Putting People First: Reimagining OUR Economy

What would our economy look like if it put people before profits? For one thing, nobody would have to accept the sub-minimum wage of $2.13, which many states allow for restaurant workers -- a legacy of slavery that marginalizes and impoverishes a wide swath of a workforce made up largely of people of color and immigrants. 

In this episode of Radical Imagination, host Angela Glover Blackwell speaks with Saru Jayaraman, president of One Fair Wage and director of the Food Labor Research Center at UC Berkeley, about the fight to raise the minimum wage for all workers and end subminimum wages. We also hear from USC Sociology Professor Manuel Pastor about solidarity economics, a radical but commonsense concept that challenges us to reimagine our economy and how it can prioritize the needs and interests of all people.

Saru Jayaraman is an academic at UC Berkeley and the President of One Fair Wage, a national organization working to raise wages for service workers nationwide. She was named one of CNN’s “Top10 Visionary Women”, a White House Champion of Change, a James Beard Foundation Leadership Award winner, and the San Francisco Chronicle ‘Visionary of the Year’. Saru authored Behind the Kitchen Door (Cornell University Press), and Forked: A New Standard for American Dining (Oxford University Press), and has appeared on MSNBC, HBO, PBS, CBS, and CNN.

Dr. Manuel Pastor is a Distinguished Professor of Sociology and American Studies & Ethnicity at the University of Southern California. He currently directs the Equity Research Institute at USC. Pastor holds an economics Ph.D. from the University of Massachusetts, Amherst, and is the inaugural holder of the Turpanjian Chair in Civil Society and Social Change at USC.

Pastor’s research has generally focused on issues of the economic, environmental and social conditions facing low-income urban communities – and the social movements seeking to change those realities. His current research culminates in his latest book, State of Resistance: What California's Dizzying Descent and Remarkable Resurgence Means for America's Future.

Angela Glover Blackwell: (00:06)
Welcome to the Radical Imagination podcast, where we dive into the stories and solutions that are fueling change. I'm your host, Angela Glover Blackwell. On today's episode, we look into why most U.S. restaurant workers are earning a subminimum wage of $2.13 cents an hour. And we learn more about the fight to end the sub-minimum wage by raising the federal minimum wage to $15 an hour, all through the lens of solidarity economics, an unconventional concept that defies the established financial norms simply by putting people first. In the past year, COVID has revealed the underlying inequalities in our society. Three months into the pandemic, 6 million restaurant workers had already lost their jobs. Today, people who work in the industry are twice as likely to need food stamps than the rest of the U.S. workforce and three times as likely to live in poverty. But despite the urgency in the most recent stimulus plan signed by President Biden, Congress failed to raise the federal minimum wage. This of course has not stopped organizations like One Fair Wage from continuing a long fight to end sub-minimum wages, a practice that dates back to slavery. For more on this, we're joined by Saru Jayaraman. She's the president of One Fair Wage and the director of the Food Labor Research Center at UC Berkeley. Saru, welcome to Radical Imagination.

Saru Jayaraman: (01:36)
Thank you so much for having me.

Angela Glover Blackwell: (01:38)
Could you give us a snapshot of the U.S. restaurant industry and how it works today?

Saru Jayaraman: (01:43)
Prior to the pandemic, the restaurant industry almost hit 14 million workers, so very close to one in 10 American workers, but always was the absolute lowest-paying employer in the United States, which is honestly not good for the country to have the nation's largest and fastest-growing industry. Also the absolute bottom of the barrel lowest paying industry today, the wage is $2 and 13 cents an hour at the federal level 43 States persist with this some minimum wage for tipped workers, which is a legacy of slavery and four out of five States in the U.S have the sub minimum wage of $5 or less. 70% of these workers are women who work mostly in casual restaurants. Like I hops in, Denny's struggling with very high rates of poverty and economic instability and the highest rate of sexual harassment of any industry in the U S. And that was all prior to the pandemic. UCSFs just named the restaurant industry the most dangerous place to work, and it is a combination of exposure to COVID, but also these very low wages that subject people to the whims of tips.

Angela Glover Blackwell: (02:49)
So a very bad situation was made much worse by the pandemic. Um, I want to step back and talk about why the restaurant industry is so bad. You started to get into that, but before we go there, what are typical tips? You mentioned wages, but what are typical tips, if there's such a thing?

Saru Jayaraman: (03:08)
Yeah, I mean, the median wage for tipped workers in the U.S is still just under $10 an hour. So if you know that the minimum wage for tipped workers ranges between two and $5 an hour, depending on the state, let's take the median of that. Let's say it's, you know, three, $4 an hour. That means you're looking at something like $5 or $6 an hour in tips for most workers, you know, across the country. These are not guys working in fancy fine dining restaurants. I mean, that is such a sliver of the industry. The vast majority of workers are working in very casual restaurants, mom and pop diners, and dive bars, and really struggling to make ends meet.

Angela Glover Blackwell: (03:59)
You went back to slavery, as you were talking about the restaurant industry. We'll talk about this. How does our restaurant industry in this country different from those in other industrialized countries?

Saru Jayaraman: (04:11)
Well, it's so funny cause tipping actually didn't originate in the United States; it originated in feudal Europe. It was always an extra or bonus given to serfs and vassals on top of a wage. It was like, uh, you know, a gift for, noblesse oblige, a job well done. When it came to the States, it was rich Americans traveling to Europe and coming back and trying to show off that they knew the rules of Europe. When it was brought to the States, there was a massive populous movement rejecting the notion of tipping as being anti-democratic and a vestige of feudalism, and that populous movement spread to Europe and the labor movement picked it up in Europe and got rid of tipping in much of Europe saying, you know, we are professionals, we don't live off your largesse. We expect to be paid like professionals by our employers. Unfortunately in the US, two things happened that resulted in us going in the exact opposite direction.

Saru Jayaraman: (05:12)
First around 1850, just before emancipation, a mix of Black and White waiters went on strike. They had a wage and they were demanding higher wages and restaurant owners all over the North, replaced them with women to replace striking male waiters. And then emancipation happened. And all of these Black workers entered the labor force. The restaurant industry wanted to hire them for nothing. And so the combination of the feminization of the industry and Black workers entering the industry, zeroed out the wage, which to me says, you cannot understand this $2 wage in America or sub-minimum wage for tipped workers, except as a direct reflection of the worth of women and people of color in the US.

Angela Glover Blackwell: (06:01)
And so you talked about women and Black people, and then this all kind of got further embedded in 1938.

Media Clip: (06:09)
A more fair wage returns, to prevent cut-throat competition, to prevent unduly long hours for labor.

Saru Jayaraman: (06:18)
That's right. So in 1938, you know, similar to this moment, I think FDR in Congress realized that you can't come out of the great depression without raising people's wages so that they consume, but it left out millions of Black workers.

Angela Glover Blackwell: (06:34)
One fair wage recently released a report titled, "Ending a Legacy of Slavery: How Biden's COVID Relief Plan Cures the Racist Sub-Minimum Wage". What are some of the key findings and solutions brought up in this report?

Saru Jayaraman: (06:48)
Workers were essentially being asked to do so much more for so much less, you know, so much more responsibility, and enforcing these masks and social distancing rules, workers are reporting that tips have gone down 50% minimum, and that they get tipped less if they try to enforce these rules -- which is a public health disaster, both for them, they can't enforce the rules. And for us, they're not going to do it if they're getting very meager tips and they rely on those same consumers to get tips on who we want them to enforce the rules. Well, that was already bad enough. But in February we analyzed the data by race and found that black workers fared worse on all of those issues that I just named. 80% of workers said their tips were down 50%, 90% of black workers said their tips are down 50 to 75%.

Angela Glover Blackwell: (07:37)
And what about wage theft, Saru?

Saru Jayaraman: (07:40)
It is so high. The US Department of Labor under Obama did a study of restaurants, especially on this issue of a sub minimum wage, because the law says that tips are supposed to bring you to the full minimum wage. And if they don't, the employer is supposed to make up the difference. Well, the US Department of Labor under Obama had the highest rates of enforcement of any previous administration. They found an 84% violation rate with regard to these restaurants actually enforcing these rules. And then the Solicitor General of the US Department of Labor under Obama, just basically declared that this issue in this industry is unenforceable -- her words, unenforceable. You're not going to be able to enforce these rules. There's just so much flagrant violation. It's so overwhelming. You need to actually just change the law and require everybody to be paid a full minimum wage. So tip theft is just extraordinarily rampant. Wage theft is rampant, and it comes back to the power dynamic between employers and customers and workers that we have seen can really be severely reduced by paying people a livable wage with tips on top, rather than having tips be a portion of the wage.

Angela Glover Blackwell: (08:54)
In 2013, you helped start One Fair Wage to end all sub minimum wages in the US. Tell us the story of how One Fair Wage came to be and what have been some of the accomplishments you've made since you started.

Saru Jayaraman: (09:06)
We started kind of organizing restaurant workers after 9/11 together with workers from Windows on the World, the restaurant at the top of the World Trade Center. And in the first 10 or 12 years of our existence of our work, we train workers to conduct surveys of their peers, we did at least 10,000 across the country. And in every region we surveyed workers, their wages would always come up as their number one concern. So in 2013, we look more deeply into it, 'Why does this keep coming up?" And really discovered that the epitome of the power that the restaurant association has - employers have over workers - frankly, as their power, just not to pay them at all. We, at One Fair Wage are fighting to end all subminimum wages in the US, not just for restaurant workers, but for all tipped workers for incarcerated workers who get a subminimum wage, for workers with disabilities, who get a subminimum wage.

Saru Jayaraman: (09:58)
It's time to end all subminimum wages along the way. We didn't just organize workers. We didn't just win champions and legislators. We actually were able to move, engage and organize hundreds and hundreds of small business and even higher profile independent restaurant owners. We brought them together to form an association called Raise - restaurants advancing industry standards and employment. And that association has grown to more than 800 restaurants around the country that are committed to livable wages, increased race and gender equity. We just released a letter from 200 small business restaurants calling on Congress to pass the Raise the Way Act. Now, as part of the COVID relief package, you know, we needed to organize workers, obviously their most important, but we had to organize employers alongside the workers and consumers, ultimately to win against such a powerful enemy.

Media Clip: (10:56)
Fast food workers are skipping work Friday in 15 cities to demand higher pay. Protesters want the federal minimum wage to be more than doubled to $15 an hour. Something Biden has endorsed and even included in his COVID relief proposal. Those States have...

Angela Glover Blackwell: (11:13)
Would you say more about the Raise the Wage Act so that we get the full picture of it? How many people would benefit? What exactly does it require?

Saru Jayaraman: (11:21)
The Raise the Wage Act would raise the minimum wage for all workers, which is currently $7.25 to $15 an hour by 2025. So it passed this year, that means over four years, workers would go from $7.25 to $15 an hour. And then it would also eliminate or phase out the subminimum wage for tipped workers, the subminimum wage for workers with disabilities, and any subminimum wages for youth. And our estimate is between 60 and 70 million workers would get a raise through this bill. And certainly in the service sector, almost all of the 14 million workers would get a raise. Also, by the way, is historic because while we've raised the minimum wage before, this would represent the first time since emancipation, that Congress would eliminate the subminimum wage for tipped workers.

Media Clip: (12:17)
Since the first minimum wage was put in place in the 1890s in the US, the issue has been litigated as far as Supreme Court studied by academics from restaurants, counties to hold nations and states and now, debated fiercely by politicians. Many of them.

Angela Glover Blackwell: (12:31)
I know there's pushback too. Some of the pushback against the Raise the Wage Act claims that it would increase the budget deficit and reduce employment nationally in the middle of a recession. What's your response to that?

Saru Jayaraman: (12:43)
Yeah. This is the interesting kind of boogeyman arguments that the Restaurant Association has used for decades and decades and decades. People have to look with their own eyes at the states that have raised wages. And if it were true, what the Restaurant Association is saying in California, which is $15 and has fully eliminated the subminimum wage for tipped workers would not have a restaurant industry or the restaurant industry to be decimated. And on the contrary, we have the largest and fastest growing restaurant industry of any state in the United States of America. Even the chains that are fighting the hardest against these wage increases. IHOP, Denny's, Applebee's are growing faster in California than any other state in the US. But the truth is when you've looked at the States that have raised wages, we just have not seen decline. On the contrary, you've seen growth because low-income people spend more out of their income than the higher wealth people who tend to save. So if lower income people are spending, most of their wage increases, that is going straight back into the economy. It's supporting restaurants, it's supporting small businesses who desperately need mainstream to be able to consume to survive during these next several years of ongoing depression or recession.

Angela Glover Blackwell: (13:58)
Well, let's stay on that point for a minute more. You know that if we get the equity agenda, right, we get so much else, right. Talk more about what the benefits will be to the industry, to society, if we finally get rid of sub-minimum wages and pay people, decent salaries.

Saru Jayaraman: (14:15)
I mean, look, we've done so much research that shows when you pay people a living wage. And when you provide mobility, particularly for workers of color and women, you see longevity. You can cut your turnover, employee turnover in half by treating people well, paying them well. And we actually did this study together with Cornell University. We surveyed 1100 restaurant owners and managers across the country, quantified how much employee turnover costs them. And it's in the millions for the chains, training, rehiring, uh, you know, just morale. We have the highest turnover rates of any industry; and you can cut that in half by paying people well and increasing mobility for workers of color and women.

Saru Jayaraman: (15:06)
So it's revenue, it's reduced cost. And then we're in a depression. You know, the largest workforces in America are decimated. They are, they're going to food banks. They're probably going to be evicted in the millions. And so who is going to eat out in small business America? Who is going to support these small businesses? One time cash grants from a COVID relief package will only get us so far. What's going to sustain us, is our neighborhoods being able to eat in our restaurants. And then of course, for the workers, I mean, reduce poverty, reduce sexual harassment, better ability to take care of your children, your mental health improves. I mean, it's endless.

Angela Glover Blackwell: (15:53)
Saru, thank you for speaking with us.

Saru Jayaraman: (15:55)
Thank you, Angela. Always great to talk to you.

Angela Glover Blackwell: (16:00)
Saru Jayaraman is the president of One Fair Wage and the Director of the Food Labor Research Center at UC Berkeley. Coming up on Radical Imagination. We learn about solidarity economics, an unconventional concept that defies the established financial norms simply by putting people first, stay with us. More when we come back

Promo, National Equity Atlas Speaker: (16:35)
Equity is the key to America's economic prosperity. The National Equity Atlas, America's most detailed report card on racial and economic equity, paves the way by equipping advocates with data driven tools,to craft campaigns and advance policy. A partnership between PolicyLink and USC's Equity Research Institute, the Atlas is a game-changing platform that undergirds the most radical efforts to redesign our nation. Whether you're a community organizer making the case for justice and fairness, a government leader working to make things better, or a leader that informs corporate and philanthropic investments, the National Equity Atlas is an invaluable resource for you. Visit NationalEquityAtlas.org, and help build an inclusive economy for all.

Angela Glover Blackwell: (17:25)
And we're back. In the past year, the pandemic has led us to question the political and economic models we've been living under. And it has reminded us that when some people are left out, it affects everyone. That if a sector of the population becomes vulnerable, so does the economy. We're now joined by Manuel Pastor. He's a professor of sociology at the University of Southern California. He's a co-creator of solidarity economics, a concept rooted in putting people first, which argues that solidarity will not just help us come out of this pandemic, but will also be good for our economy. Manuel, welcome to Radical Imagination.

Manuel Pastor: (18:04)
I'm glad to radically imagine with you.

Angela Glover Blackwell: (18:07)
In your research, you talk about solidarity, economics and mutuality. Could you explain these concepts for us and why they're so important in today's context?

Manuel Pastor: (18:18)
The basic principles of solidarity economics are simple. First, we need to stop talking about the economy and start talking about OUR economy. When we talk about the economy, it makes it sound like it's a set of rules out there that were delivered to us by God or by nature. These are rules we've made ourselves in terms of tolerating, unemployment, tolerating discrimination, tolerating poverty. Second, as much as people act out of their individual self-interest, they also act out of mutuality. They act out of concern for each other. When people work together and leads to healthier regions or prosperous regions and even better businesses. And then the third big principle of solidarity economics says that none of this will change unless we consider the equation of power and what it means to have social movements that can imagine a different economy and then act on solidarity and mutuality and make that our economy in the future.

Angela Glover Blackwell: (19:30)
What does an economic model that puts people first actually look like?

Manuel Pastor: (19:35)
Well, when we think, for example about innovation, the sort of traditional economic model is of a Steve Jobs who is brilliant on his own and invents a bunch of stuff. And in the wild West of the marketplace, innovations take place. But in fact, if you look at the iPhone, half of the patents within the iPhone are from things that are generated from basically, publicly funded research in basic science. And when we begin to realize that also Steve Jobs' iPhone, aside from being based on publicly funded research, could only take place in the big ecosystem of the Silicon Valley with people cooperating. We began to realize that even innovation and change is something that is really done in the commons. And as a result, we ought to be talking a lot about a technology dividend, about understanding that the technical and innovation progress in our society comes from a collective investment. And therefore we should collectively benefit in the same way that Alaska thinks about its oil, to the permanent oil fund and gives dividends to the people who reside in Alaska. We could use that to fund a universal basic income that we might call a technology or solidarity dividend. And that would be something that would allow people to stop worrying about survival and to begin considering how to thrive. That's putting people first.

Angela Glover Blackwell: (21:19)
It seems that through solidarity economics, we could start to address many other issues.

Manuel Pastor: (21:25)
I think once we root ourselves in solidarity, we began to see that we must raise the minimum wage, that we must have an anti-racist perspective in our policy, because as I mentioned before, it's the right thing to do, but also it's the economically efficient thing to do. You don't want to have over-incarceration which throws away so much talent and prevents you from growing our economy. You don't want to leave people in the shadows without legal status because those undocumented Americans can contribute. So the spillover into almost every economic issue area is I think the right thing,

Angela Glover Blackwell: (22:08)
The solidarity economy movement has been around since the thirties, showing the world that there can be alternatives to traditional capitalist models. What role do efforts like community ownership, restaurant co-ops, land trust, and others play in building a solidarity economy?

Manuel Pastor: (22:25)
That is a movement that is really focused on the idea of community ownerships of, cooperatives of, you know, the kinds of things that you were talking about and how they might help us build our way to a post-capitalist kind of economy, in which basically, cooperative forms would be the dominant thing. And as you can see, that's a very different vision than traditional socialist vision of state ownership. It's a definitely a vision of sort of community ownership, cooperatives, and that whole body of work that we deeply honor and respect is called the solidarity economy. When we think about solidarity economics, we think about it as sort of transitional perspective to maybe get to the solidarity economy.

Manuel Pastor: (23:17)
You know, in the next 20 or 30 years, I don't really see a big business being replaced by the bubbling up of community ownership. So I think that we need to have something in the meanwhile like solidarity economics that talks about how do you create a role for businesses that are willing to abide by certain kinds of social norms and are willing to have consumers who also reward and punish businesses based on whether they're meeting to those social norms. And that of course has a government involved. So this is the way in which I think these two kinds of vision of solidarity economics and the solidarity economy are tied together.

Angela Glover Blackwell: (24:08)
I've never seen a moment as ripe for change as the one we're in. Many things are coming to the fore that just have been hidden and fringed, and they're moving right to the center. How do you envision the future 10 years from now?

Manuel Pastor: (24:24)
I feel like we are about to turn the page. That there are more organizers fighting for justice in Georgia than there are arsonists wanting to burn democracy down to the ground.

Manuel Pastor: (24:41)
10 years from now, I hope that will have a solidarity economy. I hope that we will have cooperative enterprises. I hope that we will have dramatically shrunk our incarceration system. I hope that we will live in a world without borders, in which there's no such thing as undocumented brothers and sisters. I hope we will live in a world in which everyone's abilities are valued and supported, but I bet you would be a whole new thing to protest that, that as we move up to a higher level of justice, we'll be able to get a glimpse in that beloved community of what additional steps we need to take to more fully include people, and to help our movements go to the next and higher level of radical imagination.

Angela Glover Blackwell: (25:36)
Oh, Manuel, thank you for speaking with us.

Manuel Pastor: (25:38)
It's always a pleasure to speak with you.

Angela Glover Blackwell: (25:40)
Manuel Pastor is a professor of sociology at the University of Southern California and Director of the Equity Research Institute.

Angela Glover Blackwell: (25:59)
Manuel Pastor reminds us that this is OUR economy. It does not have a life of its own. It has rules. It servers someone's interests. It should serve our interest and needs. The economy has not worked for us for a long time, but my guests today are brilliantly showing us the way forward. An economy that puts people first is grounded in mutuality and solidarity. And as the heroic organizing by restaurant workers makes clear, low wages, vast inequality and exploitation on the job or rooted in the ugliest chapters of American history. The nation must reckon with slavery and its enduring legacy as we reimagine a future in which everyone has access to jobs that offer living wages, life-sustaining benefits and dignity.

Angela Glover Blackwell: (26:52)
We and our partners that Unfinished invite you to Reflect and Respond to this question, "What does an economy that puts people first look like?" Submit your ideas@radicalimagination.us or on social media using #RadicalImagination and #ThisIsUnfinished.

Angela Glover Blackwell: (27:20)
Radical Imagination was produced by Futuro Studios for PolicyLink. The Futuro Studios team includes Marlon Bishop, Andres Caballero, Antonio Cereijido, Ruxandra Guidi, Stephanie Lebow, and Jess Alvarenga. The PolicyLink team includes Glenda Johnson, Rachel Gichinga, Ferchil Ramos, Eugene Chan, Fran Smith, Jacob Goolkasian and Vanice Dunn. Radical Imagination is supported by Omidyar Network, the David and Lucile Packard Foundation, Pivotal Ventures: a Melinda Gates company, and Unfinished. Our theme music is composed by Taka Yusuzawa and Alex Segiura. And I'm your host, Angela Glover Blackwell. Join us again next time. And in the meantime, you can find us online@radicalimagination.us. Remember to subscribe and share.

Clip from Epi. 3: (28:22)
Racism and the legacy of slavery in this country has deeply shaped how we've treated this workforce in law and policy.

Angela Glover Blackwell: (28:31)
That's next time on Radical Imagination.