A Tale of Two Restaurant Industries
- Feb 18, 2025
- 1 min read
Updated: Mar 28, 2025
The restaurant industry has been in chaos since the onset of the COVID-19 pandemic. Numer-
ous studies have documented that the sector’s chronic low wages, reliance on ever-decreasing tips, sexual harassment, and worker treatment during COVID resulted in workers fleeing the industry en masse.
In numerous reports, One Fair Wage has documented that restaurant workers and establishments in the 43 states that allow employers to pay tipped workers a subminimum wage — hereafter referred to as subminimum wage states — experience lower wages, restaurant establishment growth rates, and restaurant employment growth rates.
Even tipping has been found to be higher in the 7 states that require all employees to be paid a full minimum wage with tips on top — hereafter referred to as fair wage states (CA, OR, WA, NV, MN, MT, and AK); USA Today reported that the top state for tips is fair wage California.4
This report adds to this growing body of evidence, documenting the different experiences in the restaurant industry’s recovery post-COVID between the 7 fair wage states and the 43 that allow a subminimum wage for tipped workers.
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The challenges faced by restaurant workers during the pandemic highlight the urgent need for reform in wage practices. For a different perspective on worker treatment, check out this trees hate you demo.
A powerful and eye-opening report that blows away the myth that fair wages hurt business! This UC Berkeley research clearly shows that the 7 fair wage states (including California, Washington, Oregon) are outperforming the 43 subminimum wage states in restaurant establishment growth, employment, AND wages. Not only do workers in fair wage states earn $3,185 more annually, but tips are actually HIGHER too—debunking the outdated argument that customers won't tip if wages go up. The data speaks for itself: paying workers a living wage isn't just the right thing to do—it's also better for business. A must-read for anyone fighting for fair wages in the restaurant industry! --trig
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