Restaurant owners received 30 times more federal Covid aid than workers: report

According to a new To analyse released Thursday.

“Workers are making it clear they will not return to an industry that refuses to pay competitive wages.”

The report by advocacy group One Fair Wage and the Food Labor Research Center at the University of California, Berkeley, urges congressional lawmakers who are “now considering allocating tens of billions of additional dollars of public funds to restaurant owners” to providing additional assistance to employers. offering a living wage.

Restaurant owners have collectively received more than $73.2 billion in federal assistance since March 2020 through grants, loan forgiveness and tax credits authorized by Congress, the report notes. Meanwhile, below-minimum-wage workers — the majority of whom are women and disproportionately women of color — have struggled to get help.

The researchers compare the experiences of restaurateurs and workers:

To help them meet the challenge of keeping their business afloat during the pandemic, restaurant owners have had access to three different federal assistance programs: the Paycheck Protection Program, the Restaurant Revitalization Fund and the Food Credit. employee retention tax. Had they been able to access all three programs at the average amount awarded, an average restaurant operator with less than 500 employees could have obtained a total of up to $775,439 in grants, forgiven loans and potential tax credits.

While also facing enormous challenges paying rent and feeding their families, restaurant workers throughout the pandemic had access to two much smaller and more difficult-to-access federal relief programs. : federal unemployment insurance and a stimulus cash payment. In May 2021, One Fair Wage estimated that only 56% of initial unemployment claims reached workers several months into the pandemic. Almost two-thirds of workers surveyed said they had difficulty obtaining benefits. If he had been able to access the full amount of both programs, a restaurant worker could have obtained at most a total of $26,300 over 74 weeks (one and a half years) in additional assistance.

As the authors explain, the National Restaurant Association — led by CEOs of major chains with multimillion-dollar salaries — has managed to secure billions of dollars in subsidies for restaurant owners while “simultaneously lobbying against any raises.” wages for their workers”, allowing the industry to maintain the lowest paid workforce in the country.

Congress — which has kept the federal sub-minimum wage for tipped workers at $2.13 an hour for more than 30 years — has obliged, allowing companies to access funds with little or even more. no conditions favorable to the workers.

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From inadequate requirements governing employee retention, wages and salary in restaurant owner rescue programs to the structure of federal and state unemployment assistance, restaurant workers have been largely left behind in relates to Covid-19 aid, according to the report.

“In the first year of the pandemic,” the authors write, “many restaurant workers found themselves excluded from unemployment benefits offered in the $2 trillion federal stimulus package,” with some receiving $3,200. in recovery checks “at most”.

The report continues:

The CARES Act and US bailout gave workers a combined potential 74 weeks of unemployment insurance, totaling at most up to $23,100 in extended benefits on top of the insurance’s basic weekly benefit -unemployment. However, to be eligible for state unemployment insurance, workers were required to show a minimum [number] hours worked or minimum amount of wages earned over a specific “base period” – usually a period equal to one year (although this varies from state to state). In June 2020, two-thirds of service workers who applied to the One Fair Wage Service Workers’ Relief Fund noted difficulty accessing unemployment insurance; many indicated that they were deemed ineligible due to their below-minimum salary.

Workers’ reliance on less than tip pay has left them vulnerable to the incidence of underreported wage theft and cash tips, leading to workers receiving smaller weekly unemployment benefits or even seeing themselves outright refuse these allowances. In the case of employers under-reporting tips for restaurant workers, the workers were only qualified to receive a portion of their wages or appeared to earn “too little” and therefore were not eligible for a tip at all. unemployment insurance.

Given the widespread difficulties in obtaining unemployment benefits, the report notes that “millions of workers returned to work in restaurants in the summer of 2020″.

In fall 2020, however, “tipped workers reported that their tips had decreased, while health risks, customer hostility and sexual harassment had increased,” the report said. “When asked to apply social distancing, mask and Covid vaccination card rules to the same customers they needed to tip from to survive, workers reported that their tips had dropped even further – a point of key disruption for millions of workers.”

There has been a “mass exodus” from the restaurant industry due to a “lack of relief and stagnant wages” – particularly in the 42 states where tipped workers are still allowed to receive less than minimum wage, the authors write. Compared to their counterparts in the eight states that guarantee a full minimum wage plus tips, restaurant workers who earn less than the minimum wage are more likely to live in poverty and experience sexual harassment.

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A waitress takes an order during lunch May 22, 2020 at a restaurant in New Orleans.  (Photo: Sean Gardner/Getty Images)

Nearly one million workers left the restaurant industry during the pandemic, “unwilling and unable to tolerate poverty wages any longer”, the report said. “Of those who stay, 53% say they are leaving and 76% say the only thing that will get them back to work in restaurants is a full, decent salary plus tips.”

Now that they are “haemorrhaging” workers after “decades of uncompetitive labor practices”, restaurants are facing “the greatest staffing crisis of any industry”, the report points out.

Thousands of restaurants across the country responded by raising wages. One Fair Wage has tracked nearly 3,000 restaurants in all sub-minimum wage states that are now offering workers full minimum wage plus tips in a bid to recruit staff.

“These restaurants demonstrate that it is possible to pay decent wages and should be supported in their efforts to recruit staff by limiting relief to those responsible employers,” the report argues. “Offering relief to all restaurants, regardless of their wages and the treatment of workers, puts these responsible restaurateurs at a competitive disadvantage to restaurateurs, especially large corporate chains, who persist with below-average pay. minimum for tipped workers.”

“If members of Congress and state legislators consider granting more relief to taxpayer-funded restaurants,” the report continues, “they must simultaneously ensure that employees of these restaurants receive full, fair wages and viable with extra tips”.

“Workers are making it clear that they will not return to an industry that refuses to pay competitive wages,” the authors add. “If the sub-minimum wage for tipped workers persists, the restaurant industry is unlikely to recover from its growing labor crisis, no matter how much money the government federal distributes to business owners.”

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