I am Latino, Ms. Kaye, not that that has anything to do with it. I also worked in Mex-Am groups for about 10 years. Racism is an everyday thing, sorry to hurt your feelings.
Forget the restaurant, just put on your little sombrero and go anywhere where there are Latinos. Report back.
And you appear to express a very strange and not uncommon tendency: that of equating reactions to racism as racism. 
As far as political correctness: IT has created animosity and suspicion? Huh? Yeah, let's equate asking people not to use the n-word with guys in Texas dragging a black man to his death behind their pickup.