The growth of the service industry is just one more sign that the middle class is disappearing.
Do you work in a restaurant? Do you know someone who does? Chances are the answer is yes, because one tenth of the American labor force now works in the food service industry. And the economics of restaurants points to a disheartening trend in the lives of American workers.
Yesterday, the Wall Street Journal released a bevy of hiring numbers, and most of them are pretty grim. But the food service industry is one sector of the economy that's actually growing. It has added more than 216,000 jobs since December 2009. Its job numbers grew 2.1 percent last year, more than twice the national average. More than 9.3 million Americans work in restaurants—about one in every 10 employed. Jonathan Hogstad, national research coordinator of Restaurant Opportunities Centers United, estimates that when you account for workers in restaurants categorized in other industries such as amusement parks, performance venues, and sports stadiums, food service employs as many as 10.3 million people.
"Even before the crisis, it's been one of the fastest growing industries," Hogstad told me. "In most cities, restaurants didn't even take a hit during the recession, and if they did, they recovered much more quickly than in other sectors."
More and more people have been eating out over the last few decades for a variety of social reasons, Hogstad says. "Household labor is commodified when women join the workforce," he adds. "More people are working and have less time to cook. Foodie culture has exploded."
But so has fast food. As the Wall Street Journal notes, many quick-serve restaurants that pay piddling wages are hiring at a rapid rate. McDonald's alone added 62,000 jobs on one national hiring day in April. But limited service restaurants like McDonald's aren't the only ones hiring. In fact, according to the U.S. Bureau of Labor Statistics, 4.5 million people work in full-service restaurants, which is 400,000 more people than those who work in limited service. Hogstad says the fine dining industry is thriving.
These twin boosts in the fine dining and fast food industries underscore the widening of the wage gap in the United States. The unique socioeconomics of big cities is the driving force behind the growing gap between rich and poor. So it makes sense that cities, which host more upscale, full-service restaurants than rural areas, still have a steady group of restaurant-goers with money to spend. Big cities also host a higher population of poor and working class people. Tipped employees in those restaurants, like waiters and bussers, are essentially making a commission off the patrons' wealth. But they're not necessarily making much else.
"Back in the '60s, so much of the working class was employed in factories," says Hogstad. "The jobs we've seen taking their place have been service sector jobs that don't have labor protections. Only ten percent of workers get paid sick days and 90 percent don't get health insurance from their employers."
Many people start working in restaurants as a stepping stone to another career—or at least that's their hope. But more and more workers are finding themselves becoming career waiters (and not just ones who work in upscale restaurants, as the term usually connotes).
"Some people love it," says Hogstad. "But the fact is, most of these jobs are replacing work that used to be better."