Restaurant Opportunities Centers United, an advocacy group defending restaurant workers, recently published a report that paints a rather dark portrait of the restaurant industry.

According to a survey among some 700 restaurant workers in 39 states, female workers are victim or sexual harassment at a much higher rate than their male coworkers – 52 percent versus 44 percent notice weekly incidents making them uncomfortable. It’s even worse when the workers earn a “tipping wage”, i.e. only have a basis wage of $2.13 per hour; the survey shows that workers are twice as likely to be victims of sexual harassment.

These figures are unacceptable. But unfortunately, they are likely to become the new norm with the present state of the economy. Indeed, since 2008 there have been over 105,000 new federal restrictions, i.e. federal rules compelling everyone to do/not to do certain actions. These restrictions cost between $1.75 trillion and $2.03 trillion per year.

In other words, workers in the restaurant industry don’t have many other potential jobs elsewhere because they “cost” too much for the employer. Worse, the ones with an entrepreneurial spirit won’t even be able to create their business because the cost is too high, both in time and in money. For example, the average cosmetologist (hairdressing and other beauty treatments) must first undergo 372 days of training, take two exams and pay about $142 in fees. With bills to pay and children attending school, this is one fewer option of women hoping to improve their situation.

Even fewer options would come about if ROC’s suggestions to “improve” workers’ conditions were adopted. Among others, they want politicians to make a unified minimum wage for all workers and enforce paid sick days.

With respect to the minimum wage, it would appear that ROC ignores that a mandatory minimum wage usually creates higher unemployment. This (simplified) graph of the job market illustrates it:


The red line represents all the workers and the green line represents all the employers. The higher the average wage (vertical axis), the more people want to work (horizontal axis). Inversely, the lower the wage the more employers want to hire people. When governments impose a minimum wage (lilac line), more workers want to work than there are employers ready to hire. As a result, there is an increase in unemployment (the yellow triangle). In fact, this was the very explicit goal of its adoption.

Unemployment and cost also increased when cities like San Francisco mandated paid sick leave (the yellow and black triangle). It can’t be otherwise; unless the paid leaves are voluntary, then the cost for these leaves has to be paid in some way, be it decreased wages, increased prices for customers or even fewer people hired (blue line).

In short, the Restaurant Opportunities Centers diagnosed the symptoms of a larger problem: Economic mobility is reduced in an overly regulated economy. If ROC truly wants to empower workers, they should advocate for fewer government regulations and restrictions so that workers can have more opportunities.

In a world where workers can easily get another job, they have the power to improve their work environment. If they can’t, they know someone else will provide better conditions