A New Direction for Restaurant Workers? Zingerman’s and the “Thriveable Wage”


The wage crisis among restaurant workers has gained attention in recent weeks, reminding the public that federal minimum wage for restaurant workers is currently $2.13 per hour even while the federal minimum wage for most other sectors is $7.25 per hour. According to Saru Jayaraman, Director of the Food and Labor Research Center, low wages for restaurant workers is the biggest legacy of former Republican presidential candidate Herman Cain, who served as head of the National Restaurant Association (NRA). The NRA, one of the most powerful lobbies in the United States, worked hard during Cain’s tenure to keep the cost of labor low in its sector. Jayaraman also points out that women constitute at least half of people in the restaurant sector.

In light of the industry’s powerful lobbying to keep wages low, it is rare to find restaurants—or corporations generally—driven by a desire to improve their employees’ overall living wage and wellness, rather than how the market can make them richer. Enter Zingerman’s Community of Businesses (Zingerman’s), made up of 18 partners and several different enterprises including a restaurant called Zingerman’s Roadhouse. Based in Michigan, Zingerman’s partners are known for having built their enterprises based on how they can “enhance the lives of as many people as [they] possibly can.”

In practice this means offering all their employees—part time and full time—health and dental benefits, and paid time off. After they work at Zingerman’s for a year, employees are eligible for 401(k)s.

Tabitha Mason, who built her career in the restaurant industry, is the manager of Zingerman’s Roadhouse. “Early in my career at a different restaurant, I probably made $20,000 per year. That was a more traditional restaurant, where servers were viewed as disposable,” Mason told RH Reality Check. “And previous restaurants I worked at would try hard to restrict who could receive benefits—like it was an exclusive club.”

While Zingerman’s Roadhouse pays its staff just a smidge over the federal restaurant workers’ minimum wage, their staff earn $21 per hour. Management monitors tips to ensure this, according to Mason.

And last year, Zingerman’s partners began cultivating a new dimension of their focus on employee-centered business:  the concept of a “thriveable wage.” We’ve heard of the minimum wage, described above, which offers a floor for what a worker can legally earn in a given sector. And we’ve heard of a “living wage,” which ensures a worker can earn what is necessary to survive.

Moving to a “thriveable wage” is part of Zingerman’s deeper commitment to their worker and an understanding that, as an employer, they’re part of a larger ecosystem of workers, their families, and their communities, not just partners and shareholders. At a retreat last year, Zingerman’s partners began toying with the concept of a thriveable wage, drafting a vision statement that includes the following:

We [are raising] wages to a “thrive-able” level throughout the organization and there is a powerful multiplier effect going on. Higher wages lead to higher morale and is the engine that keeps everything spiraling upward. In many cases, productivity increases due to lowered stress levels in the lives of the people in our organization because of assurance that their financial needs are covered….We have less people needing to rely on forms of public assistance like SNAP card benefits and the Washtenaw Health Plan. We maintain the offering of assistance from our Community Chest because it serves as the safety net for employees without personal networks of support or who face disastrous emergencies outside of their control.

The thriveable wage vision statement, still in draft form, cites lower employee attrition as a result of higher wages. It also includes plans to move in a “books wide open” direction, enabling employees to help define what a thriveable wage actually means in practice, and promising transparency in pay scales and wage information. “Just as an ideal democracy does the work of teaching everyone how to vote responsibly, we as a business give to all our members an understanding of finance as a fundamental tool,” says the draft vision statement.

Zingermans’s ethos seems to be in stark opposition to the restaurant lobby and most corporate lobbies. Paul Saginaw, one of the original two Zingerman’s founders, can’t wrap his brain around why corporate lobbies are motivated primarily by profit. “Maybe there’s limits to generosity but probably no limit to greed,” he told RH Reality Check. “All I know is we created our businesses intentionally based on what we wanted to be, and the life we wanted to live.”

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  • jruwaldt

    This is great. They make more per hour than I do as a librarian. I think there’s a minor error at the beginning of the article. I don’t think the Federal minimum wage of $2.13 and hour applies to all restaurant workers. Rather, I believe it only applies to servers and others who receive tips. Crew who don’t receive tips are paid the usual $7.25 an hour. This whole situation is still wrong, and some states with their own minimum wages require servers to be paid the state minimum wage plus tips.

    • http://www.facebook.com/donaldw Donald Wilson

      Actually: Many DO work full time and get benefits, and all the part timers get benefits too (and the benefits package is pretty good, to be honest)

  • http://www.facebook.com/rob.kruise Rob Kruise

    How can we affect the bigger corporations to follow this example? Currently working for Wal-Mart and They definitely need to get this picture!

  • Emily Springfield

    This is curious, given that my brother was offered a cooking job at the Roadhouse and was offered $8/hr. When he said he was making $12.25/hr + benefits at a local chain, the interviewer blinked and said “Our managers only make $12/hr.” Do the excellent wages only apply to servers?

    • Bluetonguelizard

      Curious indeed Emily, when I worked there one of the owners laughed in my face when I said my husband (who also worked there at the time) and I were looking to buy a house in Ann Arbor and pretty much said “on the wage we pay you you can’t afford to live in this town”. My hope is that they have progressed from this viewpoint. The Z is also most famous for it’s marketing.

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  • Erica_JS

    This is great, but I wonder how it would translate to a business that doesn’t charge $15 for a sandwich. (Not trying to insult Zingerman’s, just acknowledging it is the very top end of the market. How feasible would this approach be for a more “everyday” restaurant?)

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  • disqus_Ip1khcwvbs

    Your assessment is so completely flawed I don’t know where to begin – you’re blaming Herman Cain and his lobby? If a restaurant wants to pay more than $2.13 they are always welcome to do so – example Zingerman’s. And, good for Zingerman’s. Hopefully, it will set them further apart from the competition.

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  • rubyread

    I believe that the reason the min wage for servers hasn’t been raised is because of the FICA tip credit that businesses and/or business owners receive for the FICA tax paid on tips received in excess of the minimum wage (actually, it is for excess over $5.15 per hour, which is crazy since minimum wage is now $7.25). This is a hefty CREDIT, which means dollar for dollar reduction in the amount of tax owed by the business and/or business owner. Again, the wealthy benefit from the meager wages of the poor.