Opinion: How the current worker shortage is really a wage shortage

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Waiter in protective mask during COVID-19 pandemic, Chelsea, Manhattan, New York City

Opinion: How the current worker shortage is really a wage shortage

The argument for subminimum wage laws has evaporated. Now it’s time for political leaders to catch up.
January 4, 2022

The subminimum wage for service workers is a direct legacy of slavery and perpetuates some of the worst sexual harassment of any industry. And yet for years, Congress and the 43 states that still have a subminimum wage have been dragging their heels on ending it – despite widespread public support for raising wages.

Then something changed. During the pandemic, restaurant owners in New York and nationwide have seen their workers struggling more than ever to survive on poverty wages. When restaurants closed, many service workers couldn’t even get unemployment because under state law they earned too little to qualify. And for restaurants that have remained open, tips have gone down, while the demands on workers to enforce public health regulations have only gone up.

And then came the shortage of workers – not surprising, given the increasingly challenging working conditions amidst declining take home pay. Suddenly we saw something no one anticipated, fed up service workers – especially restaurant workers – walking off the job, tired of being paid less than a full, fair minimum wage while being harassed, spit on, and punched by customers angry about wearing masks.

Since the inception of the subminimum wage following Emancipation, when restaurant owners did not want to pay newly freed Black workers and invented the idea of tips as a replacement for wages, the restaurant lobby has claimed their industry would collapse if forced to pay their workers a living wage. But it turns out the current worker shortage shortage is really a wage shortage – and thousands of restaurants around the country and over 300 in New York have started offering wages far and above the subminimum rate. In other words, restaurant owners – some of whom are literally the ones who have fought tooth and nail to maintain subminimum wage laws – are now not only finding a way to pay much, much higher wages but actually doing so to save their restaurants and the industry. Indeed, that’s the clear lesson from the seven states that have “One Fair Wage” laws in place — not only are wages higher, but restaurant industry growth and sales are higher, too, all of which resulted in these seven states losing fewer restaurants during the pandemic. Now, across the country, the entire argument for subminimum wage laws has evaporated. It’s time for political leaders to catch up.

New York City restaurants are trendsetters for the nation, and the city’s policies also hold powerful sway in influencing the rest of the country for the better. Gov. Kathy Hochul has said she supports One Fair Wage because she understands the real harm subminimum wages are causing workers and our economy. And she has the power to end the subminimum wage and level the playing field for workers and restaurants across the state through a simple executive action. Indeed, statewide leadership is the only way to send a resounding signal to workers fleeing the service industry that these jobs will now be worth it, and also ensure that these temporary wage gains don’t evaporate if owners change their minds.

Ending the subminimum wage and raising wages is smart politics. Voters will enthusiastically turnout and help reelect political leaders that they see enacting real meaningful changes that make a difference in their pockets and their lives.

But it’s also the moral thing to do and the right thing to do for New York’s economy - and the only way local restaurants will be able to fully reopen. The opposition’s arguments have crumbled. There are no more excuses. If the pandemic has taught us one thing, it’s that we can’t go back to the way things were.

Saru Jayaraman
Saru Jayaraman is the president of One Fair Wage.
Tom Perriello
Tom Perriello is the executive director of the Open Society Policy Center.
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