Wages and economics of immigrant restaurant workers: a case study

The Washington Post profiled the Oval Room Restaurant, on Connecticut Avenue. The writers follow the economic trail of Walter Velasquez, a 40 year old Salvadorean waiter. He came to America illegally; now his eldest child, 17, aspires to become an immigration lawyer. The Post article touches on his household finances, the public’s cost of uninsured healthcare and educating children, and the economics of the restaurant industry.
“The sous-chef, a Panamanian immigrant, directed two cooks from El Salvador, one from Guatemala and one from Honduras. A Salvadoran immigrant ran the food to the tables. All the activity was monitored by the general manager, an Austrian by birth, who needs to satisfy the owner, originally from India. “We would not exist without immigrant labor,” said Ashok Bajaj, owner of the restaurant. “If the laws change, the entire economics of the restaurant industry would change, too.”

Bajaj, a New Delhi native who moved here from London in 1988, was willing to invest a million dollars here because of the availability of labor at attractive prices. His dishwashers make about $10 an hour, line cooks about $14 an hour, and sous-chefs $20 or so. About 70 percent of the restaurant’s employees were born outside the United States; overall in the Washington region, about 45 percent of food-service workers are immigrants, according to an analysis of federal data by the Pew Hispanic Center.

[The] household finances of [Walter Velasquez], a Salvadorean waiter at the Oval and his restaurant-working girlfriend] show how immigrants support the U.S. economy — but also incur costs for public services. He makes about $30,000 a year. Avila, who works fewer hours, earns about $18,000. They pay $1,300 a month in rent and pay Comcast $140 a month for cable television and high-speed Internet service. Comcast has added more than 30 foreign-language channels in the past eight years. The couple spends $150 a week on groceries, much of it at the Giant Food store on Columbia Pike, which has a large selection of ingredients that are common in Central America.

Velasquez’s [the waiter’s] family also exacts costs on the economy. He sends about $100 a month home to family in El Salvador, which does not create new economic activity here. According to the Pew Hispanic Center, in 2000, such remittances amount to $10.2 billion for Mexico and four Central American nations. If the uninsured Velasquez were to have a serious medical problem, the cost would probably be borne by the hospital that treated him. (“We just can’t be sick,” he said.) Inova Fairfax Hospital, near Velasquez’s home, provided $75 million in health care last year to people who were too poor to pay and had no insurance, many of them immigrants, said Ron Ewald, the hospital’s chief financial officer. “It can be very volatile and extremely costly,” he said.

There are local costs too. The Arlington County school system is spending $16,464 per pupil this year, or more than $32,000 for his school-age children. School spending is supported partly by state and federal governments but most significantly by property taxes, which Velasquez pays indirectly with his rent. But what the school system spends on his children’s education can also be viewed as an investment in the next generation of U.S. workers. On Thursday, as Velasquez gathered his things to head back to work, his 17-year-old daughter, Alma, described her plans. After high school, she plans to go to a community college for two years, to save money, then transfer to a four-year university. Ultimately, she wants to be an immigration lawyer. “It came to me because my parents went through so much to get here,” she said.

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