Feeding the Economic Recovery: Latinos in the Food Services Sector

Building a New Economy Monthly Latino Employment Report May 2011

Feeding the Economic Recovery Latinos in the Food Services Sector Latino Contributions to Growth in the Food Services Sector Today the Department of Labor issued a report that the U.S. economy only netted 54,000 jobs in May, dashing economists’ expectations of a 200,000-job boost.1 In order to restore the unemployment rate to its prerecession level of 5%, 11 million jobs are needed.2 The industry that added the most jobs last month was food services and drinking places, which includes full-service and fast-food restaurants, caterers, food service contractors, and bars.

Between April and May 2011, food services added 13,600 employees, which maintains its steady growth in recent months.3 The three-month average growth in employment food services was 31,900 jobs per month.4 Making up more than one in five (22%) food services employees, Latinos are likely benefiting from and contributing to growth in this sector.5 In fact, of the ten states that experienced the largest job growth in the food services sector over the last year, eight states—California, Texas, Florida, New York, Illinois, North Carolina, Georgia, and Pennsylvania—also rank among the top ten states with the largest growth in their Latino population in the last decade.6

Employment in Leisure and Hospitality, Net Change by State, April 2010–April 2011

Building a New Economy Monthly Latino Employment Report May 2011

40,000

30,000

20,000

10,000

-10,000

Florida California Texas New York Pennsylvania Massachusetts Ohio Illinois Kentucky Georgia North Carolina Louisiana Nevada Colorado Oregon Arizona Oklahoma Arkansas New Mexico Iowa South Carolina New Hampshire Montana Nebraska Alabama Delaware Washington Tennessee Hawaii Rhode Island Minnesota Alaska Vermont Mississippi Idaho Maine Connecticut North Dakota Maryland Utah West Virginia Indiana Kansas South Dakota Wyoming New Jersey Missouri District of Columbia Michigan Wisconsin Virginia

0

-20,000

Source: U.S. Bureau of Labor Statistics, ―Regional and State Employment and Unemployment—April 2011,‖ news release, May 20, 2011, http://www.bls.gov/news.release/pdf/laus.pdf (accessed May 30, 2011).

Possible Factors Driving Expansion in Food Services The expansion of the food services sector follows the decades-long shift in the American economy away from its manufacturing base to a service-oriented economy. Service-providing industries have been responsible for much of the employment growth since the official end of the economic recession in June 2009. For example, the most recent report from Automatic Data Processing (ADP), which processes payrolls, shows that all of the employment growth in private businesses in May—48,000 jobs—were in service-providing industries, the 17th straight month of growth. By contrast, employment in goods-producing industries fell by 38,000 after six months of growth.7 The resilience of the restaurant industry (which is part of the food services and drinking places sector) is particularly relevant for Latinos, who compose 22.3% of employees in this industry.

The National Restaurant Association’s nationwide survey of restaurant operators offers two

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Building a New Economy Monthly Latino Employment Report May 2011

explanations. The Association’s Industry Tracking System showed that increased sales and customer traffic made April 2011 the fifth consecutive month of healthy growth in the restaurant industry. Comparing April 2010 and April 2011, 52% of restaurant operators reported higher sales and 38% reported an increase in customer traffic.8 In other words, more Americans are eating out and restaurants are benefiting from this increased demand.

The shift toward eating out is a common theme in the larger national conversation about the multiple demands on working families. In a 2009 national survey, 40% of married individuals with children under 18 said that they coordinate daily with their spouse to balance their family’s schedule, duties, and responsibilities.9 Presumably, domestic tasks such as buying groceries and preparing food at home regularly compete for time with other priorities, such as child care, doctors’ appointments, and recreational activities. The recession has exacerbated these pressures, as more workers enter the low-wage labor market, where only 33% of workers have control over their work hours and schedules.10 From the National Restaurant Association’s survey, it is difficult to determine whether the pickup in customer traffic in restaurants translated into gains for restaurant workers. Survey respondents actually reported a slight over-the-year decline in the number of employees and hours worked. Month-to-month labor trends remain promising, however, and are therefore worth tracking.

Concerns about Low-Wage Jobs in Food Services Given the persistently high Latino unemployment rate—11.8% compared to 9% nationally—job growth in the food services sector is a welcome trend. However, not all news is good.

Overshadowing the expansion of this sector is the fact that the food services industry employs a disproportionately large share of low-wage workers. Nationally, food services employ 7.3% of the total workforce but 12.5% of the low-wage workforce.11 Table 1 shows the low wages and incomes in several food services occupations. Latinos are overrepresented in lower-paying occupations, such as cooks.

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Building a New Economy Monthly Latino Employment Report May 2011

Table 1. Employment and Earnings in Food Preparation Occupations, 2010 Occupation First-line supervisors/managers of food preparation and serving workers Waiters and waitresses Cooks, fast food Cooks, restaurant Total, food preparation and serving-related occupations

Employment Total† 773,400

Percent Latino 14.9%

Mean Wages* Hourly Annual $15.28 $31,770

2,244,480 525,350 901,310 11,027,340

16.6% 32.5%§ 32.5% 22.2%

$9.99 $8.91 $11.18 $10.21

‡

$20,790 $18,540 $23,260 $21,240

The focus on low-wage jobs within the food services sector is important because several major problems plague workers in today’s low-wage labor market: Families who rely on poverty-level wages are more financially insecure during spells of unemployment. In a recent Washington Post-Kaiser Family Foundation-Harvard University poll, Latinos were more likely to express anxiety about their job security; 33% of Latinos, compared to 22% of Blacks and 20% of Whites, reported feeling insecure about their jobs.

Low-wage workers are more likely to be uninsured and to be injured or killed on the job.12 Complex employment arrangements, such as subcontracting, franchising, and selfemployment, are becoming more common in low-wage industries. These new ways of organizing work often obscure the distinction of employee and employer, making it difficult to hold employers accountable for complying with wage and hour laws and for ensuring a safe and healthy workplace.13 Lack of access to paid sick days is more prevalent in low-wage industries. In food preparation and serving-related occupations, only 26% of employees are eligible for paid sick days, compared to 62% of all private-sector workers.14 Latinos are especially likely to work without a single paid day for personal or family sick leave; 58% of Latino workers do not have a single paid sick day.15

*

U.S. Bureau of Labor Statistics, ―May 2010 National Occupational Employment and Wage Estimates, United States,‖ Occupational Employment Statistics, http://www.bls.gov/oes/current/oes_nat.htm (accessed May 30, 2011). † Ibid. ‡ NCLR calculation using U.S. Bureau of Labor Statistics, Current Population Survey, 2010 Annual Averages, ftp://ftp.bls.gov/pub/special.requests/lf/aat11.txt (accessed May 30, 2011), Table 11. § The Current Population Survey does not publish data by race and ethnicity that distinguishes between fast food cooks and restaurant cooks.

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Building a New Economy Monthly Latino Employment Report May 2011

In an effort to shed light on the vulnerability of workers in the low-wage labor market, NCLR published a collection of stories told by Latino workers called We Needed the Work: Latino Worker Voices in the New Economy. Together, these accounts are a call to action for policymakers to address the widespread exploitation of workers in low-wage industries and build a more sustainable economic recovery.

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Building a New Economy Monthly Latino Employment Report May 2011

Endnotes 1

U.S. Bureau of Labor Statistics, ―The Employment Situation—May 2011,‖ news release, June 3, 2011, http://www.bls.gov/news.release/empsit.nr0.htm (accessed June 3, 2011).

2 Economic Policy Institute, ―Recession Has Left in Its Wake a Jobs Shortfall of Over 11 Million,‖ The State of Working America (Washington, DC: Economic Policy Institute, 2011), http://www.stateofworkingamerica.org/charts/view/7 (accessed May 6, 2011).

3 U.S. Bureau of Labor Statistics, ―The Employment Situation—May 2011.

4 U.S. Bureau of Labor Statistics, Current Establishment Survey, ―Table 2. Detailed industry employment ranked by change between April and May 2011, and prior 3-month average change, in thousands, seasonally adjusted,‖ ftp://ftp.bls.gov/pub/suppl/empsit.tab2.txt (accessed June 3, 2011).

5 U.S. Bureau of Labor Statistics, Current Population Survey, 2010 Annual Averages, ftp://ftp.bls.gov/pub/special.requests/lf/aat18.txt (accessed March 30, 2011), Table 18.

6 NCLR calculation using U.S. Census Bureau, ―American FactFinder,‖ 2000 and 2010 Decennial Census, http://factfinder2.census.gov/faces/nav/jsf/pages/index.xhtml (accessed March 2011).

7 Automatic Data Processing, Inc., May 2011 ADP National Employment Report® (Automatic Data Processing, Inc., 2011), http://adpemploymentreport.com/pdf/FINAL_Report_May_11.pdf (accessed June 1, 2011).

8 National Restaurant Association, Restaurant Performance Index (Washington, DC: National Restaurant Association, April 2011), http://www.restaurant.org/pdfs/research/index/201104.pdf (accessed June 1, 2011).

9 Rockefeller Foundation and TIME Magazine, ―A Woman’s Nation Survey,‖ September 2009, http://www.srbi.com/4788_Formatted.pdf (accessed May 30, 2011).

10 James T. Bond and Ellen Galinsky, What Workplace Flexibility is Available to Entry-Level, Hourly Employees? (New York: Families and Work Institute, 2006).

11 NCLR calculation using U.S. Bureau of Labor Statistics, ―The Employment Situation – May 2011,‖ Table B-1; and Paul Osterman, ―Improving the Quality of Low-Wage Work: The Current American Experience,‖ International Labour Review 147 (2008): 115–134.

12 Catherine Singley, Fractures in the Foundation: The Latino Worker’s Experience in an Era of Declining Job Quality (Washington, DC: National Council of La Raza, 2009), www.nclr.org/fractures (accessed April 28, 2011).

13 David Weil et al., Improving Workplace Conditions through Strategic Enforcement: A Report to the Wage and Hour Division (Boston: Boston University, 2010), http://www.dol.gov/whd/resources/strategicEnforcement.pdf (accessed April 28, 2011).

14 Claudia Williams, Robert Drago, and Kevin Miller, 44 Million U.S. Workers Lacked Paid Sick Days in 2010: 77 Percent of Food Service Workers Lacked Access (Washington, DC: Institute for Women’s Policy Research, 2011), http://www.iwpr.org/publications/pubs/44-million-u.s.-workers-lacked-paid-sickdays-in-2010-77-percent-of-food-service-workers-lacked-access (accessed May 30, 2011).

15 National Partnership for Women and Families, Latino Workers and Their Families Need Paid Sick Days (Washington, DC: National Partnership for Women and Families, 2011), http://paidsickdays.nationalpartnership.org/site/DocServer/W_F_Latinos_and_PSD_Fact_Sheet_FINAL_4 .7.11.pdf?docID=8544 (accessed May 30, 2011).

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