2009. “HHS Secretary Kathleen Sebelius, Sesame Workshop, and the Ad Council Launch National Campaign to Protect Families from the H1N1 Virus and Stay Healthy,” U.S. Department of Health & Human Services, 22 May 2009. Accessed 10 December 2009. Available at http://www.hhs.gov/news/press/2009pres/05/20090522a.html. Centers for Disease Control and Prevention, Norovirus: Technical Fact Sheet, National Center for Immunization and Respiratory Diseases, Division of Viral Diseases. Accessed 18 December 2009. Available at: http://www.cdc. gov/ncidod/dvrd/revb/gastro/norovirus-factsheet.htm. Norovirus Threat Spurs New Focus on Sanitation, SickLeave Policies, Germ Central. Accessed 18 December 2009. Available at: http://www.germcentral.com/industriessupermarkets-norovirus.html. Gary Locke, Secretary Kathleen Sebelius, and Secretary Janet Napolitano, “Federal Guidelines Encourage Employers to Plan Now for Upcoming Influenza Season,” Department of Commerce, Office of Public Affairs, 19 August 2009. Sara R. Collins, Karen Davis, Michelle M. Doty, and Alice Ho. Wages, Health Benefits, and Workers’ Health. New York: The Commonwealth Fund, October 2004. Ibid. C. Jeffrey Waddoups, Employer Sponsored Health Insurance and Uncompensated Care: An Updated Study of the University Medical Center in Clark County, Center for Community and Labor Research, July 2001. Roberta Rampton and Chuck Abbott, “Food stamp list soars past 35 million:USDA,” Reuters, 3 September 2009. Available at http://www.reuters.com/article/domesticNews/idUSTRE5825OT20090903. Annette Bernhardt, Ruth Milkman, Nik Theodore, Douglas Heckathorn, Mirabai Auer, James DeFilippis, Ana Luz González, Victor Narro, Jason Perelshteyn, Diana Polson, Michael Spiller, National Employment Law Project, UCLA Institute for Research on Labor and Employment, and UIC Center for Urban Economic Development. Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, 2009. Accessed 12 January 2009. Available at nelp.3cdn.net/1797b93dd1ccdf9e7d_sdm6bc50n.pdf. Ibid. The impact of such practices on other industries has been well-documented. See Arindajit Dube and Ken Jacobs, Hidden Cost of Wal-Mart Jobs, Use of Safety Net Programs by Wal-Mart Workers in California, Briefing Paper Series, Berkeley, CA: Center for Labor Research and Education, University of California, 2 August 2004; Hidden Costs: The Public Cost of Low-Wage Jobs in San Diego, Center on Policy Initiatives; Carol Zabin, Arindrajit Dube, Ph.D., Ken Jacobs, The Hidden Public Cost of Low-Wage Jobs in California. See also Annette Bernhardt and Heather Boushey, Confronting the Gloves Off Economy: America’s Broken Labor Standards and How to Fix them, July 2009. Available at http://nelp.3cdn.net/0f16d12cb9c05e6aa4_bvm6i2w2o.pdf. Ibid. State Health Facts: Illinois at a Glance. Available at http://www.statehealthfacts.org/profileind. jsp?ind=155&cat=3&rgn=15. Ibid. High Road Partnerships Report, AFL-CIO Working for America Institute.

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By the Restaurant Opportunities Center of Chicago, the Restaurant Opportunities Centers United, and the Chicagoland Restaurant Industry Coalition

Chicagoland Restaurant Industry Coalition partners include: Arise Chicago Burgess Law Offices Chicago Workers’ Collaborative UIC-Center for Urban Economic Development (CUED) Grassroots Collaborative Diana M. Lin, Northwestern University Sargent Shriver National Center on Poverty Law Ted Smukler, DePaul University UE Western Region University of Chicago Human Rights Program Women Employed Working Hands Legal Clinic The Coalition would like to thank the many students, interns, restaurant owners, and restaurant workers who devoted many hours to conducting surveys, interviews, and generally assisting with this project. In particular, we would like to thank the following Brooklyn College students for their assistance in inputting and analyzing survey data: Laura Khan, Alex Barnett, Piotr Pac, Juan Toro, Jeffrey Ribakoff, and Stephanie Scott. The Restaurant Opportunities Center of Chicago 77 Washington Street, Suite 1400 Chicago, IL 60602 Phone 312-629-2892

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