Putting higher foodservice worker wages on table
Associations raise concerns for squeezed restaurants, school districts
By Andrew Kitchenman
6/29/2009

The Legislature is considering a bill that could have a major effect on public school foodservice workers’ wages, but restaurant industry advocates warn it also could have a broader impact.

The measure, which was discussed by a state Senate committee recently, would force public bodies and those who operate in public buildings to pay foodservice workers the prevailing wage.

The purpose of such laws is to require that state-funded contracts pay workers the prevailing wage in the area, including both the hourly wage and fringe benefits.

Bill supporters say the proposal would allow foodservice workers to enter the middle class and reduce their dependence on the government for health care and other support. In addition, they contend, mandating paid sick leave would reduce the chance of foodservice workers coming to the job while ill.

Mandating prevailing-wage pay will “allow people to give back in taxes and spending,” aiding the economy, said Kevin Brown, area director for Service Employees International Union Local 32BJ.

Brown was accompanied to the Senate Labor Committee meeting by SEIU member Maritza Palacios, who said a law mandating prevailing wages for state building service workers allowed her to receive health care to treat her cancer. She is a porter at Newark Penn Station.

Lynne Strickland, executive director for the Garden Coalition for Schools, said school districts aren’t opposed to workers earning enough for a stable living situation, but now is not the time for the state to mandate higher wages, as the bill “would incur costs to school districts in an unstable economic environment,” said Strickland, whose coalition represents 115 largely suburban districts.

The New Jersey Association of School Business Officials joined her in opposing the measure, as did the New Jersey Restaurant Association.

“We’re concerned about the unintended consequences,” said Deborah Dowdell, executive director of the restaurant association. Among those concerns: The legislation could affect restaurants located in publicly owned or leased buildings, such as Newark Liberty International Airport or train stations; and raising some foodservice wages would increase pressure throughout the foodservice labor market.

Additionally, businesses could see property tax increases due to higher school costs, Dowdell said. Restaurants typically have profit margins of 3 percent of revenue or less, and some restaurants have recently cut wages to avoid layoffs. If costs increase more, the restaurants couldn’t be profitable, she said.

Representatives of the New Jersey Chamber of Commerce and the New Jersey Business and Industry Association also expressed concern with increasing the number of jobs covered by prevailing wage laws.

Dowdell said she plans to meet with bill sponsor Sen. Fred H. Madden (D-Washington) to discuss her concerns.

Madden said the bill would save the state money by reducing workers’ need for social services — he said the industry has the highest percentage of workers using state-funded NJ FamilyCare health care. He also said there would be a health benefit to having foodservice workers stay home when ill.

Madden said he wanted to start a discussion about the bill, with the goal of having the Legislature vote on it in the fall.

The bill would affect public authorities, but may not make a difference to the New Jersey Sports & Exposition Authority. The foodservice provider at the Meadowlands Sports Complex, Aramark, already has a unionized work force.

E-mail to akitchenman@njbiz.com