Living on a Dime: Small Wages and Large Gender Wage Gap in Restaurant Industry, According to Recent Report

By Margaret Kran-Annexstein

If I were to tell you that there are workers in the United States being paid $2.13 per hour, you’d probably tell me that that’s impossible because the minimum wage in this country is $7.25 and anything less is illegal. Well, you’d be right of course, but unfortunately, regulations on the tipped minimum wage have not kept up with the federal minimum wage.

In February, the Restaurant Opportunities Centers United (ROC-United), in conjunction with the Institute for Women’s Policy Research and a number of other organizations, released Tipped Over the Edge: Gender Inequality in the Restaurant Industry. Among its other findings, this report exposes the restaurant business as an industry that has found a way to skirt the federal minimum wage, exacerbate the gender wage gap, and further reduce the economic security of employees by not providing health insurance or paid sick leave to most workers.

In 1991, the tipped minimum wage was 50 percent of the federal minimum wage. However, when the federal minimum wage increased in 1996, the tipped minimum wage remained the same and has not been adjusted. Today, under the Fair Labor Standards Act, the tipped minimum wage remains at $2.13 an hour, less than 30 percent of the generally accepted $7.25 federal minimum wage. Although some states choose to raise that minimum, these regulations allow the restaurant industry to shortchange a vast number of its employees—a disproportionate number of whom are women.

As a student with many female friends working in the restaurant industry to help pay enormous tuition bills, I was disturbed by the findings of this report. The reality is that tipped workers often must rely on the generosity of their customers to make a living. Technically, employers are supposed to pay the difference if a worker does not make the minimum in wages plus tips but this requirement may not always be upheld or enforced. As one woman from Fort Worth, Texas testifies, “I can’t tell you how many times I made less than $20–$40 a day during the lunch rush…LOTS…I don’t understand how restaurants get away with not paying their employees minimum wage…”

Gender Segregation in the Dining Room

The notion that women and men should be paid equal wages is also overlooked due to hiring practices in the restaurant industry that solidify the gender wage gap. Female restaurant workers make on average 79 percent of what men do because women tend to hold the lower-paid positions in the restaurant world.

Women, especially women of color, hold a disproportionate amount of jobs in lower-paying restaurants while men dominate fine dining establishments—where wages can be 24 percent higher than wages in family style restaurants. Women who do obtain positions in fine dining are seldom hired as captains or martre d’s, the higher ranking, cushier positions with more supervising duties and less reliance on tips. One account from Tipped Over the Edge quotes a general manager refusing to hire a qualified women of color saying, “You don’t have the look to be a maître d’, but I can hire you as a hostess.”

There are laws that effectually set in stone wage inequality because these different ranks in restaurants hold different minimum wage requirements (the restaurant industry is one of the only sectors where you can find this discrepancy).

Many restaurant workers simply do not have enough money to support themselves: servers are forced to use food stamps at almost double the rate of the rest of the population. Rather than hold employers accountable to their staff, taxpayers have become responsible for the livelihood of many employed people through the size of their tips and the generosity of state programs.

“Try Not to Get Sick”

Not only do many restaurant workers receive painfully low wages, they often cannot afford to stay home when they get sick. In fact, ninety percent of restaurant workers lack paid sick days. One testimony from Tipped Over the Edge quotes a laughing manager telling a sick employee, who was concerned that if she did not go home she would make others sick, to “try not to cough.” Ninety percent of restaurant employees also lack employer-covered health insurance, making it even more difficult for them to seek medical care. Not only is this a violation of workers’ rights, it doesn’t make me feel very safe when I go out to try the best veggie burgers in DC.

My friends have to work in these unfair conditions but, unlike many restaurant workers, they have health insurance from their parents and are not providing for dependent children. For a single mother supporting a child on her own, Tipped Over the Edge shows that the restaurant industry can be a hostile work environment that lacks adequate living wages. Clearly change needs to come to the restaurant industry.

Margaret Kran-Annexstein is a Communications Intern with the Institute for Women’s Policy Research.


To view more of IWPR’s research, visit IWPR.org

Literacy, Women, and the Workforce Investment Act

This blog was originally posted on the Workforce Innovation Team blog. In honor of March being Women’s History Month 2012, the Workforce Innovation Team has reached out to their partners who specialize in women’s needs and promoting positive public policy. 

By Jane Henrici

The Institute of Women’s Policy Research (IWPR) released in February our fact sheet showing our gendered analysis of the most recent (2003) National Assessment of Adult Literacy (NAAL) data. We find that low levels of literacy tend to hurt women’s earning levels more than those of men: “…women need higher levels of literacy than men to earn wages that are comparable with men’s.”

To address this issue, IWPR recommends that educational policies and programs take gender into account and consider adult education and literacy classes as of particular help to women, especially those with dependent children. IWPR research on women’s educational levels, workforce participation, and immigration integration, also finds a need for improved and targeted remedial and bridge opportunities, English language classes, and job training that will help women get better jobs and careers—including those at the highest levels of wages, in STEM fields. Like others with whom IWPR is partnered, particularly in our research on student parents as part of IWPR’s Student Parent Success Initiative, we see reauthorization of the Workforce Investment Act (WIA) as an opportunity for learning and training that responds to the needs across the different states to help prepare women workers for employment demands.

To get out of poverty, women must be able to earn enough to take care of themselves and their families and, to do that, women need to have the skills to begin careers and then move up in fields where jobs are growing, including those in the health and care work occupations. At a minimum, women are going to need to be able to read and, increasingly, they are going to need a postsecondary education and possibly a postsecondary degree. A number of public as well as private efforts, including WIA programming, can help women to get started.

Do you think WIA programming is key to addressing the inequality gap that women still face in today’s workforce?

Jane Henrici is a Study Director with the Institute for Women’s Policy Research.


To view more of IWPR’s research, visit IWPR.org

One-on-One: Filmmaker Brings to Light the Equal Rights Amendment

By Caroline Dobuzinskis

Kamala Lopez, Founder of Heroica Films, Inc.

This month is Women’s History Month and yesterday marked a milestone: March 22 marked the 40th anniversary of when the Equal Rights Amendment (ERA) first passed the Senate and was sent to the states for ratification. ERA is a proposed Constitution Amendment—first written in 1923 by suffrage leader Alice Paul—that would affirm the equal treatment of women and would prohibit discrimination based on gender.

IWPR interviewed activist and filmmaker, Kamala Lopez, who has made informing citizens about the ERA part of her mission as the founder and president of Heroica Films, Inc. Lopez is also the Founding Director of GlobalGirl Media’s Los Angeles Bureau , is the recipient of the 2011 Women of Courage Award from the National Women’s Political Caucus, and was recognized in 2012 as the 21 Leaders for the 21st Century Award by Women’s eNews.

Lopez, who has been acting since the age of seven, came to activism on the ERA through almost happenstance circumstances: while promoting her film about the first Congresswoman, Jeannette Rankin, she was shocked to learn that gender equality had not been ratified under the Constitution. In 2011, she connected with Congresswoman Carolyn Maloney (D-NY), who is also the lead House sponsor of a bill reintroducing the ERA. Maloney asked Lopez to help her create a campaign to build public support for bringing ERA up for a vote, which hasn’t happened since 1982.

A brief history on the ERA: First introduced in 1923, the ERA passed the U.S. Senate and then the House of Representatives and was sent to the states for ratification on March 22, 1972. Immediately after its initial passage in 1972, the ERA gained 22 ratifications, but the momentum quickly slowed as opposition formed. In 1976, no states ratified the amendment and, so far, only 35 of the necessary 38 states have ratified.  The ERA has been subsequently reintroduced in every session of Congress since the year the ratification deadline passed in 1982. Each time it has been reintroduced without a ratification deadline. The 2011 Walmart v. Duke sexual discrimination case shed new light on the ERA.

Lopez’s production company launched a multimedia campaign called the ERA Education Project that includes a website with news and information, as well as several PSAs (like this compelling one). “The problem with talking about the ERA is that people don’t connect it to their lives right now,” said Lopez. “There is a real lack of urgency about it.” Lopez has upcoming projects aiming to get women “on the offense” on the issue of equality under the ERA.

Lopez spoke with IWPR about her start in filmmaking, her inspiration for activism, and her upcoming projects. Here is an excerpt from the interview.

IWPR: Tell me more about your background and how your experience lent itself to your current role as a filmmaker?

Lopez: I moved to Los Angeles after [graduating from Yale with a bachelor’s in Philosophy and Theatre Studies] to pursue acting. After several years as a working film and TV actor, I came to the realization that if I didn’t want to remain in a powerless position, I was going to have to work on new skills and attempt to create and produce material.

I produced my first short film in 1995—the same year I formed my production company Heroica Films. Since then I have produced many short films, internet media campaigns, and the feature film “A Single Woman” about the life of first Congresswoman and pacifist, Jeannette Rankin.

I am in the process of putting together a documentary about the state of women’s rights in the United States and what we can all do to change the situation. I plan to cross the country talking to women about the issues that affect them and educating them on the need for ERA.

IWPR: What inspired you to start the ERA Education Project?

Lopez: Whilst doing women’s history research to incorporate into the film [about Congresswoman Jeannette Rankin] I learned that—although Alice Paul had written the ERA soon after women achieved the vote and believed this was the next necessary step towards women’s full participation in our society—it had not been ratified. That really stopped me dead in my tracks. It was as if a very large invisible elephant in the room had briefly become visible.

When I got back from DC [after showing the film, “A Single Woman”] I started doing some cursory research into the situation and was truly and finally aghast at what I perceive to be one of the greatest injustices of all time. And one that I believe is simply in place because people, like myself, are not aware of it.

Lopez with several interns from the National Organization for Women (NOW) at a press conference to mark the 40th anniversary of the ERA on March 22, 2012, in Washington, DC.

IWPR: What do you think that passing the ERA would achieve for women?

Lopez: Passing the ERA would do multiple things for women. Primarily, it would enforce equality in wages, health insurance, pension and Social Security…I believe that acknowledging women’s fully equal status would have a quantifiable effect on very serious issues that are undermining and injuring women every day. Issues such as international policy and the ratification of the [Committee on the Elimination of Discrimination Against Women], domestic violence and crime, rape, healthcare and reproductive rights, cultural bias, media exploitation and denigration, lack of childcare, maternal rights, religious oppression and discrimination within the military, among others.

Caroline Dobuzinskis is the Communications Manager with the Institute for Women’s Policy Research.


To view more of IWPR’s research, visit IWPR.org