Secrets of the Restaurant Biz

"Tipped Minimum Wage?" Take a guess at what your waitress'/waiter's hourly wage is in half of the states of the nation: $2.13 per hour — it's called the "tipped minimum wage." The average annual wage for food and beverage workers in 2010? $18,130, according to the Bureau of Labor Statistics. Behooves responsible patron to tip generously, don't you think? Now consider that the food and beverege industry's projected sales this year are $632 billion. Something's out of whack. It's all in a revealing June 2 Huffington Post story, "Minimum Wage for Restaurant Servers Remains Stagnant for 20 Years Under Industry Lobbying." Quoted in the story is LERA member and former waitress Sylvia Allegretto a Cal-Berkeley labor economist and researcher (pictured above at right) and co-chair of the Center of Wage and Employment Dynamics at the Berkeley's Institute for Labor and Employment Research.

Allegretto on wage stagnation in the restaurant biz: "This is part of the stagnation we've seen for all workers over the last 20 or 30 years. This industry is growing by leaps and bounds, but it's not paying a good wage. The fact is we have millions of workers in this industry, and a few of them do fairly well — mostly men, at high-end restaurants." There's "no health care, no sick pay, no vacation," Allegretto said. Servers get to cover those themselves. "I don’t know how anyone can defend a policy that’s been in effect for over 20 years, that’s eroded significantly in that time," she added. "Why should this industry benefit so much from this artificially low pay that’s instituted? ... People in economics have no clue that this has been going on for more than 20 years. People say, 'When I used to waitress it was $2.13.' Well, it still is." The potential good news: U.S. Sen. Tom Harkin (D-Iowa) has introduced a minimum wage bill that would raise the federal minimum to $9.80 per hour and tipped minimum wage to $6.86 per hour pegged to a 70 percent of future minimum wage increases.

The IRLE, whose current director is economist and longtime LERA stalwart Michael Reich (pictured at left), was founded in 1945 by a then-associate professor of industrial relations at Cal-Berkeley, Clark Kerr (pictured at right below). The ILRE mission: "dissemination of recent research — to other academics, to policymakers, and to the public, as well as training programs for California unions, community groups and business leaders." Two years later, in 1947, LERA's predecessor organization then with the moniker the Industrial Relations Research Association was founded. Kerr was president of the IRRA in 1954.

Kerr went on to serve as the first chancellor of the Berkeley campus and then as 12th president of the University of California system. Wikipedia reports that after Kerr wrote his seminal book, The Uses of the University, he quipped in a speech that the three purposes of the university were "to provide sex for the students, sports for the alumni and parking for the faculty." He was fired by Gov. Ronald Reagan and is reported to have said, perhaps apocryphally, he left office the same way he came in — "fired with enthusiasm."