I asked my waitress what she makes per hour and she told me two dollars and eighty six cents. I thought my hearing had failed. She added that she was three months pregnant and wasn't sure if her employer would hold her job for her once the baby arrived, she had no idea if the company provided maternity leave.
I was visiting my family in Pennsylvania and had stopped at Applebee's for dinner in a working class city about forty miles outside Philadelphia. I asked my waitress about the economics of her job and she was more than willing to talk.
She said she worked an average of 45 hours a week. After taxes, splitting her tips with kitchen help and busboys her "company paycheck" amounted to approximately thirty dollars a week. This is the amount Applebee's or its franchisee was paying this woman for all of her available time.
Now that's what I call looking out for your employees.
Restaurant workers have their own Federal law when it comes to wages. The law requires that they be paid a minimum of $2.13 cents an hour against a guaranteed minimum wage of $7.25 per hour. If once tips have been added from credit card sales the employee doesn't earn at least $7.25 then the company has to pay the difference. So in the case of my food server she was making $4.39 in tip income to which the company is adding the $2.86 to get her to the federal minimum wage for food servers which is $7.25 an hour, not a living wage by any standard.
For years the restaurant industry has relied on the public to pay their help with tips, but at this particular Applebee's location tips are poor.
A group of 20 might come in and spend $400 and leave a ten dollar tip. Lots of people leave little or nothing.
According to the 2010 Census, 28.9% of all children in this city live in poverty, as do 15.9% of all residents over 65, which means that a remarkable 44.8% of the city's population lives in poverty. My waitress, while working full time with overtime, will soon be one of those people.
The median salary for a full time working woman is $24,700 in this city. My server however, was being guaranteed less than half that amount, more like $12,500, just slightly above the 2015 Federal threshold for poverty of $11,500 for a single person. Once the baby arrives she'll officially qualify as poor under Federal guidelines and taxpayers will be subsidizing her health care, nutrition for her child, possibly her housing, fuel costs and the rest, provided she can overcome long wait-lists to qualify for benefits.
This is not the life she's working 45 hours a week for nor what she wants and hopes for her child. Ironically, she told me she likes Applebee's and the people she works with, prefers serving food to people over all the jobs she's previously held.
I really like people. I really like to work here. It's a nice environment. I like being a server here.
When I asked her about health insurance, does the company offer a plan? She said that it was too expensive for her and she hasn't worked there long enough to qualify. With a baby due in six months, her health care will have to come from Medicaid once again to be paid for by taxpayers.
Meanwhile, the CEO of DineEquity Inc., the parent company of Applebee's, has an annual compensation package of nearly six million dollars. The company generated 681 million dollars last year selling franchises to independent operators for between two and seven million dollars a shot. DineEquity Inc. also owns IHOP and has 3700 restaurants in 20 countries, with over 400 franchisees.
Abuses of employees at DineEquity franchises and lawsuits in multiple states attest to a pattern of violations of the Fair Labor Standards Act, which is the federal law that regulates food service workers like my waitress. The U.S. Department of Labor is logistically unable to effectively oversee such complicated regulations for an industry that accounts for 14.4 million employees or 10 per cent of America's workforce. The restaurant business generated over 782 billion dollars last year according to its lobbying arm, The National Restaurant Association and lobbying is precisely what the Association does, spending millions of dollars a year on keeping in place rules that serve the interests of their largest and wealthiest members, including DineEquity.
While the Association talks about the small family restaurant as the engine of their industry, their web home-page is a who's who of franchises and multinationals that don't offer a true livable wage for their wait-staff. Besides the low pay, there have been multiple lawsuits against DineEquity and its partners, charging race discrimination and labor violations in California, Massachusetts, Missouri and Rhode Island. Here are some examples:
Employees are frequently asked to work overtime for straight time pay, have their tips split with kitchen and other help (which is illegal), are not given appropriate rest periods, are underpaid for performing work that has nothing to do with serving food or generating tip income.
In their defense, companies like DineEquity Inc. point with pride at the number of entry-level jobs they make available to people entering the workforce. They will also suggest that they promote from within. Their CEO was once a waitress at an IHOP restaurant. How remarkable these accomplishments would truly be, if their claims were matched by a straightforward hourly wage sufficient for a full-time employee to live on. Lots of young people flock to these franchises as a place to start their careers and make a living. They deserve better pay and better treatment.
What is needed in this industry is a reset - fewer Federal rules in exchange for a living wage for servers. Tips should be a customer's reward for exceptional service, not a rationale for a multi-billion dollar multinational to evade paying a fair livable wage.
Ask yourself, would the CEO of DineEquity Inc. be willing to change places with her own employee, the woman who served me dinner at $2.86 an hour?
Here's a young woman clearly trying to make her way in life by waiting tables, with a charming smile and a genuine welcome, a credit to the business that hired her. Soon, she will have two mouths to feed and will have to find affordable day care before she can hope to return to her job. How ironic then that DineEquity and Applebee's with hundreds of profitable franchises and hundreds of millions of dollars in profit, will be of so little help when it comes time for her to feed her baby.