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Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.

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Speaker 1: This week on the podcast, we have a special guest,

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Speaker 1: and actually an unusual and interesting guest. Her name is

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Speaker 1: Saru Jairamin. She's got a fascinating background both as an

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Speaker 1: educator and an attorney. She's been really focusing on restaurant

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Speaker 1: labor relations and the way we treat UH employees who

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Speaker 1: basically prepare and service food when we go out to eat.

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Speaker 1: And this began after nine eleven when a number of

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Speaker 1: family members of workers who were at Windows in the

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Speaker 1: world UH perished in the terrorist attack, and that led

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Speaker 1: her down a path of exploring all sorts of things

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Speaker 1: related to the restaurant industry. She has been working with

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Speaker 1: restaurateurs such as Danny Meyer, helping to create a fairer

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Speaker 1: workplace for employees UH. And she's really very much influenced

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Speaker 1: the latest movement in dining out, which is the end

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Speaker 1: of tipping, replacing tipping with a flat salary and building

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Speaker 1: UH the cost of service into the meal as opposed

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Speaker 1: to leaving it an option for for diners. And some

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Speaker 1: people say they really like this. There are a lot

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Speaker 1: of folks who don't like the pressure of tipping. Don't

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Speaker 1: like feeling like they're obligated to overtip or to what

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Speaker 1: have you. They want to pay for a service and

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Speaker 1: and know exactly what it's gonna cost beforehand. She has

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Speaker 1: been one of the thinkers at the forefront of this movement,

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Speaker 1: and a number of restaurants have adopted this idea as

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Speaker 1: a way to just let people know exactly what their

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Speaker 1: meal is going to cost. UH. The conversation range far

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Speaker 1: and wide. I think it's really a fascinating subject, and

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Speaker 1: I think you'll enjoy hearing more so. Without any further ado,

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Speaker 1: my conversation with saru Jaya Raman. This is Master's in

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Speaker 1: Business with Barry Ridholts on Bloomberg Radio. My special guest

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Speaker 1: today is saru Ja Rahman. She is the co director

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Speaker 1: of the Restaurant Opportunity Center and the director of the

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Speaker 1: Food Labor Research Center at u C. Berkeley. She's also

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Speaker 1: the creator of a delightful app, The Diner's Guide to

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Speaker 1: Ethical Eating. A little background on Saru. She went to

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Speaker 1: undergraduate u C. L A, where she studied policy and

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Speaker 1: international development. Studies that took her to Harvard and the

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Speaker 1: John F. Kennedy School of Government, where She graduated with

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Speaker 1: a master's in public policy before going to Yale Law School.

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Speaker 1: Her specialty these days is restaurant labor employment. SARU, Welcome

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Speaker 1: to Bloomberg. Great, great to be here. So let's talk

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Speaker 1: a little bit about your backgrounds. Following nine eleven, the

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Speaker 1: World Trade Center is destroyed. Most of the employees at

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Speaker 1: Windows on the World, which were on the top floor,

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Speaker 1: essentially everybody who made it to work that morning perished

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Speaker 1: in the uh in the terrorist attack. How did that

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Speaker 1: evolve into advocacy for restaurant workers. Yeah, so on that morning,

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Speaker 1: seventy three workers actually died at Windows on the World,

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Speaker 1: and about workers lost their jobs, and about thirteen thousand

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Speaker 1: restaurant workers lost their jobs in the months and weeks

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Speaker 1: that followed the tragedy. And so I worked with one

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Speaker 1: of the former waiters that Windows on the World, a

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Speaker 1: guy named Fak mom Do, and we started the organization

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Speaker 1: initially as a relief center to help all of these

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Speaker 1: thousands of restaurant workers in New York get back on

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Speaker 1: their feet, especially the Windows workers. But um, because this

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Speaker 1: isn't one of the largest and fastest growing industries, and

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Speaker 1: because actually there is no union in this industry, there's

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Speaker 1: very little support for these workers. The minute we opened

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Speaker 1: our doors, we started getting cries for help from workers

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Speaker 1: all over the city and then all over the country,

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Speaker 1: and then employers and consumers, and it just kept growing.

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Speaker 1: So I waited my way through college and grad school.

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Speaker 1: I attended barn did shore chefs, and and knowing that

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Speaker 1: that wasn't my career, I kind of shrugged and said

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Speaker 1: laughed at what a horrific industry it is. But really

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Speaker 1: there are some horror stories in the restaurant industry. Did

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Speaker 1: you you worked as a as a waitress in school?

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Speaker 1: I actually didn't. You know, that's kind of one of

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Speaker 1: the incredible discoveries. Actually doing research for the book, you know,

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Speaker 1: I went back and traced my family's origins in the

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Speaker 1: restaurant industry, and you know, my family actually were owners

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Speaker 1: of a restaurant, worked in restaurant. Grandfather great grandfather in

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Speaker 1: South India owned a restaurant for decades and decades and

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Speaker 1: decades and employed lots and lots of people. Um, but

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Speaker 1: I never worked in a restaurant until we actually opened

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Speaker 1: our own restaurants through Rock, so learned a lot from

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Speaker 1: the workers. The minute after nine eleven was thrown together

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Speaker 1: with these workers and really tried to do something to

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Speaker 1: change this, and it's a really tough business. The status

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Speaker 1: of all new restaurants closed within two years. So the

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Speaker 1: question is, what can you do to make restaurants given

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Speaker 1: how terrible a tract record, they tend to have a

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Speaker 1: better place to to work. Well. The truth is that, yes,

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Speaker 1: it is true that lots of new restaurants failed, but

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Speaker 1: the numbers show that actually the number of new restaurants

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Speaker 1: that succeed and stay open um far exceeds that. Because

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Speaker 1: it is still the second largest and absolute fastest growing

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Speaker 1: sector of the U. S economy, in the largest sector

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Speaker 1: of the US economy. That's amazing. It's amazing. It's eleven

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Speaker 1: million workers. One in twelve Americans works in this industry.

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Speaker 1: One and two of us have worked in this industry

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Speaker 1: in our lifetime. So it's not like it's an industry

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Speaker 1: that's going anywhere or is tiny or small. And there

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Speaker 1: are plenty of restaurants, many of whom I profile in

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Speaker 1: the book, that have shown that you actually can treat

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Speaker 1: your workers well, pay them well, and stay in business

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Speaker 1: for a really long time. Let's talk a little bit

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Speaker 1: though about the app you created the Diners Guide to

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Speaker 1: Ethical Eating tell us about that. So for years people

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Speaker 1: would say, well, we know that things are so bad,

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Speaker 1: where can we eat? What can we do? How can

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Speaker 1: we support? And so we started actually doing research and

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Speaker 1: doing research on the hundred and fifty most popular chains

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Speaker 1: in America and every year giving them ratings on issues

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Speaker 1: of wages and benefits and promotions, and then also rating

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Speaker 1: restaurants that we're trying to work with us to do better.

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Speaker 1: And so now the app includes ratings of the hund

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Speaker 1: fifty most popular restaurants in America, mostly chains, and also

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Speaker 1: a hundred and fifty other restaurants that are doing it right,

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Speaker 1: and we give awards to restaurants that provide good wages

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Speaker 1: and good working conditions. So it uses a geolocator to

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Speaker 1: see where you are and tells you how the restaurants

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Speaker 1: around you are faring on these issues. Now, there aren't

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Speaker 1: enough restaurants in America that are getting awards for you

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Speaker 1: to only eat in those restaurants. So the app was

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Speaker 1: never meant to tell you eat here, don't eat here. Rather,

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Speaker 1: it's a tool for you to be able to communicate

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Speaker 1: your values wherever you do end up eating out is

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Speaker 1: this significantly downloaded or a lot of people using Yeah. Actually,

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Speaker 1: when we first put it out, Mark Bittman wrote about

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Speaker 1: it in the New York Times, you know, great food writer,

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Speaker 1: and several hundred thousand people downloaded it in the first

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Speaker 1: day when he wrote about it. And it's because people,

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Speaker 1: i think, really want to know. How is this restaurant

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Speaker 1: treating its workers? Do they offer paid sick days? Which,

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Speaker 1: by the way, these workers don't have a single paid

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Speaker 1: sick day. So most that was the most I'm sorry

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Speaker 1: to interrupt, that was the most We're going to get

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Speaker 1: to that. That was the most horrifying stat in the book.

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Speaker 1: Most of us just close our eyes and don't want

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Speaker 1: to know. But some of these stats, if you want

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Speaker 1: to stay healthy, you have to know. And it's just

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Speaker 1: it's just terrible. So in the last minute we have

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Speaker 1: in the segment you talk about the other n r A,

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Speaker 1: let's discuss that. So it's not the National Rifle. This

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Speaker 1: is the National Restaurant Association. Yes, what's your relationship with them?

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Speaker 1: And how helpful or how much of an impediment are

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Speaker 1: they too improving labor conditions? Well, they really don't like us.

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Speaker 1: They've been they represent the Fortune five hundred chains, the

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Speaker 1: Olive gardens, and the Taco Bells and McDonald's, and they've

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Speaker 1: been lobbying to keep wages as low as two dollars

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Speaker 1: and thirteen cents an hour for decades and decades. In fact,

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Speaker 1: that is the current federal minimum wage for tipped workers.

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Speaker 1: And in doing research for this book, find come to

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Speaker 1: find that their power doesn't make date back twenty or

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Speaker 1: thirty years. It date back a hundred and fifty years

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Speaker 1: to the emancipation of this is tipped at McDonald's or

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Speaker 1: Taco Bell. Nobody's tipped at McDonald's or Taco Bell. But

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Speaker 1: they've managed to keep the wage even for those workers

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Speaker 1: as low as seven dollars and which is the national

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Speaker 1: minimum wage, which is really way behind inflation. If it

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Speaker 1: had gone up with in place, you would be at

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Speaker 1: eighteen dollars. That's amazing. I'm Barry rid Halts. You're listening

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Speaker 1: to Masters in Business on Bloomberg Radio. My special guests

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Speaker 1: this week is sarru Ja Rahman, and we're talking about

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Speaker 1: the strong industry. Uh And one of the subjects that

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Speaker 1: came up was an op ed that you had written

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Speaker 1: in The New York Times, sort of misleadingly headlined why

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Speaker 1: tipping is wrong. So, so let's jump right into this,

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Speaker 1: what's the problem with tipping. It's actually not the problem

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Speaker 1: with tipping. It's the fact that this industry, the restaurant industry,

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Speaker 1: has used tipping as a way to not pay their

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Speaker 1: own workers. So turns out tipping didn't originate in the States.

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Speaker 1: That originated in the feudal homes of Europe. And when

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Speaker 1: it came to the States, there was actually a massive

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Speaker 1: anti tipping movement, so strong that six states past bands

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Speaker 1: on tipping. Really, that's fascinating. Now that's kind of changed

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Speaker 1: in Europe seems to be going away. It was gone.

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Speaker 1: I mean, that was the turn of the nineteenth century,

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Speaker 1: and that movement that started in the States spread to

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Speaker 1: Europe and succeeded in Europe, which is why there's no

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Speaker 1: tipping in Europe or very little here in the States.

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Speaker 1: The restaurant industry actually squashed that movement and demanded the

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Speaker 1: right to hire newly freed slaves this is right around

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Speaker 1: the time of emancipation and not pay the many thing

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Speaker 1: and let them live on customer tips. And that's actually

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Speaker 1: how the very first minimum wage law in the United States,

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Speaker 1: which was part of the new deal in eight said

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Speaker 1: you can get the minimum wage as a tipped worker

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Speaker 1: either through your wages or through tips, which gave tipped

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Speaker 1: workers the right to a zero dollar minimum wage. And

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Speaker 1: we've gone from a zero dollar minimum wage in ninety

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Speaker 1: eight to a whopping two dollars and thirteen cents an hour,

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Speaker 1: which is the current federal minimum wage for workers who

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Speaker 1: earned tips. And over that one hundred year period, the

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Speaker 1: Restaurant Association has said, it's okay, we don't need to

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Speaker 1: pay these workers and make a ton of money and tips.

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Speaker 1: We don't have to actually give them a wage. They

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Speaker 1: describe a white guy working at a fancy, fine dining stagehouse,

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Speaker 1: when in fact, so many of these workers are women

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Speaker 1: who work at Eyehop and Applebee's and suffer from three

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Speaker 1: times the poverty rate of the rest of the U

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Speaker 1: S workforce, make very little money and tips, and suffer

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Speaker 1: from the worst sexual harassment of any industry. You can

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Speaker 1: detail some in the book. So let me push back.

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Speaker 1: Let me take the other side of the argument. Look,

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Speaker 1: we open a restaurant, we don't know how well it's

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Speaker 1: gonna do. We hire a bunch of people, hopefully they're

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Speaker 1: pretty good. If the restaurant takes a while to be discovered, Well,

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Speaker 1: we don't have a huge overhead in labor. We're all

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Speaker 1: kind of suffering. We're running out of deficit. The first

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Speaker 1: few months, the restaurant picks up an audience, it gets popular,

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Speaker 1: and suddenly everybody's making money. What's wrong with that model? Well,

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Speaker 1: the thing is that that's the traditional model, the old model,

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Speaker 1: And that's why the book is called Forked, because there

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Speaker 1: actually is another way of doing things. California and six

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Speaker 1: other states actually require that this industry pay a full

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Speaker 1: minimum wage to their workers and let tips be on

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Speaker 1: top of that. And there's a full minimum wage. So

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Speaker 1: you're a waitress at an eye hop in California and

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Speaker 1: you're making seven, well, actually making nine, which is the

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Speaker 1: California state minimum wage plus tips. And California actually has

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Speaker 1: the largest and fastest scoring restaurant industry in the country.

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Speaker 1: L A has a larger restaurant industry than New York City,

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Speaker 1: Believe it or not. They have higher restaurant sales per capita,

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Speaker 1: higher job growth in the restaurant industry, higher job growth

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Speaker 1: among servers, even higher rates of tip ping. We tip

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Speaker 1: better on the West Coast than in New York or

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Speaker 1: the forty three states with lower wages for tipped workers.

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Speaker 1: So the opposite can actually be said to be true

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Speaker 1: that if you have a standard that's set for a

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Speaker 1: whole state or hopefully the whole country, that requires every restaurant,

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Speaker 1: like every other industry, to pay the full minimum wage,

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Speaker 1: you will follow that business model and make it work.

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Speaker 1: So we've been watching forecasts of Seattle restaurant industry imploading

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Speaker 1: and actually what's happened when Seattle raised their minimum wage,

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Speaker 1: which I think is on the way to fifteen, it's

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Speaker 1: now about eleven um. Their restaurant industry is well, but

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Speaker 1: you know, I think people get it backwards. The region

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Speaker 1: is doing really well so they can support more restaurants.

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Speaker 1: But there's no other way to describe it. The number

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Speaker 1: of new openings and new priman application that's just trending

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Speaker 1: straight upwards in Seattle. They don't care about eleven that's frankly,

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Speaker 1: it's trending upwards everywhere. This is an industry that's growing

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Speaker 1: astronomically everywhere. We just made world history last year, becoming

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Speaker 1: the first nation on Earth in which we're now spending

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Speaker 1: more money on eating out than we do in the home.

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Speaker 1: Money on eating food in the home. That's the sign

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Speaker 1: of a wealthy nation with a lot of disposable well,

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Speaker 1: not just that, it's a sign of a nation that

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Speaker 1: even when we're unemployed, we just keep eating out. That's

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Speaker 1: that's amazing. So let's talk about what the system should

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Speaker 1: look like. Ideally, what do you replace the two dollar

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Speaker 1: minimum wage with? What does everybody in what should everybody

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Speaker 1: in a restaurant make? And what should we do about tipping?

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Speaker 1: So what we're looking at right now are policies that

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Speaker 1: are moving in lots of states around the country and

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Speaker 1: in Congress called one Fair wage, getting rid of this

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Speaker 1: two tiered wage system, having everybody follow California and the

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Speaker 1: seven states that have done this and just let this industry,

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Speaker 1: like every other industry, pay the full minimum wage. Let

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Speaker 1: tips be what they're meant to be, which is a

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Speaker 1: bonus or a gratuity on top of a wage. It's

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Speaker 1: not the way wage itself. Yeah, that makes a lot

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Speaker 1: of sense. Um, So will this if we were to

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Speaker 1: get rid of tipping or increase the minimum wage for

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Speaker 1: for wait staff, that will that raise the cost of

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Speaker 1: of going out to eat? No? I live in California,

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Speaker 1: and I gotta say I spend way more on eating

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Speaker 1: out here in New York City or in d C,

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Speaker 1: where the wages two dollars and seventy seven cents an

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Speaker 1: hour than when I eat at home in California. In

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Speaker 1: a real estate though, isn't it? You're in a much

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Speaker 1: higher real estate expense. And I think the cost of

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Speaker 1: labor and restaurants is really a small and the cost

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Speaker 1: of food. It's the real estate and then well the

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Speaker 1: equipment that everything else. Food prices have risen astronomically over

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Speaker 1: the last many years, much faster than wages, way faster

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Speaker 1: than wages. Last decade, milk over six, meat quadruple exactly,

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Speaker 1: and find meat just keeps going up exactly. It's funny

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Speaker 1: people always ask about cost of food going up with labor,

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Speaker 1: but you don't ask does cost of food go up

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Speaker 1: with food price increases or rental price increases, which, as

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Speaker 1: you're right, are much bigger part of a business than labor.

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Speaker 1: And the labor that that's really interesting. And what about

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Speaker 1: the smaller mom and pop stores, can they support a

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Speaker 1: higher minimum wave? They are actually the ones that are

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Speaker 1: thriving in California they're thriving. Yeah, and I and even

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Speaker 1: the chains, I mean, across the board, everybody's doing better

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Speaker 1: if you look at job growth in these seven states,

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Speaker 1: in the forty three states. But maybe the best evidence

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Speaker 1: of this is the hundred and seventy five restaurants that

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Speaker 1: have worked with US to form an alternative national restaurant

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Speaker 1: association called Raise. And they range from chains all the

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Speaker 1: way down to small mom and pop restaurants around the

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Speaker 1: country that actually provide livable, even what they call thrivable wages, benefits,

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Speaker 1: advancement opportunities. And they're doing well, not in spite of

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Speaker 1: treating their workers will and paying them well, but actually

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Speaker 1: because they're treating their workers well. They find less turnover,

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Speaker 1: higher profitability, higher profit productivity. The workers are happy, the

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Speaker 1: customers are happy, and they've they're thriving as businesses. We

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Speaker 1: watched Walmart fight an increase in minimum wage for many

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Speaker 1: years and then ran into a problem of being unable

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Speaker 1: to find workers, and then read pining them. They did.

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Speaker 1: They did two minimum wage raises a dollar last year,

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Speaker 1: and they're up to ten dollars now, and they're already

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Speaker 1: showing stigns of a reduced turnover and when you employ

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Speaker 1: two million people, turnover is a big deal. It's a

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Speaker 1: big deal in our industry. To our industry has the

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Speaker 1: highest rates of turnover of any industry the United States,

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Speaker 1: and our research shows you can cut your turnover almost

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Speaker 1: in half by treating your workers well and paying paying

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Speaker 1: them well. I'm Barry rid Helts. You're listening to Masters

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Speaker 1: in Business on Bloomberg Radio. My special guest this week

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Speaker 1: is Saru J. Rahman. She is the co director of

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Speaker 1: the Restaurant Opportunity Center and director of the Food Labor

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Speaker 1: Research Center at You See Berkeley. She's also the author

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Speaker 1: of Forked, a New Standard for American Dining. And we've

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Speaker 1: been discussing the minimum wage and the impact of that

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Speaker 1: on the restaurant industry. So let's go back to the

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Speaker 1: history of this which you referenced earlier. Why is it

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Speaker 1: that restaurants can get away with pay so little because

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Speaker 1: they originally the original tipped workers in this country were

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Speaker 1: actually former slaves, both restaurant workers and pullman train car borders.

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Speaker 1: They were. I actually didn't either until we did research

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Speaker 1: for the book, and um, this industry, the restaurant industry

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Speaker 1: made the argument that they wouldn't be able to survive

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Speaker 1: if they actually had to pay these workers a wage,

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Speaker 1: so they basically hired newly freed slaves demanded the right

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Speaker 1: to pay them nothing. That idea was codified into the

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Speaker 1: very first minium wage lat Past in nineteen thirty eight,

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Speaker 1: which gave tipped workers the right to a zero dollar

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Speaker 1: minum wage. These were mostly black workers, former slaves, and

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Speaker 1: we've gone from that zero dollar wage to a two

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Speaker 1: dollar and thirteen cents wage today. Let's for a century, right,

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Speaker 1: But stop and think about if you're arguing as a

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Speaker 1: free market person who doesn't want government regulation, how can

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Speaker 1: you say our business model depends on free labor? Exactly,

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Speaker 1: very very little. I mean honestly, that was the argument

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Speaker 1: of the cotton industry, right, that they their whole business

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Speaker 1: model and the economy dependent on free labor, and form

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Speaker 1: still making the same argument today. It really brings, you know,

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Speaker 1: bears question of is this sustainable business model? So so

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Speaker 1: I mentioned some of the stats were really horrifying in

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Speaker 1: the book. Seven of the ten lowest paying jobs and

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Speaker 1: the two absolute lowest paying jobs in America are in restaurants.

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Speaker 1: That's right, And when you combine that with knowing this

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Speaker 1: is the largest and fastest growing industry in America. What

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Speaker 1: you end up with is essentially this industry proliferating the

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Speaker 1: lowage economy, the low age floor of the entire economy,

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Speaker 1: and bringing down the floor for the entire nation. UM,

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Speaker 1: and it's going to be these are the jobs that

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Speaker 1: are going to be available for our children. I teach

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Speaker 1: at UC Berkeley, I would say a good third to

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Speaker 1: a half of my students work in the industry, and

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Speaker 1: many stay in the industry after college now with a

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Speaker 1: UC Berkeley degree, because these are the jobs that are available.

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Speaker 1: That UM is not encouraging if how are you going

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Speaker 1: to pay student loans on It's hard to pay student

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Speaker 1: loans on these wages. But I will say the way

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Speaker 1: we look at these jobs also is not right. You know,

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Speaker 1: it should be okay for UC Berkeley graduate to go

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Speaker 1: into this industry because these are skilled professions. These are

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Speaker 1: very skilled professions, and in other countries like Europe. In Europe,

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Speaker 1: these are scene Hospitality is a profession. You go to

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Speaker 1: school to be a hospitality professional. It's something seen as

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Speaker 1: very uh you know, skilled. The issue here is not

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Speaker 1: that these aren't good professions. The issues that they're not

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Speaker 1: valued as professions, both in terms of pay and benefits.

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Speaker 1: In terms of even this whole idea that these workers

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Speaker 1: should rely on the largesse of customers, it detracts from

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Speaker 1: the professionalism of this industry. So on my most recent vacation,

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Speaker 1: I read the non academic version of your book, which

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Speaker 1: is Kitchen Confidential by Anthony Bourdain's and it's hilarious and

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Speaker 1: ribald and just you know, also rather are rated. But

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Speaker 1: it tells essentially the almost the same exact story you

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Speaker 1: tell from an academic perspective, of how horrific a lot

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Speaker 1: of the quality is of handling food, how high the

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Speaker 1: turnover is in restaurants, how waitresses are constantly sexually harassed

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Speaker 1: both by forget the employees, but by management, and so

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Speaker 1: the question is what makes this industry such a frat house?

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Speaker 1: That's why is this this? I mean, in our opinion,

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Speaker 1: all of our research shows that the real root of

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Speaker 1: the problem is this two tiered wage system. Because se

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Speaker 1: of tipped workers who live on that lower wage of

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Speaker 1: two dollars and thirteen cents, or here in New York

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Speaker 1: State it's seven dollars, whatever it is in the state,

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Speaker 1: they rely completely on their tips. Those workers are women

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Speaker 1: and their women who work at ihop and Applebee's and

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Speaker 1: basically pay their families on customer tips. And our research

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Speaker 1: shows that having to rely on tips for your income

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Speaker 1: not only makes you vulnerable to all kinds of gross

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Speaker 1: and appropriate behavior from customers, but we also find that

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Speaker 1: management actually encourages these workers to dress sexy where tighter clothes,

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Speaker 1: which show more cleavage, so that they can make more

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Speaker 1: money and tips. And when you're forced to subject yourself

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Speaker 1: to objectification, that makes you vulnerable to coworker and management.

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Speaker 1: And we're not talking about restaurant chains like Hooters or

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Speaker 1: restaurants people. We're talking about family restaurants like Denny's and

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Speaker 1: eye hops and everything. I took my two little girls

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Speaker 1: to the Chili's. They're three and five years old. It's

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Speaker 1: a family restaurant, Chilis, And the uniform was all the

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Speaker 1: servers are women, yes, And the uniform was a tight

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Speaker 1: T shirt that said fresh across the breasts, a very

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Speaker 1: tight T shirt. And you have to ask yourself, what

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Speaker 1: are we selling, because you know it is the chilies

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Speaker 1: on the olive gardens. But on the other hand, there's

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Speaker 1: a whole new segment of this industry called the restaurant,

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Speaker 1: and Hooters is not the only home that's a thing,

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Speaker 1: that's a real segment. That Well, there's two other incredibly

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Speaker 1: fast growing chains in the restaurant segment. It's Hooters, but

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Speaker 1: it's also Tilted Kilt and Twin Peaks, one of the

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Speaker 1: fastest growing chains in America. Yeah, I thought you were

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Speaker 1: gonna say Wild Wings that does something very similar. So

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Speaker 1: the other two restaurants are Tilted Kilt and Tilted Kilt. Okay,

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Speaker 1: I can't say I heard of that, and Twin Peaks,

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Speaker 1: which you know, you just what are we selling? They're

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Speaker 1: not referring to the television, I got it. That's that's astonishing.

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Speaker 1: My special guest today is Saru J. Rahman, and she

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Speaker 1: is the director at you See Berkeley of the Food

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Speaker 1: Food Labor Research Center and author of Fork to New

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Speaker 1: Standard for American Dining. And let's jump right into the

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Speaker 1: really disgusting, horrifying parts of your book. This quote just

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Speaker 1: took me back on my heels. The CDC reports that

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Speaker 1: as many as of all neuro virus and that's better

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Speaker 1: known as the stomach flu trace back to sick restaurant workers. Now,

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Speaker 1: that is both horrifying and it raises the obvious question.

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Speaker 1: People are coming into work sick handling food. That's all. Well.

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Speaker 1: Workers in this industry nationally do not have a single

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Speaker 1: paid sick day, and two thirds report cooking, preparing and

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Speaker 1: serving our food when they're ellen. We have heard so

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Speaker 1: many stories over the years, workers working with typhoid fever,

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Speaker 1: working workers working with hepatitis. I talk a lot about

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Speaker 1: Olive Garden. You know, Olive Garden got an award from

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Speaker 1: Michelle Obama for being you know, great for kids, healthy

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Speaker 1: for kids because they had cares with the breadsticks. Uh,

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Speaker 1: they serve salad. That's right. Because the same time they

430
00:23:34,000 --> 00:23:37,080
Speaker 1: got the award from Michelle Obama, a worker in a Fayetteville,

431
00:23:37,080 --> 00:23:40,720
Speaker 1: North Carolina restaurant was forced to work with hepatitis A.

432
00:23:41,000 --> 00:23:43,720
Speaker 1: Three thousand people had to get tested by the county

433
00:23:43,880 --> 00:23:47,040
Speaker 1: southed the restaurant, and one class action. That same year,

434
00:23:47,080 --> 00:23:49,720
Speaker 1: there were two neurovirus outbreaks in alive gardens in Indiana

435
00:23:49,760 --> 00:23:53,520
Speaker 1: and Illinois. I mean, it is, it's an epidemic. It is,

436
00:23:53,680 --> 00:23:56,800
Speaker 1: it is a source of epidemics, and it's a public

437
00:23:56,840 --> 00:24:00,800
Speaker 1: health disaster. Now, these restaurants really must not be happy

438
00:24:00,840 --> 00:24:04,119
Speaker 1: with you when you publicize the stuff. But this is

439
00:24:04,160 --> 00:24:07,720
Speaker 1: all This isn't stuff you're digging in the stacks that yeah,

440
00:24:07,760 --> 00:24:12,359
Speaker 1: this is front page, Yeah, public information. CDC also reports

441
00:24:12,640 --> 00:24:15,119
Speaker 1: a good one in ten workers are currently working with

442
00:24:15,200 --> 00:24:19,359
Speaker 1: extreme diarrhea and vomiting, not as opposed to regulate exactly

443
00:24:19,640 --> 00:24:24,879
Speaker 1: on the job jectile exactly healthy in a restaurant and

444
00:24:25,119 --> 00:24:29,560
Speaker 1: so no paid. And if they're sick and they don't

445
00:24:29,560 --> 00:24:32,360
Speaker 1: want to come in, they're told they're fired exactly, and

446
00:24:32,440 --> 00:24:35,560
Speaker 1: even when the managers know they're ill, exactly. And again,

447
00:24:35,600 --> 00:24:38,320
Speaker 1: this whole system of forcing these workers to live for

448
00:24:38,359 --> 00:24:40,520
Speaker 1: the most part off their tips not paying them a

449
00:24:40,560 --> 00:24:43,440
Speaker 1: wage means that the only way to actually get your

450
00:24:43,600 --> 00:24:46,480
Speaker 1: wages is to go to work and work for tips,

451
00:24:46,600 --> 00:24:50,600
Speaker 1: even when you've got hepatitis A. That's unbelievable. All right.

452
00:24:50,640 --> 00:24:53,560
Speaker 1: So let's talk a bit about promotions, which is another

453
00:24:53,640 --> 00:24:57,879
Speaker 1: way you measure different restaurants and how well they treat um,

454
00:24:57,960 --> 00:25:02,520
Speaker 1: how well they treat their employees, what what typically is

455
00:25:02,600 --> 00:25:05,760
Speaker 1: the standard practice and what do you think is the

456
00:25:05,800 --> 00:25:09,480
Speaker 1: preferred or or or standard. There's a myth in this

457
00:25:09,560 --> 00:25:11,679
Speaker 1: industry that you can start as a dishwasher and own

458
00:25:11,760 --> 00:25:15,320
Speaker 1: your own restaurant. Will Sixty of the six or seven

459
00:25:15,359 --> 00:25:18,680
Speaker 1: thousand workers we've surveyed nationally have said they've never received

460
00:25:18,720 --> 00:25:21,359
Speaker 1: a raise or a promotion. And all the turnover in

461
00:25:21,359 --> 00:25:24,200
Speaker 1: this industry isn't actually people going through this industry to

462
00:25:24,320 --> 00:25:27,480
Speaker 1: something else. It's people moving from restaurant to restaurant to restaurant,

463
00:25:27,680 --> 00:25:30,359
Speaker 1: just looking for better opportunities to feed their families. Because

464
00:25:30,359 --> 00:25:32,600
Speaker 1: a lot of these eleven million workers actually take a

465
00:25:32,640 --> 00:25:35,960
Speaker 1: lot of pride in their work. They really enjoy hospitality,

466
00:25:36,000 --> 00:25:37,840
Speaker 1: but they want to move up, and they're generally no

467
00:25:37,960 --> 00:25:40,480
Speaker 1: opportunities to move on. They don't get a promotion internally,

468
00:25:40,560 --> 00:25:42,800
Speaker 1: So if you go to another restaurant acrost the stry,

469
00:25:42,880 --> 00:25:45,320
Speaker 1: maybe you can have a shot at you're applying for

470
00:25:45,480 --> 00:25:47,800
Speaker 1: essentially a better job than what you have exactly, and

471
00:25:48,119 --> 00:25:51,680
Speaker 1: a lot of unfortunately, the lack of mobility is very

472
00:25:51,800 --> 00:25:53,960
Speaker 1: very much due to race and gender. We find that

473
00:25:54,160 --> 00:25:55,960
Speaker 1: people of color are not able to get into the

474
00:25:56,119 --> 00:25:58,240
Speaker 1: very best jobs in the industry, which our server and

475
00:25:58,280 --> 00:26:02,160
Speaker 1: bartending positions and very fine eye restaurants. Women are often

476
00:26:02,200 --> 00:26:04,919
Speaker 1: blocked from those positions. We did what's called matchpair audit

477
00:26:04,960 --> 00:26:07,400
Speaker 1: testing studies where we sent in hundreds of white people

478
00:26:07,440 --> 00:26:09,840
Speaker 1: and people of color, women and men into very fine

479
00:26:09,840 --> 00:26:12,840
Speaker 1: dining restaurants in four cities and found that people of

480
00:26:12,880 --> 00:26:14,960
Speaker 1: color had or white people had twice the chance of

481
00:26:14,960 --> 00:26:16,720
Speaker 1: a person of color, even when the person of colored

482
00:26:16,760 --> 00:26:19,560
Speaker 1: a better resume at getting the best job, and that

483
00:26:19,680 --> 00:26:23,000
Speaker 1: women were often blatantly told we don't hire women here

484
00:26:23,040 --> 00:26:25,919
Speaker 1: if it's a very mind dining restaurant. Yes, even today,

485
00:26:25,920 --> 00:26:30,560
Speaker 1: So I'm naive. And here in Manhattan, you go into

486
00:26:30,600 --> 00:26:35,000
Speaker 1: a restaurant waiters, bartenders, servers, whatever, except for like the

487
00:26:35,080 --> 00:26:37,320
Speaker 1: hundred year old steakhouses where the guys who have been

488
00:26:37,359 --> 00:26:40,760
Speaker 1: working there for fifty years and no one serving food

489
00:26:40,800 --> 00:26:45,240
Speaker 1: is under sixty. Um, it's pretty well integrated here in

490
00:26:45,280 --> 00:26:48,120
Speaker 1: New York City, Or am I looking at things from

491
00:26:48,160 --> 00:26:53,199
Speaker 1: a naive perspective. Unfortunately it's really segregated here in New

492
00:26:53,280 --> 00:26:56,160
Speaker 1: York City, believe it or not. Maybe as the average customer,

493
00:26:56,240 --> 00:26:59,600
Speaker 1: you don't know who's in what position, but most servers

494
00:26:59,640 --> 00:27:02,000
Speaker 1: in very refine dining restaurants in New York City are

495
00:27:02,040 --> 00:27:06,600
Speaker 1: white men. I mean just statistically, yeah. And the finest dining,

496
00:27:06,680 --> 00:27:09,280
Speaker 1: the finer it is. The more you're talking about waiters

497
00:27:09,280 --> 00:27:11,680
Speaker 1: and captains and bartenders and very fine dining. The more

498
00:27:11,720 --> 00:27:13,840
Speaker 1: likely it's going to be white men. Women are not

499
00:27:13,920 --> 00:27:16,040
Speaker 1: allowed to work the very best shifts in these fine

500
00:27:16,080 --> 00:27:18,880
Speaker 1: dining restaurants. People of color have a very hard time

501
00:27:18,920 --> 00:27:22,159
Speaker 1: getting into these jobs just statistically. In fact, there's a

502
00:27:22,240 --> 00:27:25,160
Speaker 1: medium wage differential of four dollars an hour between white

503
00:27:25,160 --> 00:27:26,960
Speaker 1: workers and workers of color. So you'll see people of

504
00:27:27,000 --> 00:27:29,560
Speaker 1: colored on the dining floor, but they'll be bussers and runners.

505
00:27:30,040 --> 00:27:33,000
Speaker 1: They won't be the server who interacts with you. Now

506
00:27:33,040 --> 00:27:37,440
Speaker 1: that I think about it, Um, you're probably right, although

507
00:27:37,480 --> 00:27:41,000
Speaker 1: I'll not mention that some of the funk of your

508
00:27:41,160 --> 00:27:46,879
Speaker 1: bars and and pubs and stuff. It's pretty of yes,

509
00:27:47,000 --> 00:27:49,119
Speaker 1: funk your bars, you tend to make less money and

510
00:27:49,160 --> 00:27:53,200
Speaker 1: tips then you would at a really fine dining good steakhouses.

511
00:27:53,240 --> 00:27:56,720
Speaker 1: The people pulling in five right, and those are largely

512
00:27:56,720 --> 00:27:59,480
Speaker 1: white guys. Um, I will say, there are some who

513
00:27:59,520 --> 00:28:02,120
Speaker 1: do it really well. So Tom Clickio here in New

514
00:28:02,160 --> 00:28:06,359
Speaker 1: York what restaurants he owns all the craft the craft restaurants,

515
00:28:06,520 --> 00:28:10,399
Speaker 1: so Craft Steak, you know, Witchcraft, all these different craft restaurants.

516
00:28:10,560 --> 00:28:12,320
Speaker 1: As you might know, he's also the star of top

517
00:28:12,400 --> 00:28:16,119
Speaker 1: Chef um and he's actually known in this industry for

518
00:28:16,240 --> 00:28:21,119
Speaker 1: really having people of color in all levels management, servers, bartenders. UM.

519
00:28:21,280 --> 00:28:24,359
Speaker 1: Another really fabulous example is Andy Shalal who owns bus

520
00:28:24,359 --> 00:28:27,119
Speaker 1: Boys and Poets and Eatonville, all of this chain of

521
00:28:27,160 --> 00:28:31,439
Speaker 1: restaurants in Washington, d C. Really great restaurants, casual, fine dining,

522
00:28:31,720 --> 00:28:34,239
Speaker 1: people of color, women in all positions. So there are

523
00:28:34,240 --> 00:28:36,680
Speaker 1: some really stand out examples that I provide in the

524
00:28:36,720 --> 00:28:39,960
Speaker 1: book UM in terms of racial diversity. Danny Meyer also

525
00:28:40,000 --> 00:28:41,640
Speaker 1: actually really does it well. He has a lot of

526
00:28:41,640 --> 00:28:43,920
Speaker 1: people of color on the dining floor. So for those

527
00:28:43,920 --> 00:28:46,000
Speaker 1: people who are outside of Manhattan, if you don't know

528
00:28:46,040 --> 00:28:51,040
Speaker 1: Gramercy Tavern or Union Square Cafe, the moderns, shake Shock

529
00:28:51,200 --> 00:28:55,000
Speaker 1: is now taking over the world and UM in New York.

530
00:28:55,000 --> 00:28:57,680
Speaker 1: You go to Brian Park, their lines around the block

531
00:28:58,200 --> 00:29:00,360
Speaker 1: and they seem to be opening up restaurant at a

532
00:29:00,400 --> 00:29:04,680
Speaker 1: fast and furious space. Even his fast food chains. Does

533
00:29:04,720 --> 00:29:08,240
Speaker 1: he maintain that same Oh yeah, shake Shock UM actually

534
00:29:08,280 --> 00:29:11,120
Speaker 1: pays higher than almost any other There are only a

535
00:29:11,160 --> 00:29:14,120
Speaker 1: few chains in and out. Burger on the West coast

536
00:29:14,160 --> 00:29:18,200
Speaker 1: and in Texas is the highest paying chain in the country. Really, uh,

537
00:29:18,240 --> 00:29:21,520
Speaker 1: and then shake Shock. So let's break this down by

538
00:29:21,560 --> 00:29:24,840
Speaker 1: restaurants because I have down a couple of really interesting

539
00:29:25,440 --> 00:29:29,440
Speaker 1: broad restaurant um types, fine dining, Mexican burgers and coffee.

540
00:29:29,720 --> 00:29:33,120
Speaker 1: Since we started with burgers, let's talk about burgers. So

541
00:29:33,480 --> 00:29:38,640
Speaker 1: you mentioned In and Out Burger, right, California staple Um

542
00:29:38,680 --> 00:29:43,120
Speaker 1: and Shake Shock. To me, these are all fast food burgers,

543
00:29:43,160 --> 00:29:47,880
Speaker 1: but these are the two amongst the best quality food burgers.

544
00:29:48,200 --> 00:29:51,080
Speaker 1: You're telling me everything else they do is also that's right.

545
00:29:51,160 --> 00:29:53,600
Speaker 1: I mean In and Out has provided livable wages. I'm

546
00:29:53,600 --> 00:29:57,040
Speaker 1: talking fifteen and all really since the beginning. They provide

547
00:29:57,040 --> 00:30:00,480
Speaker 1: paid sick days, they provide benefits, opportunities for advancement. They've

548
00:30:00,520 --> 00:30:04,080
Speaker 1: just done it differently, and they're growing and they're really successful.

549
00:30:04,160 --> 00:30:06,600
Speaker 1: And come on, nobody could deny that Shake Shack is

550
00:30:06,760 --> 00:30:11,360
Speaker 1: doing really well fantastic paying workers a livable wage. Um.

551
00:30:11,360 --> 00:30:14,000
Speaker 1: Five Guys was the other one that I thought was

552
00:30:14,080 --> 00:30:16,920
Speaker 1: a good burger. I don't know how they're they're staffing, yeah,

553
00:30:16,960 --> 00:30:20,000
Speaker 1: I mean, I think it varies in different regions, but

554
00:30:20,120 --> 00:30:23,120
Speaker 1: we have found several five Guys restaurants that actually want

555
00:30:23,160 --> 00:30:25,400
Speaker 1: to do the right thing, pay a livable wage, provide

556
00:30:25,400 --> 00:30:28,200
Speaker 1: paid sick days. They're a little more varied across the country. Now,

557
00:30:28,200 --> 00:30:30,920
Speaker 1: when we look at the rest of the burger sector,

558
00:30:31,040 --> 00:30:33,760
Speaker 1: everything from McDonald's to Burger King, to Wendy's to all

559
00:30:33,760 --> 00:30:38,640
Speaker 1: the other small ones, really not good uh employers. Well,

560
00:30:38,680 --> 00:30:40,960
Speaker 1: it's not just that they're not good employers. They're actually

561
00:30:41,000 --> 00:30:43,800
Speaker 1: the leaders of the National Restaurant Association. So what's important

562
00:30:43,840 --> 00:30:45,920
Speaker 1: to note about these folks is they don't just follow

563
00:30:45,960 --> 00:30:48,200
Speaker 1: the minimum wage and pay it. They actually set the

564
00:30:48,200 --> 00:30:51,200
Speaker 1: minimum wage. They're in Congress lobbying to keep the wage

565
00:30:51,200 --> 00:30:55,800
Speaker 1: at seven dollars. That's unbelievable. And if you look at

566
00:30:56,400 --> 00:31:00,400
Speaker 1: the structure of you go around different stays and you

567
00:31:00,400 --> 00:31:05,000
Speaker 1: look at who is the highest recipient of medicare medically

568
00:31:05,400 --> 00:31:08,480
Speaker 1: and aid to depend on children exactly depending on the state,

569
00:31:08,520 --> 00:31:13,240
Speaker 1: it's either Walmart, although that's changed, or McDonald's. McDonald's workers

570
00:31:13,360 --> 00:31:17,920
Speaker 1: as a group are a huge subsidized entity to the

571
00:31:17,960 --> 00:31:21,680
Speaker 1: local franchise. It's actually not just McDonald's, this entire industry.

572
00:31:21,720 --> 00:31:24,480
Speaker 1: So we spend seven billion dollars in taxpayer money on

573
00:31:24,520 --> 00:31:28,560
Speaker 1: fast food chain workers public assistance usage and nine point

574
00:31:28,640 --> 00:31:33,240
Speaker 1: five billion dollars on full service restaurant workers public assistance usage.

575
00:31:33,280 --> 00:31:36,240
Speaker 1: I'm talking about Apple, Applebee's and olive garden, and I

576
00:31:36,400 --> 00:31:40,520
Speaker 1: hoped those workers get we're doubly subsidizing those full service

577
00:31:40,560 --> 00:31:44,560
Speaker 1: restaurants because they're multibillion dollar companies. On the one hand,

578
00:31:44,560 --> 00:31:46,760
Speaker 1: we pay their workers wages through our tips because they're

579
00:31:46,760 --> 00:31:50,040
Speaker 1: paying two dollars. On the other hand, we're paying for

580
00:31:50,080 --> 00:31:52,960
Speaker 1: their workers survival through public assistance. So we are doubly

581
00:31:53,040 --> 00:31:56,440
Speaker 1: subsidizing the eye hops and the Applebe's and olive gardens

582
00:31:56,440 --> 00:31:59,520
Speaker 1: of the world, and they're turning over incredible profits. I'm

583
00:31:59,520 --> 00:32:03,720
Speaker 1: always a ended when a profitable public company is subsidized

584
00:32:03,760 --> 00:32:06,960
Speaker 1: by taxpayers. That really gets gets my goat. Let's talk

585
00:32:06,960 --> 00:32:13,440
Speaker 1: about a different group of restaurants. Mexican food, except for Chippotle,

586
00:32:13,840 --> 00:32:16,960
Speaker 1: pretty much terrible across the board in terms of chains. Yeah,

587
00:32:16,960 --> 00:32:20,760
Speaker 1: I mean, there are really fabulous independent Mexican restaurants around

588
00:32:20,760 --> 00:32:23,040
Speaker 1: the country that do it right. Lappa LAPAs one here

589
00:32:23,080 --> 00:32:26,400
Speaker 1: in the city in the village, fantastic Mexican restaurant, provides

590
00:32:26,440 --> 00:32:29,040
Speaker 1: paid sick days. Has been an advocate for higher wages

591
00:32:29,080 --> 00:32:32,800
Speaker 1: for a long time. Um. But among the chains, Chipotle

592
00:32:33,080 --> 00:32:35,440
Speaker 1: does stand out. I mean, all the other chains are

593
00:32:35,520 --> 00:32:38,560
Speaker 1: pretty terrible. UM, and I know Chippotle has been a

594
00:32:38,560 --> 00:32:41,400
Speaker 1: lot in the news for other things lately, but I

595
00:32:41,440 --> 00:32:45,200
Speaker 1: will say that they have been really good about asking

596
00:32:45,240 --> 00:32:47,520
Speaker 1: what can we do better in terms of our workers

597
00:32:47,760 --> 00:32:50,560
Speaker 1: and then actually doing it. So when people want to

598
00:32:50,600 --> 00:32:53,120
Speaker 1: find your sort of research and writing, where's the best

599
00:32:53,120 --> 00:32:55,520
Speaker 1: place for them to look? Go to Forked, the book

600
00:32:55,600 --> 00:32:58,000
Speaker 1: dot com and on that you can actually see a

601
00:32:58,040 --> 00:33:00,840
Speaker 1: website where you can see all the restaurants ratings, how

602
00:33:00,880 --> 00:33:03,400
Speaker 1: people faring on issues of wages, benefits and promotions. You

603
00:33:03,400 --> 00:33:05,680
Speaker 1: can also get the book and see the trailers. That's

604
00:33:05,720 --> 00:33:08,880
Speaker 1: the best place. Thank you, Su for being so generous

605
00:33:08,920 --> 00:33:12,520
Speaker 1: with your time. We've been speaking with Saru Jairamin. She

606
00:33:12,920 --> 00:33:17,160
Speaker 1: is the director of Research Opportunity Center at You See

607
00:33:17,200 --> 00:33:21,120
Speaker 1: Berkeley and author of the book Forked. If you enjoy

608
00:33:21,240 --> 00:33:24,080
Speaker 1: this conversation, be sure and hang around and listen to

609
00:33:24,120 --> 00:33:27,280
Speaker 1: our podcast extras where we keep the tape rolling and

610
00:33:27,360 --> 00:33:31,760
Speaker 1: continue chatting. Be sure and check out my daily column

611
00:33:31,760 --> 00:33:35,080
Speaker 1: on Bloomberg View dot com or follow me on Twitter

612
00:33:35,280 --> 00:33:39,120
Speaker 1: at Ridlts. I'm Barry Rihults. You've been listening to Masters

613
00:33:39,120 --> 00:33:43,680
Speaker 1: in Business on Bloomberg Radio. Welcome to the podcast, Saru.

614
00:33:43,760 --> 00:33:45,520
Speaker 1: Thank you so much for doing this. This has really

615
00:33:45,560 --> 00:33:50,280
Speaker 1: been quite fascinating. Um Before, during the broadcast segment we

616
00:33:50,320 --> 00:33:53,440
Speaker 1: had talked about burgers and Mexican food. One of the

617
00:33:53,440 --> 00:33:56,200
Speaker 1: things I had to ask you. In the book, you

618
00:33:56,320 --> 00:34:00,800
Speaker 1: break down the restaurant industry by segment by segment, I

619
00:34:00,840 --> 00:34:05,320
Speaker 1: was really surprised to see under the coffee segment. Look,

620
00:34:05,360 --> 00:34:09,000
Speaker 1: I expect Duncan Donuts and Tim Horton and Panera to

621
00:34:09,080 --> 00:34:14,719
Speaker 1: be mediocre, but Starbucks has a reputation. They offer healthcare,

622
00:34:14,840 --> 00:34:18,200
Speaker 1: they do four oh one case. I assumed they were

623
00:34:18,200 --> 00:34:20,960
Speaker 1: pretty good. You tell me not so much. Now. They've

624
00:34:21,000 --> 00:34:23,840
Speaker 1: done a really amazing job at promoting the idea that

625
00:34:23,880 --> 00:34:26,560
Speaker 1: they provide all of these things. But they have been

626
00:34:26,680 --> 00:34:29,279
Speaker 1: under so much fire over the last many years from

627
00:34:29,280 --> 00:34:31,839
Speaker 1: workers and journalists have uncovered this as well, that they

628
00:34:31,960 --> 00:34:37,360
Speaker 1: just managed to consistently under provide just two little hours

629
00:34:37,360 --> 00:34:40,080
Speaker 1: for workers to actually get those benefits, and so they

630
00:34:40,120 --> 00:34:43,279
Speaker 1: employ lots of workers at very low wages with very

631
00:34:43,280 --> 00:34:46,600
Speaker 1: little hours less than so far less. Most workers in

632
00:34:46,719 --> 00:34:49,719
Speaker 1: Starbucks get less than twenty hours really, so they're having

633
00:34:49,760 --> 00:34:53,920
Speaker 1: to piece together multiple shifts, multiple jobs, and it's incredibly

634
00:34:53,960 --> 00:34:56,919
Speaker 1: difficult to survive. And and I do recall reading that

635
00:34:56,960 --> 00:35:00,480
Speaker 1: that the shift changes happen really last many That's right.

636
00:35:00,560 --> 00:35:03,000
Speaker 1: If you have to take care of a kid commitments,

637
00:35:03,000 --> 00:35:05,520
Speaker 1: it becomes really challenged, really challenging. And when you're earning

638
00:35:05,560 --> 00:35:08,480
Speaker 1: that little, you know, childcare is like half of your

639
00:35:08,520 --> 00:35:11,640
Speaker 1: income and you can't even get back in time because

640
00:35:11,640 --> 00:35:13,760
Speaker 1: you're asked to stay longer to clean up or whatever,

641
00:35:14,200 --> 00:35:17,280
Speaker 1: and you end up paying more. My perspective is so skewed.

642
00:35:17,320 --> 00:35:19,640
Speaker 1: You go into any Manhattan Starbucks, there are lines out

643
00:35:19,640 --> 00:35:22,200
Speaker 1: the door. You see the same people working all week.

644
00:35:22,320 --> 00:35:24,359
Speaker 1: I see the same faces all the time. But that's

645
00:35:24,360 --> 00:35:25,839
Speaker 1: not how it is in the rest of that's not

646
00:35:25,960 --> 00:35:28,439
Speaker 1: That's not how it is. And even those workers I think,

647
00:35:28,440 --> 00:35:30,840
Speaker 1: you know, Starbucks, for how much they're charging us for coffee,

648
00:35:30,840 --> 00:35:33,800
Speaker 1: could be paying these workers a lot better. But they're

649
00:35:33,840 --> 00:35:36,680
Speaker 1: not well paid and they're just not given enough hours

650
00:35:36,719 --> 00:35:39,719
Speaker 1: to survive. So is it an overstatement to say Starbucks

651
00:35:39,760 --> 00:35:43,680
Speaker 1: is the new McDonald's. Um, it's a new kind of

652
00:35:43,760 --> 00:35:47,840
Speaker 1: McDonald's because McDonald's doesn't make any pretension to being a

653
00:35:47,840 --> 00:35:55,359
Speaker 1: good employer. Starbucks does. But unfortunately still work in any

654
00:35:55,360 --> 00:35:58,680
Speaker 1: fast food restaurants. No, Um, I did a lot of

655
00:35:58,920 --> 00:36:01,719
Speaker 1: No I didn't. I worked in in high school, I

656
00:36:01,760 --> 00:36:05,120
Speaker 1: worked in McDonald's. I started on a Saturday and Sunday

657
00:36:05,160 --> 00:36:07,440
Speaker 1: I gave them the hat night Brendon, I said, you

658
00:36:07,600 --> 00:36:09,759
Speaker 1: keep the paycheck. I'm never coming back here and I'm

659
00:36:09,760 --> 00:36:12,359
Speaker 1: never eating McDonald's again. And that was pretty much I

660
00:36:12,400 --> 00:36:15,280
Speaker 1: think I might have on the road had a burger once,

661
00:36:15,719 --> 00:36:18,040
Speaker 1: but that's pretty much it. Because you didn't like the

662
00:36:18,040 --> 00:36:21,719
Speaker 1: way you were treated. Um. No, you start out with

663
00:36:21,760 --> 00:36:24,320
Speaker 1: a bag of dehydrated onions the size of your fifths,

664
00:36:24,600 --> 00:36:27,840
Speaker 1: and you put it into a pan that's three ft

665
00:36:27,840 --> 00:36:29,600
Speaker 1: by one foot and fill it with water. In the

666
00:36:29,640 --> 00:36:34,840
Speaker 1: next morning there reconstituted onions. And it makes you wonder

667
00:36:35,239 --> 00:36:38,839
Speaker 1: what is the rest of this food like stuff that

668
00:36:38,880 --> 00:36:42,120
Speaker 1: you're eating. And and look, I'm a foodie. I like

669
00:36:42,200 --> 00:36:45,560
Speaker 1: really good restaurants, and I could eat fast food. I

670
00:36:46,200 --> 00:36:50,319
Speaker 1: enjoy you know, shake shock, and you know, of of

671
00:36:50,440 --> 00:36:54,120
Speaker 1: all the fast food before the New Rounds, it was

672
00:36:54,200 --> 00:36:57,680
Speaker 1: Wendy's was much superior to McDonald's and Burger King because

673
00:36:57,719 --> 00:37:02,399
Speaker 1: it was fresh and it felt like food. Yeah. Um,

674
00:37:02,440 --> 00:37:06,239
Speaker 1: but really, anything that's mass produced like that and is

675
00:37:06,280 --> 00:37:09,920
Speaker 1: consistent across the country is really just a food like

676
00:37:10,080 --> 00:37:14,040
Speaker 1: substitute and not actual nutrition and that was the problem

677
00:37:14,040 --> 00:37:15,840
Speaker 1: with that. Yeah, I mean, I think there are folks

678
00:37:15,880 --> 00:37:18,760
Speaker 1: that are managing to get this, get quality to scale

679
00:37:18,840 --> 00:37:21,840
Speaker 1: and good conditions to scale, and so in the coffee world,

680
00:37:21,880 --> 00:37:25,000
Speaker 1: one example is Blue Bottle Coffee. They are but that's

681
00:37:25,040 --> 00:37:28,319
Speaker 1: not a big chain. Is now they're growing really fast. Well,

682
00:37:28,320 --> 00:37:30,880
Speaker 1: there's there in California, They're in New York, they're in Tokyo.

683
00:37:31,280 --> 00:37:35,000
Speaker 1: They're growing really rapidly. Yeah. One, um, I think it's

684
00:37:35,040 --> 00:37:39,479
Speaker 1: just off Broadway and nine. Yeah. Good. It's extremely high

685
00:37:39,520 --> 00:37:42,480
Speaker 1: quality coffee and they pay a livable wage. I'm talking

686
00:37:42,560 --> 00:37:46,520
Speaker 1: closer to fifteen dollars an hour. Really, yeah, that's interesting.

687
00:37:46,600 --> 00:37:51,279
Speaker 1: The the other place we were talking about earlier Chippotle.

688
00:37:52,200 --> 00:37:55,040
Speaker 1: One of the things so we alluded to the problems

689
00:37:55,040 --> 00:37:57,959
Speaker 1: they've had. They had an e coal I break out, which, now,

690
00:37:58,080 --> 00:38:00,360
Speaker 1: by the way, I forgot someone just came out and

691
00:38:00,360 --> 00:38:02,920
Speaker 1: declared it's over. I don't know if we or somebody else,

692
00:38:03,320 --> 00:38:07,359
Speaker 1: but the issue they ran into is specifically because they're

693
00:38:07,400 --> 00:38:11,520
Speaker 1: not sourcing everything to one farm that they could closely monitor.

694
00:38:11,600 --> 00:38:14,440
Speaker 1: It's all local, and that that's was much more challenging

695
00:38:14,560 --> 00:38:17,880
Speaker 1: to how do you stay on top of how people

696
00:38:17,880 --> 00:38:21,400
Speaker 1: are washing their hands in the field at ten thousand

697
00:38:21,440 --> 00:38:24,239
Speaker 1: local farms. Yeah, but it's still it's still the right

698
00:38:24,239 --> 00:38:29,120
Speaker 1: way to actually have locally sourced, sustainable organic food, you know,

699
00:38:29,640 --> 00:38:34,120
Speaker 1: non GMO, right, and it's possible, and they've done They've

700
00:38:34,160 --> 00:38:37,680
Speaker 1: done really well. The the joke I tweeted the other

701
00:38:37,760 --> 00:38:42,040
Speaker 1: day the day of the Powerball lottery was I'm feeling lucky,

702
00:38:42,640 --> 00:38:45,680
Speaker 1: so I'm gonna buy a Powerball lottery ticket and go

703
00:38:45,760 --> 00:38:49,239
Speaker 1: to chippotl and I only I one of them worked

704
00:38:49,239 --> 00:38:52,200
Speaker 1: out and the other one. So it was that what

705
00:38:52,200 --> 00:38:54,400
Speaker 1: what about fine dining? So I was a little bummed

706
00:38:54,440 --> 00:38:57,160
Speaker 1: to see Del Frisco is on your list of bad

707
00:38:57,280 --> 00:39:01,399
Speaker 1: fine dining establishments. That's a great stay cost. But now

708
00:39:01,440 --> 00:39:04,319
Speaker 1: that I think about it, I've never had anyone. I've

709
00:39:04,360 --> 00:39:09,400
Speaker 1: had some women servers, but everybody has been a white person.

710
00:39:09,760 --> 00:39:12,120
Speaker 1: The bart one of the bartenders there is of color,

711
00:39:12,239 --> 00:39:16,600
Speaker 1: but it's a pretty you know, white bread sort of.

712
00:39:16,640 --> 00:39:20,040
Speaker 1: I mean, most of the chain fine dining steakhouses are

713
00:39:20,160 --> 00:39:23,319
Speaker 1: actually leaders in the National Restaurant Association, most of them,

714
00:39:23,840 --> 00:39:26,520
Speaker 1: so they all follow that same what we call low

715
00:39:26,719 --> 00:39:30,040
Speaker 1: road standard. I always forget there a chain because that

716
00:39:30,239 --> 00:39:32,960
Speaker 1: they've they started out as like all the chain started

717
00:39:32,960 --> 00:39:36,120
Speaker 1: as a single steakhouse. And unless you see them pop

718
00:39:36,280 --> 00:39:40,200
Speaker 1: like you see Ruth, Chris and Mortens, they pop up everywhere.

719
00:39:40,560 --> 00:39:42,719
Speaker 1: There's only a handful of Del Frisco. So I don't

720
00:39:42,719 --> 00:39:47,040
Speaker 1: really think of it. What about the other steakhouses like, um,

721
00:39:48,600 --> 00:39:50,880
Speaker 1: I'm just trying to think of what's not a chain.

722
00:39:51,400 --> 00:39:54,520
Speaker 1: Smith and Lanski has always been a Peter Lugers is

723
00:39:54,560 --> 00:39:57,000
Speaker 1: another one. I don't think anyone who's working in Peter

724
00:39:57,080 --> 00:40:00,600
Speaker 1: Lugers is less than a hundred years old. So they

725
00:40:00,160 --> 00:40:05,799
Speaker 1: they were hired before emancipation, right, it's am I right,

726
00:40:05,800 --> 00:40:09,160
Speaker 1: it's a bunch of old white They are professionals, and

727
00:40:09,560 --> 00:40:12,600
Speaker 1: I will say I mean even like a bowtload of money. Yeah,

728
00:40:12,600 --> 00:40:15,480
Speaker 1: and we wish they were more diverse, but they are

729
00:40:15,600 --> 00:40:18,239
Speaker 1: professionals who have a craft and do it really well.

730
00:40:18,320 --> 00:40:21,120
Speaker 1: And that's we want. We want everybody to be valued

731
00:40:21,160 --> 00:40:23,359
Speaker 1: the way they're valued. Right, you know that's the right

732
00:40:23,400 --> 00:40:25,040
Speaker 1: I think that's the real right way to say it.

733
00:40:25,360 --> 00:40:27,360
Speaker 1: So I know we only have you for a limited

734
00:40:27,400 --> 00:40:29,920
Speaker 1: amount of time. You you you have a couple of places

735
00:40:29,960 --> 00:40:32,200
Speaker 1: to run to. Let me go through some of my

736
00:40:32,520 --> 00:40:34,960
Speaker 1: favorite questions that I asked all my guests, and I'll

737
00:40:35,040 --> 00:40:38,000
Speaker 1: do the short version. So, so, who are your early

738
00:40:38,080 --> 00:40:42,359
Speaker 1: mentors who helped you, you know, public policy and yell

739
00:40:42,400 --> 00:40:45,680
Speaker 1: law school. How do you become a restaurant advocate, restaurant

740
00:40:45,680 --> 00:40:51,200
Speaker 1: worker advocate? Oh gosh, um, any professor stand down, anybody

741
00:40:51,239 --> 00:40:53,799
Speaker 1: stand out? Is steering you into this or was it

742
00:40:53,880 --> 00:40:57,799
Speaker 1: just serendipity post nine eleven? I mean, honestly, it was

743
00:40:57,880 --> 00:41:01,200
Speaker 1: my family, who are immigrants from India, and you know

744
00:41:01,320 --> 00:41:07,960
Speaker 1: immigrants are My parents, like most immigrants, are just incredibly resilient, persistent,

745
00:41:08,680 --> 00:41:11,480
Speaker 1: very politically astute, very aware of what was going on

746
00:41:11,520 --> 00:41:14,400
Speaker 1: in angry and for me, it was about turning that

747
00:41:14,480 --> 00:41:17,840
Speaker 1: anger into positive action. And that's what this has been about.

748
00:41:18,200 --> 00:41:20,520
Speaker 1: So you were you were born in Rochester. Did you

749
00:41:21,080 --> 00:41:24,239
Speaker 1: parents migrates to go? Yeah? My parents actually I was

750
00:41:24,280 --> 00:41:26,160
Speaker 1: the first baby born in the United States. They came

751
00:41:26,160 --> 00:41:28,680
Speaker 1: from India, had me in Rochester, and then we moved

752
00:41:28,680 --> 00:41:35,239
Speaker 1: to California, nicer weather, better opportunities. Um. So that's the

753
00:41:35,280 --> 00:41:38,279
Speaker 1: thing is that they've always sought better and better and

754
00:41:38,320 --> 00:41:41,400
Speaker 1: better for their children, and that is the story of

755
00:41:41,440 --> 00:41:43,719
Speaker 1: the immigrants, and for us, that's actually the story of

756
00:41:43,719 --> 00:41:46,600
Speaker 1: this book. Too. It's the high road. It's continuously seeking

757
00:41:46,640 --> 00:41:49,000
Speaker 1: to do better. Someone would some people would say that's

758
00:41:49,040 --> 00:41:52,399
Speaker 1: the story of America is that's immigrants, people constantly looking

759
00:41:52,440 --> 00:41:55,200
Speaker 1: for a better opportunity, that's right for their kids, that's right.

760
00:41:55,440 --> 00:41:58,480
Speaker 1: In the next generation we get lazy and sloppy. We

761
00:41:58,520 --> 00:42:00,919
Speaker 1: don't know how bad it was over there. I'm sure,

762
00:42:01,080 --> 00:42:05,080
Speaker 1: like I heard, I'm sure you've heard stories. Yeah growing up. Um,

763
00:42:05,080 --> 00:42:06,719
Speaker 1: what are some of your favorite books? I don't care

764
00:42:06,760 --> 00:42:10,360
Speaker 1: if it's fiction non fiction. What influenced your thought process

765
00:42:10,440 --> 00:42:14,960
Speaker 1: about this? I mentioned Kitchen Confidential Anthony boor Dane, which

766
00:42:15,000 --> 00:42:18,320
Speaker 1: is both ribald and hilarious. Yeah, I'm Nickel and dimed

767
00:42:18,360 --> 00:42:21,560
Speaker 1: by Barbara Aaron right was really it was the Walmart employer.

768
00:42:21,600 --> 00:42:25,239
Speaker 1: She worked in Walmart, you worked undercover as a waitress,

769
00:42:25,280 --> 00:42:28,719
Speaker 1: actually as a domestic work as a house cleaner. And

770
00:42:28,760 --> 00:42:31,440
Speaker 1: I can't remember what the third low age job she did,

771
00:42:31,480 --> 00:42:34,080
Speaker 1: but um, you know she lived in her car, living

772
00:42:34,120 --> 00:42:38,840
Speaker 1: on these wages. So that was really eye opening. Um. Fiction,

773
00:42:39,160 --> 00:42:41,439
Speaker 1: I love arn that they roy you know a lot

774
00:42:41,440 --> 00:42:45,759
Speaker 1: of books, international books, so real mix of things and um,

775
00:42:45,800 --> 00:42:49,000
Speaker 1: so what do you what do you see changing in

776
00:42:49,040 --> 00:42:52,279
Speaker 1: the restaurant industry, what changes are taking place, and what

777
00:42:52,560 --> 00:42:56,560
Speaker 1: might change going forward. Yeah. So I'm sure everybody's heard

778
00:42:56,560 --> 00:42:58,960
Speaker 1: a lot in the news about Danny Meyer and this

779
00:42:59,040 --> 00:43:02,640
Speaker 1: whole move to limon tipping. And you know, we Danny

780
00:43:02,719 --> 00:43:05,520
Speaker 1: Mar's company had actually been a part of our Association

781
00:43:05,640 --> 00:43:08,719
Speaker 1: of High Road Restaurants for over a decade um, but

782
00:43:08,800 --> 00:43:10,880
Speaker 1: he and I actually hadn't sat down, and when we

783
00:43:10,920 --> 00:43:13,200
Speaker 1: finally did, we told him everything I've talked to you

784
00:43:13,200 --> 00:43:16,200
Speaker 1: about today in terms of this whole history of tipping

785
00:43:16,239 --> 00:43:18,919
Speaker 1: being you know, rooted in slavery, in the tipmenimum wage,

786
00:43:18,960 --> 00:43:21,479
Speaker 1: and impact on women in sexual harassment. And he said,

787
00:43:21,480 --> 00:43:23,560
Speaker 1: you know, I've been thinking about these issues for twenty years.

788
00:43:24,200 --> 00:43:27,239
Speaker 1: Let's think about moving in a different direction. And so

789
00:43:27,280 --> 00:43:29,400
Speaker 1: we worked with them over a series of months and

790
00:43:29,480 --> 00:43:32,520
Speaker 1: they actually, you know, they did it right. They moved

791
00:43:32,600 --> 00:43:35,040
Speaker 1: to eliminate tipping in a way that actually makes their

792
00:43:35,040 --> 00:43:37,600
Speaker 1: workers whole. So they're ensuring that workers are now getting

793
00:43:37,640 --> 00:43:40,080
Speaker 1: everything that they would have gotten in tips now through

794
00:43:40,120 --> 00:43:43,040
Speaker 1: revenue share, now through wages. What's the transition been like

795
00:43:43,120 --> 00:43:46,520
Speaker 1: for the restaurants have have? What do customers say? How

796
00:43:46,600 --> 00:43:48,720
Speaker 1: was it worked out for everybody? I mean everybody seems

797
00:43:48,760 --> 00:43:51,600
Speaker 1: to be really happy. We interviewed workers, we interviewed customers.

798
00:43:51,960 --> 00:43:54,239
Speaker 1: They've done it really well that they had town hall

799
00:43:54,280 --> 00:43:57,560
Speaker 1: meetings with workers and customers and management, and they just

800
00:43:57,680 --> 00:44:00,759
Speaker 1: really had a very inclusive and transparent ass and that's

801
00:44:00,960 --> 00:44:02,759
Speaker 1: how we would want it done. You know, our fight

802
00:44:02,880 --> 00:44:05,600
Speaker 1: is not actually to eliminate tipping. We don't actually advocate

803
00:44:05,600 --> 00:44:08,520
Speaker 1: for that. We're advocating for one fair wage with tips

804
00:44:08,560 --> 00:44:12,080
Speaker 1: on top, as they have in California. But it's really

805
00:44:12,120 --> 00:44:15,080
Speaker 1: to raise the floor exactly and ensure that the employers

806
00:44:15,120 --> 00:44:17,160
Speaker 1: actually paying a full wage and let tips be on

807
00:44:17,280 --> 00:44:20,920
Speaker 1: top of that. But if employers want to go further

808
00:44:21,080 --> 00:44:24,400
Speaker 1: and eliminate tips altogether, we are supportive if they do

809
00:44:24,440 --> 00:44:27,239
Speaker 1: it the way Danny Meyer did, which is inclusive and transparent,

810
00:44:27,320 --> 00:44:30,080
Speaker 1: and ensure that their workers are making everything they would

811
00:44:30,080 --> 00:44:33,200
Speaker 1: have made in tips now through wages. So you work

812
00:44:33,280 --> 00:44:35,840
Speaker 1: with a lot of students, you're you're over you see Berkeley.

813
00:44:35,960 --> 00:44:38,520
Speaker 1: What sort of advice would you give to either a

814
00:44:38,560 --> 00:44:42,279
Speaker 1: millennial or college grad who says, I really want to

815
00:44:42,320 --> 00:44:48,400
Speaker 1: get into the restaurant industry. I would say, um, well, definitely,

816
00:44:48,480 --> 00:44:51,480
Speaker 1: I think, uh stick with it. You know, view it

817
00:44:51,520 --> 00:44:54,880
Speaker 1: as a profession. Um, give it your all and be

818
00:44:55,280 --> 00:44:57,600
Speaker 1: join us and be a part with us of making

819
00:44:57,600 --> 00:45:01,120
Speaker 1: it a better industry for everybody. So definitely focus on

820
00:45:01,160 --> 00:45:04,200
Speaker 1: your career, you know, go all the way. Definitely do

821
00:45:04,280 --> 00:45:06,520
Speaker 1: your thing, but also join us and making it better,

822
00:45:06,640 --> 00:45:09,960
Speaker 1: because only by working with us to professionalize this industry

823
00:45:10,040 --> 00:45:12,799
Speaker 1: will your work in this industry be valued and our

824
00:45:12,840 --> 00:45:16,120
Speaker 1: our final question, what is it that you know about

825
00:45:16,200 --> 00:45:20,279
Speaker 1: the restaurant industry that you wish you knew twenty years ago?

826
00:45:22,880 --> 00:45:26,200
Speaker 1: That question always gives pause. Yeah, you know when I

827
00:45:26,239 --> 00:45:29,120
Speaker 1: when I remember as a law student and right after

828
00:45:29,239 --> 00:45:32,160
Speaker 1: law school being a card carring foodie. I mean I

829
00:45:32,239 --> 00:45:35,319
Speaker 1: lived here in New York City. I ate three times out,

830
00:45:35,760 --> 00:45:38,719
Speaker 1: you know, three times a day out, and I ate

831
00:45:38,760 --> 00:45:42,560
Speaker 1: everything and I was totally oblivious. I cannot remember a

832
00:45:42,600 --> 00:45:45,359
Speaker 1: single worker from all those years of eating out. And

833
00:45:45,400 --> 00:45:48,239
Speaker 1: so now as a diner when I eat out, I

834
00:45:48,280 --> 00:45:51,239
Speaker 1: noticed things. I noticed the racial makeup of the end

835
00:45:51,360 --> 00:45:54,320
Speaker 1: of the restaurant. I noticed how women are being treated.

836
00:45:54,360 --> 00:45:56,960
Speaker 1: I noticed I think about things like paid sick days

837
00:45:56,960 --> 00:45:59,640
Speaker 1: and wages, and I just I think all of us.

838
00:45:59,640 --> 00:46:01,799
Speaker 1: I would I had known this twenty years ago to

839
00:46:01,840 --> 00:46:04,040
Speaker 1: be a different kind of diner, and I would encourage

840
00:46:04,080 --> 00:46:05,960
Speaker 1: all of us to be a different kind of diner,

841
00:46:06,040 --> 00:46:08,440
Speaker 1: to know what's happening in this industry, and to really

842
00:46:08,560 --> 00:46:11,439
Speaker 1: encourage this industry to take the high road. So Ruth,

843
00:46:11,480 --> 00:46:14,080
Speaker 1: thank you so much for being so generous with your time.

844
00:46:14,760 --> 00:46:16,759
Speaker 1: I would be remiss if I did not thank my

845
00:46:16,800 --> 00:46:22,040
Speaker 1: head of research, Mike Batnick, and my recording engineer, Charlie Vohmer.

846
00:46:22,239 --> 00:46:24,680
Speaker 1: If you enjoyed this conversation, be sure and look up

847
00:46:24,800 --> 00:46:27,160
Speaker 1: or down an Inch on iTunes and you could see

848
00:46:27,160 --> 00:46:30,240
Speaker 1: the other eighty eight or so such chats we've had.

849
00:46:30,880 --> 00:46:34,359
Speaker 1: Be sure and check out saw Ru's other writings on

850
00:46:34,520 --> 00:46:38,480
Speaker 1: forked the book dot com. You've been listening to Masters

851
00:46:38,480 --> 00:46:40,360
Speaker 1: in Business on Bloomberg Radio.