Restaurant industry facts
This week, national labor groups are mounting yet another misleading offensive against an industry of 14.4 million Americans who work in restaurants. As an industry that provides employees with the fundamental skills they need to succeed in any career, and a ladder of opportunity to advance within the industry, we felt compelled to take this opportunity to set the record straight.
MYTH: The average restaurant worker makes minimum wage.
FACT: Only 5 percent of restaurant employees earn the federal minimum wage. And, those 5 percent are predominantly working part-time jobs and nearly half of them are teenagers in entry-level positions. The vast majority of restaurant workers earn above minimum wage.
MYTH: Increasing the minimum wage will have no effect on the number of current jobs or hurt job creation.
FACT: Arbitrary and dramatic increases to wages is not the solution to income inequality, and could result in hundreds of thousands of lost jobs. The nonpartisan Congressional Budget Office concluded that raising the federal minimum wage to $10.10 would result in 500,000 — and as many as 1 million — lost jobs. Raising the minimum wage would disproportionately impact entry-level positions, where unemployment rates are the highest. Expert economists predict that minimum wage increases in California, New York, Maine and other states will result in thousands of lost jobs.
MYTH: A restaurant worker’s pay cannot support a family.
FACT: The average household income for restaurant employees that earn the federal minimum wage is $62,507; and only 1 out of 4 minimum wage restaurant workers are considered heads of their house. Most minimum wage restaurant workers are supplementing a household income or are in school.
MYTH: These are dead-end jobs that don’t provide any opportunity for advancement.
FACT: One in three Americans started their working career in the restaurant industry and one in two adults has worked in the industry. Efforts to devalue or portray these jobs as inferior only hurt workers and feed a stereotype.
In reality, restaurant jobs provide valuable skills to inexperienced workers and offer opportunities for workers to advance their careers. Restaurant jobs provide pathways to the middle class for millions of workers regardless of their background or previous experience. It is one of the few sectors where an entry-level job can lead to management and ownership. Most restaurant employees advance from their entry-level positions: Nine in 10 salaried restaurant employees started in hourly positions. In fact, 80 percent of restaurant owners/managers started in entry-level positions — learn more about them here.
MYTH: No one can survive on the “subminimum wage” — the modern tipped wage.
FACT: The tipped model is often misunderstood. Under the Fair Labor Standards Act, by law no one in the restaurant industry should be making a “subminimum wage.” If an employee’s tips plus their cash wages don’t add up to at least the federal minimum wage of $7.25 or higher in most states, their employer is responsible for bringing the employee up to the required minimum. In fact, The median wage for tipped workers is more than $16 per hour.
The practice of tipping has traditionally attracted millions of employees to our industry. The current tipped model has strong support from American diners who are more than happy to promote a spirit of hospitality by rewarding good service. In a recent poll conducted for the National Restaurant Association by ORC, over 65 percent of consumers asked said they would keep with the current tipping system.