Applebee's franchise exec calls lower pay an 'advantage' of high gas prices in viral email: This 'shouldn't shock us,' says labor expert

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Key Points
  • Wayne Pankratz, executive director of operations for Applebee’s franchise Apple Central LLC, recently sent out an email detailing how higher gas prices could be used to lower wages for workers of the company.
  • The email went viral, sparking an outcry across social media.
  • In the third quarter of Q3 alone, more than 2.5 million workers quit the leisure and hospitality industry. Many cite pay as a reason.

In a recent email to employees, Wayne Pankratz, executive director of operations for Applebee's franchise Apple Central LLC in Kansas City, Missouri, outlined how the rising price of gas could ultimately benefit the company. Specifically, he explained, it could enable Applebee's to lower workers' wages.

"Everyone has heard that gas prices continue to rise," he wrote in the email. "The advantage this has for us is that it will increase application flow and has the potential to lower our average wage."

Pankratz wrote that those in Applebee's worker pool are often living paycheck to paycheck, meaning any disruption to their income would make it hard to keep up with bills. For them, he said, rising gas prices could mean having to take on more work to cover living costs.

"Many will need to work more hours or get a second job," he wrote. "Do things to make sure you are the employer of choice. Get schedules completed early so they can plan their other jobs around yours. Most importantly, have the culture and environment that will attract people."

The email has gone viral across social media and sparked an outcry about Applebee's behavior toward its workers.

Applebee's did not immediately respond to Grow's requests for comment. But in a statement to CBS, Applebee's said Pankratz is no longer employed by franchise owner Apple Central. Pankratz's memo was "the opinion of an individual, not Applebee's," Kevin Carroll, chief operations officer at Applebee's, told CBS.

All the same, Pankratz's attitude isn't an outlier and "shouldn't shock us," says Ileen DeVault, a professor of labor history at Cornell University and director of The Worker Institute. "Restaurant workers have been telling us for quite a while that this is the situation in the industry. It's just, here's somebody being really blatant. He's saying what we all knew all along."

'This job is just not providing them with the living wage'

Throughout the Great Resignation, one of the industries that saw the greatest level of attrition was leisure and hospitality. The third quarter of 2021 alone saw more than 2.5 million quits in the industry, according to the Bureau of Labor Statistics.

Workers in hospitality cite various reasons for quitting, but among those who say they're not coming back, 55% say it's because their pay is too low, according to a Q3 Joblist survey of 26,278 jobseekers.

Applebee's workers make an average of $11.76 per hour, according to Payscale. The living wage for the least expensive state in the country, South Dakota, for one adult without children, is $12.61 per hour, according to MIT's Living Wage Calculator.

"The context is clear," says Najah Farley, senior staff attorney at the National Employment Law Project. "People still need a job. This job is just not providing them with the living wage or the protections that they need."

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