Why Bay Area restaurants have the worst ethnic, racial income gap in the country

Tessa Love
San Francisco Business Times
July 15, 2016

Restaurant workers in the Bay Area are some of the highest-paid hospitality workers in the country. But not everyone working in the industry is getting a piece of the pie.

A recent study found that Bay Area restaurant workers of color are paid an average of $6 less per hour than white workers. That's the highest pay disparity based on ethnic and racial difference in this industry nationwide.

Though white workers account for just 26 percent of all restaurant staff, they disproportionately make up 36 percent of the higher-paying front-of-the-house positions, such as bartenders and servers, and only 19 percent of back-of-the-house positions, like cooks and dishwashers.

The report was conducted by the Restaurant Opportunities Center of the Bay Area and funded by the Ford Foundation, Rosenberg Foundation and more, and drew from worker surveys, interviews with employers and staff as well as industry and government data.

The restaurant industry is a huge economic force in the Bay Area. With more than 177,807 workers in 10,618 establishments, the industry now accounts for 9.5 percent of the local economy and generates over $10 billion a year in revenue. And the Bay Area's minimum wage is some of the highest in the country -- San Francisco now pays $13 an hour and will work towards $15 by 2018. But it’s not enough to keep all workers paid evenly.

“As a country, we struggle with racial and gender bias, so no industry is immune to this,” said Gwyneth Borden, executive director of the Golden Gate Restaurant Association (GGRA). “However, the San Francisco Bay Area restaurant industry represents one of the most diverse restaurant industries in the country with the best-paid workers.”

While restaurant staffs in the Bay Area are diverse, they are overwhelmingly segregated.

Though white workers account for just 26 percent of all restaurant staff, they disproportionately make up 36 percent of the higher-paying front-of-the-house positions, such as bartenders and servers, and only 19 percent of back-of-the-house positions, like cooks and dishwashers.

This segregation is a huge contributing factor to the pay disparity — front-of-the-house positions are generally tipped ones, while back-of-house positions traditionally are not. Workers in tipped positions tend to make more money.

The tipping issue has been a prominent one in this industry for a while, prompting some restaurant owners to do away with tips altogether, or share tips between the front of the house and back to close the pay gap. But the study found that only 56.8 percent of back-of-the-house workers in the Bay Area reported receiving supplemental income from tips. Those that did, however, earned almost 50 percent more than back-of-the-house workers who did not receive tips.

Even discounting the difference in positions, the report found that in the fine dining sector, white workers made an average of $22.44 an hour while workers of color made $16.32, front of the house or back.

The report points to a lack of formalized hiring, training and promotion practices as one reason for the continued segregation in the industry, a 

point Borden echoed and said the GGRA is working to fix.

The "GGRA provides education in these areas to ensure that restaurants have the tools they need to be great employers, and we will continue to do so,” she said.

In addition to the race-based pay gap, the report found that women earn an average of $3 less an hour than men. Also, eleven percent of workers reported earning less than the minimum wage, 25 percent reported working off the clock without pay in the past 12 months, and only 27 percent reported having access to paid sick days.

On top of that, the report took into account the cost of living in the Bay Area and found that in order to afford rent, a worker would need an hourly wage of $30.48 in Oakland and $39.65 in San Francisco. Only 5 percent of respondents reported making that amount.