Guaranteed Basic Income Could Be a Game-Changer for Restaurant Workers

This story was originally published on Civil Eats.

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Sukhi Samra grew up with a mother who worked up to 80 hours per week to support three children and a husband with a disability. None of her three jobs paid her well enough to make ends meet in Fresno, California, in the late 2000s. So she juggled work as a housecleaner with shifts at a Subway restaurant and a gas station convenience store, and still struggled financially.

Samra said receiving just $500 in additional income a month would have reduced her mother’s workload and stress load, she said. Instead, the food worker developed hypertension, arthritis, depression, and anxiety before dying suddenly in June after 25 years of low-wage labor.

“In the richest country in the world, one job should be more than enough to make sure that you’re able to keep the lights on and feed your children, but that wasn’t the case for her,” said Samra, director of the Stockton Economic Empowerment Demonstration (SEED) project and Mayors for a Guaranteed Income. Both programs were founded in 2020 by former Stockton, California Mayor, Michael Tubbs, and they’re both on a mission to provide low-wage earners, a category that disproportionately includes food workers, with a guaranteed income.

The idea is rapidly gaining traction nationwide. While universal basic income (UBI) initiatives provide no-strings-attached cash payments to all community members whether or not they are economically disadvantaged, guaranteed income projects like SEED aim to reduce income inequality by specifically giving “free money” to financially fragile constituents.

“Guaranteed income is a targeted policy solution to address racial and gender disparities in income insecurity,” Samra said. “Also, guaranteed income comes in a little bit cheaper than universal basic income just by virtue of the fact that you’re not serving the same number of people.”

In recent years, several cities have begun offering a guaranteed income to small groups of economically disadvantaged residents, and a number of others — including Los Angeles — are considering doing so. In February 2019, the SEED project launched a two-year guaranteed income program in Stockton, a racially diverse city of 300,000 on the eastern edge of the Bay Area that has been working to rebound from bankruptcy since 2008. The program provided a $500 monthly allotment to 125 randomly chosen residents in neighborhoods where earnings fall at or below the city’s median household income.

Recently released data from the program’s first year indicates that receiving a guaranteed income allowed participants to pay down their debts, cover unexpected expenses, and improve their mental health. In addition, full-time employment among these residents rose by 12 percent, a finding that flies in the face of the notion that free money disincentivizes low-income people from working. The success of Stockton’s program inspired other California cities, including San Francisco, Oakland, and Compton, to follow suit. Nationwide, Richmond, Virginia; Saint Paul, Minnesota; Pittsburgh, Pennsylvania; and the Massachusetts cities of Chelsea and Cambridge have all adopted guaranteed income programs.

While most of these initiatives focus on low-income families, San Francisco’s program stands out in that it will funnel $1,000 to 130 struggling artists for six months starting in May. This could pave the way for other municipalities to target economically specific groups of disadvantaged workers. The effort is being watched closely by food workers’ advocates, who say that monthly cash payments could offer those workers the financial stability to live in dignity.

Madeline Neighly, director of guaranteed income at the Economic Security Project, a funder and partner of SEED, pointed out that many foodservice workers don’t earn a living wage. The Raise the Wage Act of 2021, introduced to the U.S. Senate in January, would increase the federal minimum wage to $15 per hour by June 2025, but has faced pushback from industry groups such as the National Restaurant Association. The proposal also suffered a blow when the Senate opted against including minimum wage legislation in President Joe Biden’s $1.9 trillion COVID-19 stimulus plan.

“We’ve learned a lot over the past year about the ways we rely so heavily on foodservice workers — from the people who pick our food to the people who deliver it and prepare it to everybody in between,” Neighly said. “So, a demonstration that shows how guaranteed income can level some of the economic shocks for those individuals seems like a great idea.”

Fighting to earn a living wage, relying on tips to survive, facing sexual harassment, and often getting paid under the table because of their immigration status, food workers are among the nation’s most exploited group of workers, advocates say. A guaranteed income could be just what many need to transition out of poverty and work in settings where they’re treated with respect.

The Case for a Guaranteed Food Worker Income

Food workers are significantly more likely to live below the poverty line than other workers. Roughly 30 percent of farmworker families live in poverty, as do 16.7 percent of restaurant workers. About 43 percent of restaurant workers earn twice the official poverty level, which suggests that they are barely making ends meet. Overrepresented in low-paying restaurant jobs — cashiers, counter attendants, dishwashers, or cooks — food workers of color, especially women, are among those most prone to poverty. In addition, more than half of the people working for supermarkets and big box stores earn poverty-level wages.

The COVID-19 pandemic only worsened economic conditions for restaurant workers, with nearly 400,000 restaurant jobs lost in December alone. Overall, the coronavirus resulted in the restaurant industry losing almost 2.5 million jobs. Tipped workers were acutely impacted, according to Sekou Siby, president and CEO of Restaurant Opportunities Centers (ROC) United. “It is not a wage,” he said of tips. “It’s a gratuity.”

Because restaurant staff typically worked fewer hours last year, their tips went down proportionally. That is one reason why ROC has been advocating for restaurant workers to earn a federal living wage of at least $15, but Siby said that a guaranteed income could also help. “We should provide targeted outreach toward families still working full-time but not making enough to [get by].”

A guaranteed income could provide some much-needed economic stability to restaurant workers whose wages have fluctuated or stopped entirely over the past year, Neighly said. As restaurants open up to full capacity, she added, it will take time for workers to resume earning their pre-pandemic wages, even if those wages were meager. A guaranteed income could also empower workers in other ways.

According to a recent study from the living-wage advocacy nonprofit One Fair Wage, more than 40 percent of restaurant workers reported “a noticeable change in the frequency of unwanted sexualized comments from customers” during the pandemic. Because they rely on tips, many of these workers feel they have no choice but to endure sexual harassment in the workplace.

Similarly, 58 percent workers said they hesitated to enforce COVID-19 protocols for fear that they would receive smaller tips. In fact, 67 percent of workers said they got unusually small tips after enforcing these protocols.

A guaranteed income would make restaurant workers less dependent on tips. “Cash is freedom, and it’s the freedom to walk away from a situation that’s unsafe,” Neighly said. “It’s the freedom to make decisions about your career that are best for you and your family.” A demonstration focused on food workers would allow researchers and advocates, “to show the power that workers have when they have economic stability to call for better working conditions,” she added.

In addition to leaving unsafe work environments, participants in the Stockton program reported that they left abusive partners and did not have to rely on financial help from family members with whom they had strained relationships, Samra noted. So, a guaranteed income, “really allows you to shift to situations that you choose to be in,” she said. “It’s giving people their agency back.”

Jose Oliva, campaigns director for HEAL Food Alliance, said a basic income would be “hugely beneficial” to farmworkers. He argues that they are among the most vulnerable, particularly because they work seasonally and perform grueling labor. But he also said such an income would help food workers employed in transportation, logistics, and warehousing roles, since automation and mechanization are increasingly threatening their job security. Their job protections also depend on whether or not they belong to a union. He suspects that a basic income could lead employers to improve the wages and conditions they offer to workers, who would have more leverage.

For this shift to occur, Oliva said, immigration reform is a must. Without it, employers can pay undocumented workers low wages and avoid making substantive changes. But at present, restaurants are struggling to find enough workers as business picks up and more than half of U.S. adults have received the COVID-19 vaccine.

Some experts blame this problem on food workers leaving the industry when restaurants limited their hours of operation during the pandemic. And, in many cases, the alternative work they landed provided higher pay and more job security than their food industry positions did. Others attribute the trend to these workers collecting unemployment benefits and stimulus payments that collectively amount to a higher sum than their restaurant wages did. In any case, the food industry might have to do more to cater to workers to lure them back.

The inaugural SEED study found that a guaranteed income isn’t likely to stop the public from working — but it did give them the resources to explore their options. “People had a lot more brain space and mental capacity to set goals for themselves and envision a different future,” Samra said. “So, you combine the mental capacity with the tangible ability to take the day off from work — as we know a lot of [low-wage] jobs don’t come with paid time off — and people were taking days off to go to interviews, whereas that just wasn’t possible before.”

Addressing the Critics

Although Stockton’s project saw positive results, guaranteed and basic income programs still face opposition. Critics argue that they would do very little to decrease income inequality. Rather, they say the programs could cause inflation and taxes to increase, landlords to raise rent, and people to lose the will to work. In response to Los Angeles Mayor Eric Garcetti’s recent proposal of a $24 million “basic income guaranteed” pilot program, Jon Coupal, the president of the anti-tax Howard Jarvis Taxpayers Association, told the Los Angeles Times that government initiatives that “give away free money” minimize the importance of hard work and being “a productive member of society.”

Samra said these messages are rooted in damaging stereotypes related to race, gender, and class. They play on stereotypes that suggest “poor people are poor because of their own choices, and that if you give people money, they will spend it on drugs and alcohol or they will stop working,” she said. “None of the data bears out in that way. For us, it was really important to reverse the pattern of not trusting families who are experiencing economic insecurity and show that they’re just like the rest of us. When they’re given $500 a month, they spend it to better take care of themselves and their families.”

Samra also disputed the idea that “free money” would stop people from working, since $500 or $1,000 is not a large enough monthly sum to meet cost-of-living needs. As for the idea that a guaranteed or basic income might depress wages, rather than raise them, Samra said that such initiatives should not exist in a vacuum. A number of policies should be put in place to reduce income inequality and improve living standards — from tenant protections to a living wage.

“These policies are not in competition, and, in fact, they work best in tandem: [workers need] a living wage and guaranteed income,” Neighly said.

The Stockton program not only garnered attention for distributing “free money” but also because it didn’t require participants to take drug tests or spend their cash in a certain way. Compare this to the Supplemental Nutrition Assistance Program (SNAP), which restricts what recipients’ purchases, most notably prohibiting hot foods. Moreover, some states have tried to bar recipients from purchasing unhealthy foods, such as candy or sweetened beverages, with SNAP benefits.

Samra said it was important to give Stockton’s guaranteed income recipients autonomy because no government program or policymaker can predict families’ individual needs on a month-to-month basis. In May, they might use the money to pay for a car repair, and in June, they might spend the money entirely on food.

“Cash is something that allows freedom and choice,” Neighly said. “By showing how [guaranteed income programs] work in different communities, we’re seeing how something can be universal in its solution, even though each family, each community, each individual, interacts with it differently.”

• The Rise of Guaranteed Income Programs Could Offer a Lifeline for Food Workers [Civil Eats]