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Interview With Saru Jayaraman: Masters in Business (Audio) · Masters in Business

0:03
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
0:08
Speaker 1: This week on the podcast, we have a special guest,
0:11
Speaker 1: and actually an unusual and interesting guest. Her name is
0:15
Speaker 1: Saru Jairamin. She's got a fascinating background both as an
0:21
Speaker 1: educator and an attorney. She's been really focusing on restaurant
0:27
Speaker 1: labor relations and the way we treat UH employees who
0:33
Speaker 1: basically prepare and service food when we go out to eat.
0:37
Speaker 1: And this began after nine eleven when a number of
0:41
Speaker 1: family members of workers who were at Windows in the
0:44
Speaker 1: world UH perished in the terrorist attack, and that led
0:48
Speaker 1: her down a path of exploring all sorts of things
0:53
Speaker 1: related to the restaurant industry. She has been working with
0:57
Speaker 1: restaurateurs such as Danny Meyer, helping to create a fairer
1:04
Speaker 1: workplace for employees UH. And she's really very much influenced
1:09
Speaker 1: the latest movement in dining out, which is the end
1:13
Speaker 1: of tipping, replacing tipping with a flat salary and building
1:18
Speaker 1: UH the cost of service into the meal as opposed
1:23
Speaker 1: to leaving it an option for for diners. And some
1:27
Speaker 1: people say they really like this. There are a lot
1:30
Speaker 1: of folks who don't like the pressure of tipping. Don't
1:32
Speaker 1: like feeling like they're obligated to overtip or to what
1:36
Speaker 1: have you. They want to pay for a service and
1:38
Speaker 1: and know exactly what it's gonna cost beforehand. She has
1:43
Speaker 1: been one of the thinkers at the forefront of this movement,
1:46
Speaker 1: and a number of restaurants have adopted this idea as
1:51
Speaker 1: a way to just let people know exactly what their
1:54
Speaker 1: meal is going to cost. UH. The conversation range far
1:56
Speaker 1: and wide. I think it's really a fascinating subject, and
2:00
Speaker 1: I think you'll enjoy hearing more so. Without any further ado,
2:04
Speaker 1: my conversation with saru Jaya Raman. This is Master's in
2:11
Speaker 1: Business with Barry Ridholts on Bloomberg Radio. My special guest
2:16
Speaker 1: today is saru Ja Rahman. She is the co director
2:21
Speaker 1: of the Restaurant Opportunity Center and the director of the
2:25
Speaker 1: Food Labor Research Center at u C. Berkeley. She's also
2:29
Speaker 1: the creator of a delightful app, The Diner's Guide to
2:32
Speaker 1: Ethical Eating. A little background on Saru. She went to
2:36
Speaker 1: undergraduate u C. L A, where she studied policy and
2:40
Speaker 1: international development. Studies that took her to Harvard and the
2:45
Speaker 1: John F. Kennedy School of Government, where She graduated with
2:48
Speaker 1: a master's in public policy before going to Yale Law School.
2:53
Speaker 1: Her specialty these days is restaurant labor employment. SARU, Welcome
3:00
Speaker 1: to Bloomberg. Great, great to be here. So let's talk
3:03
Speaker 1: a little bit about your backgrounds. Following nine eleven, the
3:07
Speaker 1: World Trade Center is destroyed. Most of the employees at
3:12
Speaker 1: Windows on the World, which were on the top floor,
3:15
Speaker 1: essentially everybody who made it to work that morning perished
3:18
Speaker 1: in the uh in the terrorist attack. How did that
3:23
Speaker 1: evolve into advocacy for restaurant workers. Yeah, so on that morning,
3:29
Speaker 1: seventy three workers actually died at Windows on the World,
3:31
Speaker 1: and about workers lost their jobs, and about thirteen thousand
3:35
Speaker 1: restaurant workers lost their jobs in the months and weeks
3:38
Speaker 1: that followed the tragedy. And so I worked with one
3:41
Speaker 1: of the former waiters that Windows on the World, a
3:43
Speaker 1: guy named Fak mom Do, and we started the organization
3:46
Speaker 1: initially as a relief center to help all of these
3:49
Speaker 1: thousands of restaurant workers in New York get back on
3:51
Speaker 1: their feet, especially the Windows workers. But um, because this
3:55
Speaker 1: isn't one of the largest and fastest growing industries, and
3:58
Speaker 1: because actually there is no union in this industry, there's
4:01
Speaker 1: very little support for these workers. The minute we opened
4:03
Speaker 1: our doors, we started getting cries for help from workers
4:06
Speaker 1: all over the city and then all over the country,
4:08
Speaker 1: and then employers and consumers, and it just kept growing.
4:12
Speaker 1: So I waited my way through college and grad school.
4:14
Speaker 1: I attended barn did shore chefs, and and knowing that
4:18
Speaker 1: that wasn't my career, I kind of shrugged and said
4:22
Speaker 1: laughed at what a horrific industry it is. But really
4:26
Speaker 1: there are some horror stories in the restaurant industry. Did
4:29
Speaker 1: you you worked as a as a waitress in school?
4:31
Speaker 1: I actually didn't. You know, that's kind of one of
4:34
Speaker 1: the incredible discoveries. Actually doing research for the book, you know,
4:39
Speaker 1: I went back and traced my family's origins in the
4:42
Speaker 1: restaurant industry, and you know, my family actually were owners
4:45
Speaker 1: of a restaurant, worked in restaurant. Grandfather great grandfather in
4:48
Speaker 1: South India owned a restaurant for decades and decades and
4:52
Speaker 1: decades and employed lots and lots of people. Um, but
4:56
Speaker 1: I never worked in a restaurant until we actually opened
4:58
Speaker 1: our own restaurants through Rock, so learned a lot from
5:01
Speaker 1: the workers. The minute after nine eleven was thrown together
5:04
Speaker 1: with these workers and really tried to do something to
5:06
Speaker 1: change this, and it's a really tough business. The status
5:11
Speaker 1: of all new restaurants closed within two years. So the
5:15
Speaker 1: question is, what can you do to make restaurants given
5:20
Speaker 1: how terrible a tract record, they tend to have a
5:25
Speaker 1: better place to to work. Well. The truth is that, yes,
5:29
Speaker 1: it is true that lots of new restaurants failed, but
5:32
Speaker 1: the numbers show that actually the number of new restaurants
5:35
Speaker 1: that succeed and stay open um far exceeds that. Because
5:40
Speaker 1: it is still the second largest and absolute fastest growing
5:44
Speaker 1: sector of the U. S economy, in the largest sector
5:47
Speaker 1: of the US economy. That's amazing. It's amazing. It's eleven
5:49
Speaker 1: million workers. One in twelve Americans works in this industry.
5:52
Speaker 1: One and two of us have worked in this industry
5:54
Speaker 1: in our lifetime. So it's not like it's an industry
5:56
Speaker 1: that's going anywhere or is tiny or small. And there
6:00
Speaker 1: are plenty of restaurants, many of whom I profile in
6:02
Speaker 1: the book, that have shown that you actually can treat
6:04
Speaker 1: your workers well, pay them well, and stay in business
6:07
Speaker 1: for a really long time. Let's talk a little bit
6:09
Speaker 1: though about the app you created the Diners Guide to
6:13
Speaker 1: Ethical Eating tell us about that. So for years people
6:16
Speaker 1: would say, well, we know that things are so bad,
6:18
Speaker 1: where can we eat? What can we do? How can
6:20
Speaker 1: we support? And so we started actually doing research and
6:24
Speaker 1: doing research on the hundred and fifty most popular chains
6:27
Speaker 1: in America and every year giving them ratings on issues
6:29
Speaker 1: of wages and benefits and promotions, and then also rating
6:33
Speaker 1: restaurants that we're trying to work with us to do better.
6:35
Speaker 1: And so now the app includes ratings of the hund
6:38
Speaker 1: fifty most popular restaurants in America, mostly chains, and also
6:42
Speaker 1: a hundred and fifty other restaurants that are doing it right,
6:45
Speaker 1: and we give awards to restaurants that provide good wages
6:48
Speaker 1: and good working conditions. So it uses a geolocator to
6:51
Speaker 1: see where you are and tells you how the restaurants
6:52
Speaker 1: around you are faring on these issues. Now, there aren't
6:55
Speaker 1: enough restaurants in America that are getting awards for you
6:58
Speaker 1: to only eat in those restaurants. So the app was
7:00
Speaker 1: never meant to tell you eat here, don't eat here. Rather,
7:02
Speaker 1: it's a tool for you to be able to communicate
7:04
Speaker 1: your values wherever you do end up eating out is
7:07
Speaker 1: this significantly downloaded or a lot of people using Yeah. Actually,
7:11
Speaker 1: when we first put it out, Mark Bittman wrote about
7:13
Speaker 1: it in the New York Times, you know, great food writer,
7:16
Speaker 1: and several hundred thousand people downloaded it in the first
7:18
Speaker 1: day when he wrote about it. And it's because people,
7:21
Speaker 1: i think, really want to know. How is this restaurant
7:23
Speaker 1: treating its workers? Do they offer paid sick days? Which,
7:26
Speaker 1: by the way, these workers don't have a single paid
7:29
Speaker 1: sick day. So most that was the most I'm sorry
7:31
Speaker 1: to interrupt, that was the most We're going to get
7:33
Speaker 1: to that. That was the most horrifying stat in the book.
7:37
Speaker 1: Most of us just close our eyes and don't want
7:39
Speaker 1: to know. But some of these stats, if you want
7:42
Speaker 1: to stay healthy, you have to know. And it's just
7:46
Speaker 1: it's just terrible. So in the last minute we have
7:49
Speaker 1: in the segment you talk about the other n r A,
7:53
Speaker 1: let's discuss that. So it's not the National Rifle. This
7:57
Speaker 1: is the National Restaurant Association. Yes, what's your relationship with them?
8:01
Speaker 1: And how helpful or how much of an impediment are
8:04
Speaker 1: they too improving labor conditions? Well, they really don't like us.
8:08
Speaker 1: They've been they represent the Fortune five hundred chains, the
8:13
Speaker 1: Olive gardens, and the Taco Bells and McDonald's, and they've
8:17
Speaker 1: been lobbying to keep wages as low as two dollars
8:20
Speaker 1: and thirteen cents an hour for decades and decades. In fact,
8:22
Speaker 1: that is the current federal minimum wage for tipped workers.
8:25
Speaker 1: And in doing research for this book, find come to
8:27
Speaker 1: find that their power doesn't make date back twenty or
8:30
Speaker 1: thirty years. It date back a hundred and fifty years
8:32
Speaker 1: to the emancipation of this is tipped at McDonald's or
8:36
Speaker 1: Taco Bell. Nobody's tipped at McDonald's or Taco Bell. But
8:38
Speaker 1: they've managed to keep the wage even for those workers
8:41
Speaker 1: as low as seven dollars and which is the national
8:44
Speaker 1: minimum wage, which is really way behind inflation. If it
8:48
Speaker 1: had gone up with in place, you would be at
8:49
Speaker 1: eighteen dollars. That's amazing. I'm Barry rid Halts. You're listening
8:53
Speaker 1: to Masters in Business on Bloomberg Radio. My special guests
8:56
Speaker 1: this week is sarru Ja Rahman, and we're talking about
8:59
Speaker 1: the strong industry. Uh And one of the subjects that
9:03
Speaker 1: came up was an op ed that you had written
9:06
Speaker 1: in The New York Times, sort of misleadingly headlined why
9:10
Speaker 1: tipping is wrong. So, so let's jump right into this,
9:14
Speaker 1: what's the problem with tipping. It's actually not the problem
9:17
Speaker 1: with tipping. It's the fact that this industry, the restaurant industry,
9:20
Speaker 1: has used tipping as a way to not pay their
9:23
Speaker 1: own workers. So turns out tipping didn't originate in the States.
9:26
Speaker 1: That originated in the feudal homes of Europe. And when
9:29
Speaker 1: it came to the States, there was actually a massive
9:31
Speaker 1: anti tipping movement, so strong that six states past bands
9:35
Speaker 1: on tipping. Really, that's fascinating. Now that's kind of changed
9:38
Speaker 1: in Europe seems to be going away. It was gone.
9:41
Speaker 1: I mean, that was the turn of the nineteenth century,
9:44
Speaker 1: and that movement that started in the States spread to
9:46
Speaker 1: Europe and succeeded in Europe, which is why there's no
9:49
Speaker 1: tipping in Europe or very little here in the States.
9:52
Speaker 1: The restaurant industry actually squashed that movement and demanded the
9:55
Speaker 1: right to hire newly freed slaves this is right around
9:57
Speaker 1: the time of emancipation and not pay the many thing
10:00
Speaker 1: and let them live on customer tips. And that's actually
10:03
Speaker 1: how the very first minimum wage law in the United States,
10:05
Speaker 1: which was part of the new deal in eight said
10:08
Speaker 1: you can get the minimum wage as a tipped worker
10:11
Speaker 1: either through your wages or through tips, which gave tipped
10:13
Speaker 1: workers the right to a zero dollar minimum wage. And
10:16
Speaker 1: we've gone from a zero dollar minimum wage in ninety
10:19
Speaker 1: eight to a whopping two dollars and thirteen cents an hour,
10:21
Speaker 1: which is the current federal minimum wage for workers who
10:23
Speaker 1: earned tips. And over that one hundred year period, the
10:27
Speaker 1: Restaurant Association has said, it's okay, we don't need to
10:29
Speaker 1: pay these workers and make a ton of money and tips.
10:32
Speaker 1: We don't have to actually give them a wage. They
10:34
Speaker 1: describe a white guy working at a fancy, fine dining stagehouse,
10:37
Speaker 1: when in fact, so many of these workers are women
10:40
Speaker 1: who work at Eyehop and Applebee's and suffer from three
10:42
Speaker 1: times the poverty rate of the rest of the U
10:44
Speaker 1: S workforce, make very little money and tips, and suffer
10:46
Speaker 1: from the worst sexual harassment of any industry. You can
10:50
Speaker 1: detail some in the book. So let me push back.
10:53
Speaker 1: Let me take the other side of the argument. Look,
10:56
Speaker 1: we open a restaurant, we don't know how well it's
10:58
Speaker 1: gonna do. We hire a bunch of people, hopefully they're
11:01
Speaker 1: pretty good. If the restaurant takes a while to be discovered, Well,
11:06
Speaker 1: we don't have a huge overhead in labor. We're all
11:09
Speaker 1: kind of suffering. We're running out of deficit. The first
11:11
Speaker 1: few months, the restaurant picks up an audience, it gets popular,
11:16
Speaker 1: and suddenly everybody's making money. What's wrong with that model? Well,
11:20
Speaker 1: the thing is that that's the traditional model, the old model,
11:24
Speaker 1: And that's why the book is called Forked, because there
11:26
Speaker 1: actually is another way of doing things. California and six
11:29
Speaker 1: other states actually require that this industry pay a full
11:32
Speaker 1: minimum wage to their workers and let tips be on
11:34
Speaker 1: top of that. And there's a full minimum wage. So
11:37
Speaker 1: you're a waitress at an eye hop in California and
11:39
Speaker 1: you're making seven, well, actually making nine, which is the
11:43
Speaker 1: California state minimum wage plus tips. And California actually has
11:47
Speaker 1: the largest and fastest scoring restaurant industry in the country.
11:50
Speaker 1: L A has a larger restaurant industry than New York City,
11:52
Speaker 1: Believe it or not. They have higher restaurant sales per capita,
11:55
Speaker 1: higher job growth in the restaurant industry, higher job growth
11:58
Speaker 1: among servers, even higher rates of tip ping. We tip
12:00
Speaker 1: better on the West Coast than in New York or
12:03
Speaker 1: the forty three states with lower wages for tipped workers.
12:05
Speaker 1: So the opposite can actually be said to be true
12:08
Speaker 1: that if you have a standard that's set for a
12:11
Speaker 1: whole state or hopefully the whole country, that requires every restaurant,
12:14
Speaker 1: like every other industry, to pay the full minimum wage,
12:17
Speaker 1: you will follow that business model and make it work.
12:20
Speaker 1: So we've been watching forecasts of Seattle restaurant industry imploading
12:25
Speaker 1: and actually what's happened when Seattle raised their minimum wage,
12:29
Speaker 1: which I think is on the way to fifteen, it's
12:32
Speaker 1: now about eleven um. Their restaurant industry is well, but
12:38
Speaker 1: you know, I think people get it backwards. The region
12:41
Speaker 1: is doing really well so they can support more restaurants.
12:44
Speaker 1: But there's no other way to describe it. The number
12:48
Speaker 1: of new openings and new priman application that's just trending
12:51
Speaker 1: straight upwards in Seattle. They don't care about eleven that's frankly,
12:55
Speaker 1: it's trending upwards everywhere. This is an industry that's growing
12:58
Speaker 1: astronomically everywhere. We just made world history last year, becoming
13:01
Speaker 1: the first nation on Earth in which we're now spending
13:04
Speaker 1: more money on eating out than we do in the home.
13:06
Speaker 1: Money on eating food in the home. That's the sign
13:08
Speaker 1: of a wealthy nation with a lot of disposable well,
13:11
Speaker 1: not just that, it's a sign of a nation that
13:13
Speaker 1: even when we're unemployed, we just keep eating out. That's
13:17
Speaker 1: that's amazing. So let's talk about what the system should
13:21
Speaker 1: look like. Ideally, what do you replace the two dollar
13:25
Speaker 1: minimum wage with? What does everybody in what should everybody
13:28
Speaker 1: in a restaurant make? And what should we do about tipping?
13:32
Speaker 1: So what we're looking at right now are policies that
13:34
Speaker 1: are moving in lots of states around the country and
13:37
Speaker 1: in Congress called one Fair wage, getting rid of this
13:40
Speaker 1: two tiered wage system, having everybody follow California and the
13:43
Speaker 1: seven states that have done this and just let this industry,
13:46
Speaker 1: like every other industry, pay the full minimum wage. Let
13:48
Speaker 1: tips be what they're meant to be, which is a
13:51
Speaker 1: bonus or a gratuity on top of a wage. It's
13:53
Speaker 1: not the way wage itself. Yeah, that makes a lot
13:56
Speaker 1: of sense. Um, So will this if we were to
13:59
Speaker 1: get rid of tipping or increase the minimum wage for
14:03
Speaker 1: for wait staff, that will that raise the cost of
14:07
Speaker 1: of going out to eat? No? I live in California,
14:09
Speaker 1: and I gotta say I spend way more on eating
14:11
Speaker 1: out here in New York City or in d C,
14:13
Speaker 1: where the wages two dollars and seventy seven cents an
14:15
Speaker 1: hour than when I eat at home in California. In
14:17
Speaker 1: a real estate though, isn't it? You're in a much
14:19
Speaker 1: higher real estate expense. And I think the cost of
14:24
Speaker 1: labor and restaurants is really a small and the cost
14:27
Speaker 1: of food. It's the real estate and then well the
14:31
Speaker 1: equipment that everything else. Food prices have risen astronomically over
14:35
Speaker 1: the last many years, much faster than wages, way faster
14:38
Speaker 1: than wages. Last decade, milk over six, meat quadruple exactly,
14:44
Speaker 1: and find meat just keeps going up exactly. It's funny
14:46
Speaker 1: people always ask about cost of food going up with labor,
14:49
Speaker 1: but you don't ask does cost of food go up
14:52
Speaker 1: with food price increases or rental price increases, which, as
14:55
Speaker 1: you're right, are much bigger part of a business than labor.
14:58
Speaker 1: And the labor that that's really interesting. And what about
15:00
Speaker 1: the smaller mom and pop stores, can they support a
15:04
Speaker 1: higher minimum wave? They are actually the ones that are
15:06
Speaker 1: thriving in California they're thriving. Yeah, and I and even
15:10
Speaker 1: the chains, I mean, across the board, everybody's doing better
15:13
Speaker 1: if you look at job growth in these seven states,
15:14
Speaker 1: in the forty three states. But maybe the best evidence
15:17
Speaker 1: of this is the hundred and seventy five restaurants that
15:20
Speaker 1: have worked with US to form an alternative national restaurant
15:22
Speaker 1: association called Raise. And they range from chains all the
15:27
Speaker 1: way down to small mom and pop restaurants around the
15:29
Speaker 1: country that actually provide livable, even what they call thrivable wages, benefits,
15:34
Speaker 1: advancement opportunities. And they're doing well, not in spite of
15:37
Speaker 1: treating their workers will and paying them well, but actually
15:40
Speaker 1: because they're treating their workers well. They find less turnover,
15:42
Speaker 1: higher profitability, higher profit productivity. The workers are happy, the
15:46
Speaker 1: customers are happy, and they've they're thriving as businesses. We
15:50
Speaker 1: watched Walmart fight an increase in minimum wage for many
15:54
Speaker 1: years and then ran into a problem of being unable
15:57
Speaker 1: to find workers, and then read pining them. They did.
16:01
Speaker 1: They did two minimum wage raises a dollar last year,
16:05
Speaker 1: and they're up to ten dollars now, and they're already
16:07
Speaker 1: showing stigns of a reduced turnover and when you employ
16:11
Speaker 1: two million people, turnover is a big deal. It's a
16:14
Speaker 1: big deal in our industry. To our industry has the
16:16
Speaker 1: highest rates of turnover of any industry the United States,
16:19
Speaker 1: and our research shows you can cut your turnover almost
16:21
Speaker 1: in half by treating your workers well and paying paying
16:24
Speaker 1: them well. I'm Barry rid Helts. You're listening to Masters
16:28
Speaker 1: in Business on Bloomberg Radio. My special guest this week
16:31
Speaker 1: is Saru J. Rahman. She is the co director of
16:35
Speaker 1: the Restaurant Opportunity Center and director of the Food Labor
16:39
Speaker 1: Research Center at You See Berkeley. She's also the author
16:42
Speaker 1: of Forked, a New Standard for American Dining. And we've
16:46
Speaker 1: been discussing the minimum wage and the impact of that
16:51
Speaker 1: on the restaurant industry. So let's go back to the
16:54
Speaker 1: history of this which you referenced earlier. Why is it
16:58
Speaker 1: that restaurants can get away with pay so little because
17:01
Speaker 1: they originally the original tipped workers in this country were
17:05
Speaker 1: actually former slaves, both restaurant workers and pullman train car borders.
17:10
Speaker 1: They were. I actually didn't either until we did research
17:14
Speaker 1: for the book, and um, this industry, the restaurant industry
17:17
Speaker 1: made the argument that they wouldn't be able to survive
17:20
Speaker 1: if they actually had to pay these workers a wage,
17:22
Speaker 1: so they basically hired newly freed slaves demanded the right
17:25
Speaker 1: to pay them nothing. That idea was codified into the
17:28
Speaker 1: very first minium wage lat Past in nineteen thirty eight,
17:30
Speaker 1: which gave tipped workers the right to a zero dollar
17:33
Speaker 1: minum wage. These were mostly black workers, former slaves, and
17:36
Speaker 1: we've gone from that zero dollar wage to a two
17:38
Speaker 1: dollar and thirteen cents wage today. Let's for a century, right,
17:42
Speaker 1: But stop and think about if you're arguing as a
17:45
Speaker 1: free market person who doesn't want government regulation, how can
17:49
Speaker 1: you say our business model depends on free labor? Exactly,
17:53
Speaker 1: very very little. I mean honestly, that was the argument
17:56
Speaker 1: of the cotton industry, right, that they their whole business
17:59
Speaker 1: model and the economy dependent on free labor, and form
18:01
Speaker 1: still making the same argument today. It really brings, you know,
18:04
Speaker 1: bears question of is this sustainable business model? So so
18:08
Speaker 1: I mentioned some of the stats were really horrifying in
18:11
Speaker 1: the book. Seven of the ten lowest paying jobs and
18:15
Speaker 1: the two absolute lowest paying jobs in America are in restaurants.
18:20
Speaker 1: That's right, And when you combine that with knowing this
18:22
Speaker 1: is the largest and fastest growing industry in America. What
18:25
Speaker 1: you end up with is essentially this industry proliferating the
18:29
Speaker 1: lowage economy, the low age floor of the entire economy,
18:33
Speaker 1: and bringing down the floor for the entire nation. UM,
18:36
Speaker 1: and it's going to be these are the jobs that
18:38
Speaker 1: are going to be available for our children. I teach
18:40
Speaker 1: at UC Berkeley, I would say a good third to
18:42
Speaker 1: a half of my students work in the industry, and
18:44
Speaker 1: many stay in the industry after college now with a
18:47
Speaker 1: UC Berkeley degree, because these are the jobs that are available.
18:51
Speaker 1: That UM is not encouraging if how are you going
18:54
Speaker 1: to pay student loans on It's hard to pay student
18:57
Speaker 1: loans on these wages. But I will say the way
18:59
Speaker 1: we look at these jobs also is not right. You know,
19:02
Speaker 1: it should be okay for UC Berkeley graduate to go
19:05
Speaker 1: into this industry because these are skilled professions. These are
19:08
Speaker 1: very skilled professions, and in other countries like Europe. In Europe,
19:12
Speaker 1: these are scene Hospitality is a profession. You go to
19:15
Speaker 1: school to be a hospitality professional. It's something seen as
19:18
Speaker 1: very uh you know, skilled. The issue here is not
19:22
Speaker 1: that these aren't good professions. The issues that they're not
19:25
Speaker 1: valued as professions, both in terms of pay and benefits.
19:28
Speaker 1: In terms of even this whole idea that these workers
19:31
Speaker 1: should rely on the largesse of customers, it detracts from
19:34
Speaker 1: the professionalism of this industry. So on my most recent vacation,
19:38
Speaker 1: I read the non academic version of your book, which
19:41
Speaker 1: is Kitchen Confidential by Anthony Bourdain's and it's hilarious and
19:47
Speaker 1: ribald and just you know, also rather are rated. But
19:53
Speaker 1: it tells essentially the almost the same exact story you
19:57
Speaker 1: tell from an academic perspective, of how horrific a lot
20:02
Speaker 1: of the quality is of handling food, how high the
20:06
Speaker 1: turnover is in restaurants, how waitresses are constantly sexually harassed
20:12
Speaker 1: both by forget the employees, but by management, and so
20:16
Speaker 1: the question is what makes this industry such a frat house?
20:23
Speaker 1: That's why is this this? I mean, in our opinion,
20:26
Speaker 1: all of our research shows that the real root of
20:28
Speaker 1: the problem is this two tiered wage system. Because se
20:31
Speaker 1: of tipped workers who live on that lower wage of
20:34
Speaker 1: two dollars and thirteen cents, or here in New York
20:36
Speaker 1: State it's seven dollars, whatever it is in the state,
20:39
Speaker 1: they rely completely on their tips. Those workers are women
20:42
Speaker 1: and their women who work at ihop and Applebee's and
20:45
Speaker 1: basically pay their families on customer tips. And our research
20:48
Speaker 1: shows that having to rely on tips for your income
20:51
Speaker 1: not only makes you vulnerable to all kinds of gross
20:54
Speaker 1: and appropriate behavior from customers, but we also find that
20:57
Speaker 1: management actually encourages these workers to dress sexy where tighter clothes,
21:01
Speaker 1: which show more cleavage, so that they can make more
21:04
Speaker 1: money and tips. And when you're forced to subject yourself
21:06
Speaker 1: to objectification, that makes you vulnerable to coworker and management.
21:10
Speaker 1: And we're not talking about restaurant chains like Hooters or
21:13
Speaker 1: restaurants people. We're talking about family restaurants like Denny's and
21:19
Speaker 1: eye hops and everything. I took my two little girls
21:21
Speaker 1: to the Chili's. They're three and five years old. It's
21:23
Speaker 1: a family restaurant, Chilis, And the uniform was all the
21:27
Speaker 1: servers are women, yes, And the uniform was a tight
21:30
Speaker 1: T shirt that said fresh across the breasts, a very
21:33
Speaker 1: tight T shirt. And you have to ask yourself, what
21:35
Speaker 1: are we selling, because you know it is the chilies
21:38
Speaker 1: on the olive gardens. But on the other hand, there's
21:41
Speaker 1: a whole new segment of this industry called the restaurant,
21:44
Speaker 1: and Hooters is not the only home that's a thing,
21:47
Speaker 1: that's a real segment. That Well, there's two other incredibly
21:50
Speaker 1: fast growing chains in the restaurant segment. It's Hooters, but
21:53
Speaker 1: it's also Tilted Kilt and Twin Peaks, one of the
21:57
Speaker 1: fastest growing chains in America. Yeah, I thought you were
22:00
Speaker 1: gonna say Wild Wings that does something very similar. So
22:03
Speaker 1: the other two restaurants are Tilted Kilt and Tilted Kilt. Okay,
22:07
Speaker 1: I can't say I heard of that, and Twin Peaks,
22:10
Speaker 1: which you know, you just what are we selling? They're
22:12
Speaker 1: not referring to the television, I got it. That's that's astonishing.
22:17
Speaker 1: My special guest today is Saru J. Rahman, and she
22:21
Speaker 1: is the director at you See Berkeley of the Food
22:26
Speaker 1: Food Labor Research Center and author of Fork to New
22:30
Speaker 1: Standard for American Dining. And let's jump right into the
22:33
Speaker 1: really disgusting, horrifying parts of your book. This quote just
22:39
Speaker 1: took me back on my heels. The CDC reports that
22:42
Speaker 1: as many as of all neuro virus and that's better
22:46
Speaker 1: known as the stomach flu trace back to sick restaurant workers. Now,
22:52
Speaker 1: that is both horrifying and it raises the obvious question.
22:56
Speaker 1: People are coming into work sick handling food. That's all. Well.
23:03
Speaker 1: Workers in this industry nationally do not have a single
23:06
Speaker 1: paid sick day, and two thirds report cooking, preparing and
23:10
Speaker 1: serving our food when they're ellen. We have heard so
23:12
Speaker 1: many stories over the years, workers working with typhoid fever,
23:15
Speaker 1: working workers working with hepatitis. I talk a lot about
23:18
Speaker 1: Olive Garden. You know, Olive Garden got an award from
23:21
Speaker 1: Michelle Obama for being you know, great for kids, healthy
23:24
Speaker 1: for kids because they had cares with the breadsticks. Uh,
23:28
Speaker 1: they serve salad. That's right. Because the same time they
23:34
Speaker 1: got the award from Michelle Obama, a worker in a Fayetteville,
23:37
Speaker 1: North Carolina restaurant was forced to work with hepatitis A.
23:41
Speaker 1: Three thousand people had to get tested by the county
23:43
Speaker 1: southed the restaurant, and one class action. That same year,
23:47
Speaker 1: there were two neurovirus outbreaks in alive gardens in Indiana
23:49
Speaker 1: and Illinois. I mean, it is, it's an epidemic. It is,
23:53
Speaker 1: it is a source of epidemics, and it's a public
23:56
Speaker 1: health disaster. Now, these restaurants really must not be happy
24:00
Speaker 1: with you when you publicize the stuff. But this is
24:04
Speaker 1: all This isn't stuff you're digging in the stacks that yeah,
24:07
Speaker 1: this is front page, Yeah, public information. CDC also reports
24:12
Speaker 1: a good one in ten workers are currently working with
24:15
Speaker 1: extreme diarrhea and vomiting, not as opposed to regulate exactly
24:19
Speaker 1: on the job jectile exactly healthy in a restaurant and
24:25
Speaker 1: so no paid. And if they're sick and they don't
24:29
Speaker 1: want to come in, they're told they're fired exactly, and
24:32
Speaker 1: even when the managers know they're ill, exactly. And again,
24:35
Speaker 1: this whole system of forcing these workers to live for
24:38
Speaker 1: the most part off their tips not paying them a
24:40
Speaker 1: wage means that the only way to actually get your
24:43
Speaker 1: wages is to go to work and work for tips,
24:46
Speaker 1: even when you've got hepatitis A. That's unbelievable. All right.
24:50
Speaker 1: So let's talk a bit about promotions, which is another
24:53
Speaker 1: way you measure different restaurants and how well they treat um,
24:57
Speaker 1: how well they treat their employees, what what typically is
25:02
Speaker 1: the standard practice and what do you think is the
25:05
Speaker 1: preferred or or or standard. There's a myth in this
25:09
Speaker 1: industry that you can start as a dishwasher and own
25:11
Speaker 1: your own restaurant. Will Sixty of the six or seven
25:15
Speaker 1: thousand workers we've surveyed nationally have said they've never received
25:18
Speaker 1: a raise or a promotion. And all the turnover in
25:21
Speaker 1: this industry isn't actually people going through this industry to
25:24
Speaker 1: something else. It's people moving from restaurant to restaurant to restaurant,
25:27
Speaker 1: just looking for better opportunities to feed their families. Because
25:30
Speaker 1: a lot of these eleven million workers actually take a
25:32
Speaker 1: lot of pride in their work. They really enjoy hospitality,
25:36
Speaker 1: but they want to move up, and they're generally no
25:37
Speaker 1: opportunities to move on. They don't get a promotion internally,
25:40
Speaker 1: So if you go to another restaurant acrost the stry,
25:42
Speaker 1: maybe you can have a shot at you're applying for
25:45
Speaker 1: essentially a better job than what you have exactly, and
25:48
Speaker 1: a lot of unfortunately, the lack of mobility is very
25:51
Speaker 1: very much due to race and gender. We find that
25:54
Speaker 1: people of color are not able to get into the
25:56
Speaker 1: very best jobs in the industry, which our server and
25:58
Speaker 1: bartending positions and very fine eye restaurants. Women are often
26:02
Speaker 1: blocked from those positions. We did what's called matchpair audit
26:04
Speaker 1: testing studies where we sent in hundreds of white people
26:07
Speaker 1: and people of color, women and men into very fine
26:09
Speaker 1: dining restaurants in four cities and found that people of
26:12
Speaker 1: color had or white people had twice the chance of
26:14
Speaker 1: a person of color, even when the person of colored
26:16
Speaker 1: a better resume at getting the best job, and that
26:19
Speaker 1: women were often blatantly told we don't hire women here
26:23
Speaker 1: if it's a very mind dining restaurant. Yes, even today,
26:25
Speaker 1: So I'm naive. And here in Manhattan, you go into
26:30
Speaker 1: a restaurant waiters, bartenders, servers, whatever, except for like the
26:35
Speaker 1: hundred year old steakhouses where the guys who have been
26:37
Speaker 1: working there for fifty years and no one serving food
26:40
Speaker 1: is under sixty. Um, it's pretty well integrated here in
26:45
Speaker 1: New York City, Or am I looking at things from
26:48
Speaker 1: a naive perspective. Unfortunately it's really segregated here in New
26:53
Speaker 1: York City, believe it or not. Maybe as the average customer,
26:56
Speaker 1: you don't know who's in what position, but most servers
26:59
Speaker 1: in very refine dining restaurants in New York City are
27:02
Speaker 1: white men. I mean just statistically, yeah. And the finest dining,
27:06
Speaker 1: the finer it is. The more you're talking about waiters
27:09
Speaker 1: and captains and bartenders and very fine dining. The more
27:11
Speaker 1: likely it's going to be white men. Women are not
27:13
Speaker 1: allowed to work the very best shifts in these fine
27:16
Speaker 1: dining restaurants. People of color have a very hard time
27:18
Speaker 1: getting into these jobs just statistically. In fact, there's a
27:22
Speaker 1: medium wage differential of four dollars an hour between white
27:25
Speaker 1: workers and workers of color. So you'll see people of
27:27
Speaker 1: colored on the dining floor, but they'll be bussers and runners.
27:30
Speaker 1: They won't be the server who interacts with you. Now
27:33
Speaker 1: that I think about it, Um, you're probably right, although
27:37
Speaker 1: I'll not mention that some of the funk of your
27:41
Speaker 1: bars and and pubs and stuff. It's pretty of yes,
27:47
Speaker 1: funk your bars, you tend to make less money and
27:49
Speaker 1: tips then you would at a really fine dining good steakhouses.
27:53
Speaker 1: The people pulling in five right, and those are largely
27:56
Speaker 1: white guys. Um, I will say, there are some who
27:59
Speaker 1: do it really well. So Tom Clickio here in New
28:02
Speaker 1: York what restaurants he owns all the craft the craft restaurants,
28:06
Speaker 1: so Craft Steak, you know, Witchcraft, all these different craft restaurants.
28:10
Speaker 1: As you might know, he's also the star of top
28:12
Speaker 1: Chef um and he's actually known in this industry for
28:16
Speaker 1: really having people of color in all levels management, servers, bartenders. UM.
28:21
Speaker 1: Another really fabulous example is Andy Shalal who owns bus
28:24
Speaker 1: Boys and Poets and Eatonville, all of this chain of
28:27
Speaker 1: restaurants in Washington, d C. Really great restaurants, casual, fine dining,
28:31
Speaker 1: people of color, women in all positions. So there are
28:34
Speaker 1: some really stand out examples that I provide in the
28:36
Speaker 1: book UM in terms of racial diversity. Danny Meyer also
28:40
Speaker 1: actually really does it well. He has a lot of
28:41
Speaker 1: people of color on the dining floor. So for those
28:43
Speaker 1: people who are outside of Manhattan, if you don't know
28:46
Speaker 1: Gramercy Tavern or Union Square Cafe, the moderns, shake Shock
28:51
Speaker 1: is now taking over the world and UM in New York.
28:55
Speaker 1: You go to Brian Park, their lines around the block
28:58
Speaker 1: and they seem to be opening up restaurant at a
29:00
Speaker 1: fast and furious space. Even his fast food chains. Does
29:04
Speaker 1: he maintain that same Oh yeah, shake Shock UM actually
29:08
Speaker 1: pays higher than almost any other There are only a
29:11
Speaker 1: few chains in and out. Burger on the West coast
29:14
Speaker 1: and in Texas is the highest paying chain in the country. Really, uh,
29:18
Speaker 1: and then shake Shock. So let's break this down by
29:21
Speaker 1: restaurants because I have down a couple of really interesting
29:25
Speaker 1: broad restaurant um types, fine dining, Mexican burgers and coffee.
29:29
Speaker 1: Since we started with burgers, let's talk about burgers. So
29:33
Speaker 1: you mentioned In and Out Burger, right, California staple Um
29:38
Speaker 1: and Shake Shock. To me, these are all fast food burgers,
29:43
Speaker 1: but these are the two amongst the best quality food burgers.
29:48
Speaker 1: You're telling me everything else they do is also that's right.
29:51
Speaker 1: I mean In and Out has provided livable wages. I'm
29:53
Speaker 1: talking fifteen and all really since the beginning. They provide
29:57
Speaker 1: paid sick days, they provide benefits, opportunities for advancement. They've
30:00
Speaker 1: just done it differently, and they're growing and they're really successful.
30:04
Speaker 1: And come on, nobody could deny that Shake Shack is
30:06
Speaker 1: doing really well fantastic paying workers a livable wage. Um.
30:11
Speaker 1: Five Guys was the other one that I thought was
30:14
Speaker 1: a good burger. I don't know how they're they're staffing, yeah,
30:16
Speaker 1: I mean, I think it varies in different regions, but
30:20
Speaker 1: we have found several five Guys restaurants that actually want
30:23
Speaker 1: to do the right thing, pay a livable wage, provide
30:25
Speaker 1: paid sick days. They're a little more varied across the country. Now,
30:28
Speaker 1: when we look at the rest of the burger sector,
30:31
Speaker 1: everything from McDonald's to Burger King, to Wendy's to all
30:33
Speaker 1: the other small ones, really not good uh employers. Well,
30:38
Speaker 1: it's not just that they're not good employers. They're actually
30:41
Speaker 1: the leaders of the National Restaurant Association. So what's important
30:43
Speaker 1: to note about these folks is they don't just follow
30:45
Speaker 1: the minimum wage and pay it. They actually set the
30:48
Speaker 1: minimum wage. They're in Congress lobbying to keep the wage
30:51
Speaker 1: at seven dollars. That's unbelievable. And if you look at
30:56
Speaker 1: the structure of you go around different stays and you
31:00
Speaker 1: look at who is the highest recipient of medicare medically
31:05
Speaker 1: and aid to depend on children exactly depending on the state,
31:08
Speaker 1: it's either Walmart, although that's changed, or McDonald's. McDonald's workers
31:13
Speaker 1: as a group are a huge subsidized entity to the
31:17
Speaker 1: local franchise. It's actually not just McDonald's, this entire industry.
31:21
Speaker 1: So we spend seven billion dollars in taxpayer money on
31:24
Speaker 1: fast food chain workers public assistance usage and nine point
31:28
Speaker 1: five billion dollars on full service restaurant workers public assistance usage.
31:33
Speaker 1: I'm talking about Apple, Applebee's and olive garden, and I
31:36
Speaker 1: hoped those workers get we're doubly subsidizing those full service
31:40
Speaker 1: restaurants because they're multibillion dollar companies. On the one hand,
31:44
Speaker 1: we pay their workers wages through our tips because they're
31:46
Speaker 1: paying two dollars. On the other hand, we're paying for
31:50
Speaker 1: their workers survival through public assistance. So we are doubly
31:53
Speaker 1: subsidizing the eye hops and the Applebe's and olive gardens
31:56
Speaker 1: of the world, and they're turning over incredible profits. I'm
31:59
Speaker 1: always a ended when a profitable public company is subsidized
32:03
Speaker 1: by taxpayers. That really gets gets my goat. Let's talk
32:06
Speaker 1: about a different group of restaurants. Mexican food, except for Chippotle,
32:13
Speaker 1: pretty much terrible across the board in terms of chains. Yeah,
32:16
Speaker 1: I mean, there are really fabulous independent Mexican restaurants around
32:20
Speaker 1: the country that do it right. Lappa LAPAs one here
32:23
Speaker 1: in the city in the village, fantastic Mexican restaurant, provides
32:26
Speaker 1: paid sick days. Has been an advocate for higher wages
32:29
Speaker 1: for a long time. Um. But among the chains, Chipotle
32:33
Speaker 1: does stand out. I mean, all the other chains are
32:35
Speaker 1: pretty terrible. UM, and I know Chippotle has been a
32:38
Speaker 1: lot in the news for other things lately, but I
32:41
Speaker 1: will say that they have been really good about asking
32:45
Speaker 1: what can we do better in terms of our workers
32:47
Speaker 1: and then actually doing it. So when people want to
32:50
Speaker 1: find your sort of research and writing, where's the best
32:53
Speaker 1: place for them to look? Go to Forked, the book
32:55
Speaker 1: dot com and on that you can actually see a
32:58
Speaker 1: website where you can see all the restaurants ratings, how
33:00
Speaker 1: people faring on issues of wages, benefits and promotions. You
33:03
Speaker 1: can also get the book and see the trailers. That's
33:05
Speaker 1: the best place. Thank you, Su for being so generous
33:08
Speaker 1: with your time. We've been speaking with Saru Jairamin. She
33:12
Speaker 1: is the director of Research Opportunity Center at You See
33:17
Speaker 1: Berkeley and author of the book Forked. If you enjoy
33:21
Speaker 1: this conversation, be sure and hang around and listen to
33:24
Speaker 1: our podcast extras where we keep the tape rolling and
33:27
Speaker 1: continue chatting. Be sure and check out my daily column
33:31
Speaker 1: on Bloomberg View dot com or follow me on Twitter
33:35
Speaker 1: at Ridlts. I'm Barry Rihults. You've been listening to Masters
33:39
Speaker 1: in Business on Bloomberg Radio. Welcome to the podcast, Saru.
33:43
Speaker 1: Thank you so much for doing this. This has really
33:45
Speaker 1: been quite fascinating. Um Before, during the broadcast segment we
33:50
Speaker 1: had talked about burgers and Mexican food. One of the
33:53
Speaker 1: things I had to ask you. In the book, you
33:56
Speaker 1: break down the restaurant industry by segment by segment, I
34:00
Speaker 1: was really surprised to see under the coffee segment. Look,
34:05
Speaker 1: I expect Duncan Donuts and Tim Horton and Panera to
34:09
Speaker 1: be mediocre, but Starbucks has a reputation. They offer healthcare,
34:14
Speaker 1: they do four oh one case. I assumed they were
34:18
Speaker 1: pretty good. You tell me not so much. Now. They've
34:21
Speaker 1: done a really amazing job at promoting the idea that
34:23
Speaker 1: they provide all of these things. But they have been
34:26
Speaker 1: under so much fire over the last many years from
34:29
Speaker 1: workers and journalists have uncovered this as well, that they
34:31
Speaker 1: just managed to consistently under provide just two little hours
34:37
Speaker 1: for workers to actually get those benefits, and so they
34:40
Speaker 1: employ lots of workers at very low wages with very
34:43
Speaker 1: little hours less than so far less. Most workers in
34:46
Speaker 1: Starbucks get less than twenty hours really, so they're having
34:49
Speaker 1: to piece together multiple shifts, multiple jobs, and it's incredibly
34:53
Speaker 1: difficult to survive. And and I do recall reading that
34:56
Speaker 1: that the shift changes happen really last many That's right.
35:00
Speaker 1: If you have to take care of a kid commitments,
35:03
Speaker 1: it becomes really challenged, really challenging. And when you're earning
35:05
Speaker 1: that little, you know, childcare is like half of your
35:08
Speaker 1: income and you can't even get back in time because
35:11
Speaker 1: you're asked to stay longer to clean up or whatever,
35:14
Speaker 1: and you end up paying more. My perspective is so skewed.
35:17
Speaker 1: You go into any Manhattan Starbucks, there are lines out
35:19
Speaker 1: the door. You see the same people working all week.
35:22
Speaker 1: I see the same faces all the time. But that's
35:24
Speaker 1: not how it is in the rest of that's not
35:25
Speaker 1: That's not how it is. And even those workers I think,
35:28
Speaker 1: you know, Starbucks, for how much they're charging us for coffee,
35:30
Speaker 1: could be paying these workers a lot better. But they're
35:33
Speaker 1: not well paid and they're just not given enough hours
35:36
Speaker 1: to survive. So is it an overstatement to say Starbucks
35:39
Speaker 1: is the new McDonald's. Um, it's a new kind of
35:43
Speaker 1: McDonald's because McDonald's doesn't make any pretension to being a
35:47
Speaker 1: good employer. Starbucks does. But unfortunately still work in any
35:55
Speaker 1: fast food restaurants. No, Um, I did a lot of
35:58
Speaker 1: No I didn't. I worked in in high school, I
36:01
Speaker 1: worked in McDonald's. I started on a Saturday and Sunday
36:05
Speaker 1: I gave them the hat night Brendon, I said, you
36:07
Speaker 1: keep the paycheck. I'm never coming back here and I'm
36:09
Speaker 1: never eating McDonald's again. And that was pretty much I
36:12
Speaker 1: think I might have on the road had a burger once,
36:15
Speaker 1: but that's pretty much it. Because you didn't like the
36:18
Speaker 1: way you were treated. Um. No, you start out with
36:21
Speaker 1: a bag of dehydrated onions the size of your fifths,
36:24
Speaker 1: and you put it into a pan that's three ft
36:27
Speaker 1: by one foot and fill it with water. In the
36:29
Speaker 1: next morning there reconstituted onions. And it makes you wonder
36:35
Speaker 1: what is the rest of this food like stuff that
36:38
Speaker 1: you're eating. And and look, I'm a foodie. I like
36:42
Speaker 1: really good restaurants, and I could eat fast food. I
36:46
Speaker 1: enjoy you know, shake shock, and you know, of of
36:50
Speaker 1: all the fast food before the New Rounds, it was
36:54
Speaker 1: Wendy's was much superior to McDonald's and Burger King because
36:57
Speaker 1: it was fresh and it felt like food. Yeah. Um,
37:02
Speaker 1: but really, anything that's mass produced like that and is
37:06
Speaker 1: consistent across the country is really just a food like
37:10
Speaker 1: substitute and not actual nutrition and that was the problem
37:14
Speaker 1: with that. Yeah, I mean, I think there are folks
37:15
Speaker 1: that are managing to get this, get quality to scale
37:18
Speaker 1: and good conditions to scale, and so in the coffee world,
37:21
Speaker 1: one example is Blue Bottle Coffee. They are but that's
37:25
Speaker 1: not a big chain. Is now they're growing really fast. Well,
37:28
Speaker 1: there's there in California, They're in New York, they're in Tokyo.
37:31
Speaker 1: They're growing really rapidly. Yeah. One, um, I think it's
37:35
Speaker 1: just off Broadway and nine. Yeah. Good. It's extremely high
37:39
Speaker 1: quality coffee and they pay a livable wage. I'm talking
37:42
Speaker 1: closer to fifteen dollars an hour. Really, yeah, that's interesting.
37:46
Speaker 1: The the other place we were talking about earlier Chippotle.
37:52
Speaker 1: One of the things so we alluded to the problems
37:55
Speaker 1: they've had. They had an e coal I break out, which, now,
37:58
Speaker 1: by the way, I forgot someone just came out and
38:00
Speaker 1: declared it's over. I don't know if we or somebody else,
38:03
Speaker 1: but the issue they ran into is specifically because they're
38:07
Speaker 1: not sourcing everything to one farm that they could closely monitor.
38:11
Speaker 1: It's all local, and that that's was much more challenging
38:14
Speaker 1: to how do you stay on top of how people
38:17
Speaker 1: are washing their hands in the field at ten thousand
38:21
Speaker 1: local farms. Yeah, but it's still it's still the right
38:24
Speaker 1: way to actually have locally sourced, sustainable organic food, you know,
38:29
Speaker 1: non GMO, right, and it's possible, and they've done They've
38:34
Speaker 1: done really well. The the joke I tweeted the other
38:37
Speaker 1: day the day of the Powerball lottery was I'm feeling lucky,
38:42
Speaker 1: so I'm gonna buy a Powerball lottery ticket and go
38:45
Speaker 1: to chippotl and I only I one of them worked
38:49
Speaker 1: out and the other one. So it was that what
38:52
Speaker 1: what about fine dining? So I was a little bummed
38:54
Speaker 1: to see Del Frisco is on your list of bad
38:57
Speaker 1: fine dining establishments. That's a great stay cost. But now
39:01
Speaker 1: that I think about it, I've never had anyone. I've
39:04
Speaker 1: had some women servers, but everybody has been a white person.
39:09
Speaker 1: The bart one of the bartenders there is of color,
39:12
Speaker 1: but it's a pretty you know, white bread sort of.
39:16
Speaker 1: I mean, most of the chain fine dining steakhouses are
39:20
Speaker 1: actually leaders in the National Restaurant Association, most of them,
39:23
Speaker 1: so they all follow that same what we call low
39:26
Speaker 1: road standard. I always forget there a chain because that
39:30
Speaker 1: they've they started out as like all the chain started
39:32
Speaker 1: as a single steakhouse. And unless you see them pop
39:36
Speaker 1: like you see Ruth, Chris and Mortens, they pop up everywhere.
39:40
Speaker 1: There's only a handful of Del Frisco. So I don't
39:42
Speaker 1: really think of it. What about the other steakhouses like, um,
39:48
Speaker 1: I'm just trying to think of what's not a chain.
39:51
Speaker 1: Smith and Lanski has always been a Peter Lugers is
39:54
Speaker 1: another one. I don't think anyone who's working in Peter
39:57
Speaker 1: Lugers is less than a hundred years old. So they
40:00
Speaker 1: they were hired before emancipation, right, it's am I right,
40:05
Speaker 1: it's a bunch of old white They are professionals, and
40:09
Speaker 1: I will say I mean even like a bowtload of money. Yeah,
40:12
Speaker 1: and we wish they were more diverse, but they are
40:15
Speaker 1: professionals who have a craft and do it really well.
40:18
Speaker 1: And that's we want. We want everybody to be valued
40:21
Speaker 1: the way they're valued. Right, you know that's the right
40:23
Speaker 1: I think that's the real right way to say it.
40:25
Speaker 1: So I know we only have you for a limited
40:27
Speaker 1: amount of time. You you you have a couple of places
40:29
Speaker 1: to run to. Let me go through some of my
40:32
Speaker 1: favorite questions that I asked all my guests, and I'll
40:35
Speaker 1: do the short version. So, so, who are your early
40:38
Speaker 1: mentors who helped you, you know, public policy and yell
40:42
Speaker 1: law school. How do you become a restaurant advocate, restaurant
40:45
Speaker 1: worker advocate? Oh gosh, um, any professor stand down, anybody
40:51
Speaker 1: stand out? Is steering you into this or was it
40:53
Speaker 1: just serendipity post nine eleven? I mean, honestly, it was
40:57
Speaker 1: my family, who are immigrants from India, and you know
41:01
Speaker 1: immigrants are My parents, like most immigrants, are just incredibly resilient, persistent,
41:08
Speaker 1: very politically astute, very aware of what was going on
41:11
Speaker 1: in angry and for me, it was about turning that
41:14
Speaker 1: anger into positive action. And that's what this has been about.
41:18
Speaker 1: So you were you were born in Rochester. Did you
41:21
Speaker 1: parents migrates to go? Yeah? My parents actually I was
41:24
Speaker 1: the first baby born in the United States. They came
41:26
Speaker 1: from India, had me in Rochester, and then we moved
41:28
Speaker 1: to California, nicer weather, better opportunities. Um. So that's the
41:35
Speaker 1: thing is that they've always sought better and better and
41:38
Speaker 1: better for their children, and that is the story of
41:41
Speaker 1: the immigrants, and for us, that's actually the story of
41:43
Speaker 1: this book. Too. It's the high road. It's continuously seeking
41:46
Speaker 1: to do better. Someone would some people would say that's
41:49
Speaker 1: the story of America is that's immigrants, people constantly looking
41:52
Speaker 1: for a better opportunity, that's right for their kids, that's right.
41:55
Speaker 1: In the next generation we get lazy and sloppy. We
41:58
Speaker 1: don't know how bad it was over there. I'm sure,
42:01
Speaker 1: like I heard, I'm sure you've heard stories. Yeah growing up. Um,
42:05
Speaker 1: what are some of your favorite books? I don't care
42:06
Speaker 1: if it's fiction non fiction. What influenced your thought process
42:10
Speaker 1: about this? I mentioned Kitchen Confidential Anthony boor Dane, which
42:15
Speaker 1: is both ribald and hilarious. Yeah, I'm Nickel and dimed
42:18
Speaker 1: by Barbara Aaron right was really it was the Walmart employer.
42:21
Speaker 1: She worked in Walmart, you worked undercover as a waitress,
42:25
Speaker 1: actually as a domestic work as a house cleaner. And
42:28
Speaker 1: I can't remember what the third low age job she did,
42:31
Speaker 1: but um, you know she lived in her car, living
42:34
Speaker 1: on these wages. So that was really eye opening. Um. Fiction,
42:39
Speaker 1: I love arn that they roy you know a lot
42:41
Speaker 1: of books, international books, so real mix of things and um,
42:45
Speaker 1: so what do you what do you see changing in
42:49
Speaker 1: the restaurant industry, what changes are taking place, and what
42:52
Speaker 1: might change going forward. Yeah. So I'm sure everybody's heard
42:56
Speaker 1: a lot in the news about Danny Meyer and this
42:59
Speaker 1: whole move to limon tipping. And you know, we Danny
43:02
Speaker 1: Mar's company had actually been a part of our Association
43:05
Speaker 1: of High Road Restaurants for over a decade um, but
43:08
Speaker 1: he and I actually hadn't sat down, and when we
43:10
Speaker 1: finally did, we told him everything I've talked to you
43:13
Speaker 1: about today in terms of this whole history of tipping
43:16
Speaker 1: being you know, rooted in slavery, in the tipmenimum wage,
43:18
Speaker 1: and impact on women in sexual harassment. And he said,
43:21
Speaker 1: you know, I've been thinking about these issues for twenty years.
43:24
Speaker 1: Let's think about moving in a different direction. And so
43:27
Speaker 1: we worked with them over a series of months and
43:29
Speaker 1: they actually, you know, they did it right. They moved
43:32
Speaker 1: to eliminate tipping in a way that actually makes their
43:35
Speaker 1: workers whole. So they're ensuring that workers are now getting
43:37
Speaker 1: everything that they would have gotten in tips now through
43:40
Speaker 1: revenue share, now through wages. What's the transition been like
43:43
Speaker 1: for the restaurants have have? What do customers say? How
43:46
Speaker 1: was it worked out for everybody? I mean everybody seems
43:48
Speaker 1: to be really happy. We interviewed workers, we interviewed customers.
43:51
Speaker 1: They've done it really well that they had town hall
43:54
Speaker 1: meetings with workers and customers and management, and they just
43:57
Speaker 1: really had a very inclusive and transparent ass and that's
44:00
Speaker 1: how we would want it done. You know, our fight
44:02
Speaker 1: is not actually to eliminate tipping. We don't actually advocate
44:05
Speaker 1: for that. We're advocating for one fair wage with tips
44:08
Speaker 1: on top, as they have in California. But it's really
44:12
Speaker 1: to raise the floor exactly and ensure that the employers
44:15
Speaker 1: actually paying a full wage and let tips be on
44:17
Speaker 1: top of that. But if employers want to go further
44:21
Speaker 1: and eliminate tips altogether, we are supportive if they do
44:24
Speaker 1: it the way Danny Meyer did, which is inclusive and transparent,
44:27
Speaker 1: and ensure that their workers are making everything they would
44:30
Speaker 1: have made in tips now through wages. So you work
44:33
Speaker 1: with a lot of students, you're you're over you see Berkeley.
44:35
Speaker 1: What sort of advice would you give to either a
44:38
Speaker 1: millennial or college grad who says, I really want to
44:42
Speaker 1: get into the restaurant industry. I would say, um, well, definitely,
44:48
Speaker 1: I think, uh stick with it. You know, view it
44:51
Speaker 1: as a profession. Um, give it your all and be
44:55
Speaker 1: join us and be a part with us of making
44:57
Speaker 1: it a better industry for everybody. So definitely focus on
45:01
Speaker 1: your career, you know, go all the way. Definitely do
45:04
Speaker 1: your thing, but also join us and making it better,
45:06
Speaker 1: because only by working with us to professionalize this industry
45:10
Speaker 1: will your work in this industry be valued and our
45:12
Speaker 1: our final question, what is it that you know about
45:16
Speaker 1: the restaurant industry that you wish you knew twenty years ago?
45:22
Speaker 1: That question always gives pause. Yeah, you know when I
45:26
Speaker 1: when I remember as a law student and right after
45:29
Speaker 1: law school being a card carring foodie. I mean I
45:32
Speaker 1: lived here in New York City. I ate three times out,
45:35
Speaker 1: you know, three times a day out, and I ate
45:38
Speaker 1: everything and I was totally oblivious. I cannot remember a
45:42
Speaker 1: single worker from all those years of eating out. And
45:45
Speaker 1: so now as a diner when I eat out, I
45:48
Speaker 1: noticed things. I noticed the racial makeup of the end
45:51
Speaker 1: of the restaurant. I noticed how women are being treated.
45:54
Speaker 1: I noticed I think about things like paid sick days
45:56
Speaker 1: and wages, and I just I think all of us.
45:59
Speaker 1: I would I had known this twenty years ago to
46:01
Speaker 1: be a different kind of diner, and I would encourage
46:04
Speaker 1: all of us to be a different kind of diner,
46:06
Speaker 1: to know what's happening in this industry, and to really
46:08
Speaker 1: encourage this industry to take the high road. So Ruth,
46:11
Speaker 1: thank you so much for being so generous with your time.
46:14
Speaker 1: I would be remiss if I did not thank my
46:16
Speaker 1: head of research, Mike Batnick, and my recording engineer, Charlie Vohmer.
46:22
Speaker 1: If you enjoyed this conversation, be sure and look up
46:24
Speaker 1: or down an Inch on iTunes and you could see
46:27
Speaker 1: the other eighty eight or so such chats we've had.
46:30
Speaker 1: Be sure and check out saw Ru's other writings on
46:34
Speaker 1: forked the book dot com. You've been listening to Masters
46:38
Speaker 1: in Business on Bloomberg Radio.