Occupational Segregation & Inequality In The US Restaurant Industry

The Great Service Divide: Occupational Segregation & Inequality in the US Restaurant Industry

Methodology

The following methods were employed in this study:

Matched Pair Testing, sending equally credentialed pairs of white testers and testers of color to apply for server positions in 273 fine-dining establishments in Chicago (N = 95), Metro Detroit (N = 88), and New Orleans (N = 90) from May 2011 to August 2012.
Census Analysis, using the Census Bureau’s American Community Survey to compare the earnings of white workers and workers of color employed in Tier I FOH positions.
Worker and Employer Interviews and Focus Groups, for a qualitative analysis of segregation and discrimination.
Demographic Canvassing to measure the extent of visible occupational segregation in133 fine-dining restaurants.
Survey Wage Analysis to analyze wages, benefits, and other working conditions.

Restaurant Industry: Executive Summary

The restaurant industry employs nearly 11 million workers and is one of the fastest-growing sectors of the U.S. economy.1 Despite the industry’s growth, restaurant workers occupy seven of the ten lowest-paid occupations reported by the Bureau of Labor Statistics.2 The economic position of workers of color in the restaurant industry is particularly precarious. Restaurant workers experience poverty at nearly three times the rate of workers overall, and workers of color experience poverty at nearly twice the rate of white restaurant workers.

The restaurant industry argues that an increase in the minimum wage for tipped workers is not necessary because livable wages are available in bartending and serving (Tier I Front-of-the-House, or FOH) positions in fine-dining,5 but these livable wage opportunities are available to only a small percentage of workers.6 Additionally, previous research on fine-dining in New York found that those doors are largely closed to workers of color.7 This report replicates those findings and finds people of color in the restaurant industry often face:

A GLASS CEILING: Workers of color, with equal qualifications are granted living wage opportunities only 73% of the time, compared to white workers. Workers of color are denied upward mobility or entry into fine-dining, a situation that can be remedied through clearly defined and fairly implemented career ladders that would benefit all workers.

A LOW FLOOR: Workers of color face a race tax of 56% lower earnings compared to equally qualified white workers. The restaurant industry offers poverty wages, including a subminimum wage for tipped workers, and no benefits, necessitating one fair wage that will provide all workers with greater opportunities.

OR A LOCKED DOOR: Twenty-two percent of Black workers are unemployed, compared to 10% of white workers, among bartenders and servers currently on the job market. Massive unemployment among workers of color, in particular Black workers,8 requires stronger workforce development programs targeted at communities of color, and mechanisms to allow workers to compete fairly for job openings and promotions.

Building on the findings of The Great Service Divide: Occupational Segregation and Inequality in the New York City Restaurant Industry, this study provides a deeper analysis of apparent and not-so-apparent inequalities in fine-dining restaurants based on testing in three principal majority minority cities where the majority of the population is comprised of communities of color.9 Using a wide range of research methods, this Great Service Divide analysis demonstrates that the industry is failing to provide equal opportunities to all of its workers.

Using the American Community Survey, we compared the earnings of white workers and workers of color currently employed in Tier I FOH positions in the US. We found that the lack of workers of color and women in living-wage positions cannot be explained by a lack of education, or command of the English language.

After adjusting for these factors, we found that:

Workers of color in the US pay a “race tax” in the form of 56% lower earnings than they would have if they had the same qualifications but were white.
Similarly, women workers pay a “gender tax” of 11%.
Non-naturalized immigrants pay an “immigrant tax” of 57%.