By Marissa Lambert , Contributor
In the summer of 2019, House Democrats passed the Raise the Wage Act – an Act that would not only raise the minimum wage to $15 by 2025, but also eliminate the lower minimum wage for tipped workers. Although the bill has not yet been taken up by the Senate, it sheds light on important issues for workers in the restaurant industry, particularly the topic of what constitutes a fair wage.
The last change to the minimum wage occurred over a decade ago in the summer of 2009. It’s the longest period America has ever gone without a raise in the minimum wage since its creation in 1938. What’s more, the minimum wage for tipped workers has not changed since 1996, still sitting at $2.13 an hour.
With the current minimum wage of $7.25 failing to keep up with inflation, restaurant workers and other tipped employees are left in a particularly vulnerable position. As a result, workers have joined forces over the past few years to advocate for a higher minimum wage, finding an avenue through the Fight for $15 movement. This movement, combined with the Raise the Wage Act, has brought significant media attention to workers’ wages – in addition to some criticism.
The Fight for $15 Controversy
With the help of technology, restaurants have undergone a substantial transformation over the past decade. Kiosks have replaced workers at fast-casual sit-down restaurants and fast-food chains alike, eliminating the need for round-the-clock personal service.
In addition, the popularity of food delivery services like Grub-Hub and UberEats (and, currently COVID-19) have decreased the number of on-premises customers, meaning many restaurants no longer need a full wait staff at all times.
Because employee cutbacks have already occurred, some people are more wary of a $15 minimum wage. They think companies will be forced to resort to layoffs, or simply won’t be able to afford $15 an hour, causing them to go out of business despite evidence pointing to the contrary.
There’s Strong Support for the Movement
Many people in the industry, as well as the American public in general, want to see a higher minimum wage because they feel that a full-time working adult, regardless of where they work, should be able to support themself.
For the majority of restaurant workers, $2.13 an hour plus tips is not enough to do that. The Raise the Wage Act would significantly increase the take-home pay of employees, since they would still receive tips on top of the $15 hourly rate.
According to a report by Resourceful Compliance, 80% of Americans say they support a higher minimum wage, and one-third who voted yes think it should be $15 or higher. Unsurprisingly, this greatly differs by political party. 93% of Democrats are in favor of a higher min-wage compared to 66% of Republicans (unaffiliated came in at 80%). The desire to see a minimum-wage bump also decreases the wealthier someone becomes.
Caught in the Middle
Although progress has been made to amend the lower minimum wage for tipped employees, restaurant workers are the last in line to receive these benefits due to heavy opposition from restaurant owners and groups like the National Restaurant Association.
For example, Governor Cuomo of New York announced in January 2020 that many tipped employees in New York would no longer be paid below-minimum wages by the end of the year. The order applied to “a vast array of workers, including hairdressers, nail salon employees -- but not restaurant workers, many of whom did not want the change,” believing the current method of payment keeps employer costs low and preserves jobs.
However, change could come soon as administrations, such as Cuomo’s, feel “the current system is so confusing that it can lead to employers intentionally stealing wages or inadvertently pay workers below the minimum wage.” And those fears are well-founded. According to a 2018 Department of Labor report, 84% of full-service restaurants had “violated labor standards” including wage and tip violations.
A Matter of Time
Overall, it seems that the individuals running restaurants are largely against an increase in the minimum wage due to fears they won’t be able to afford it, while tipped employees support a wage increase, despite warnings of potential layoffs and shutdowns.
However, while the Senate continues to not take up the Raise the Wage Act, states are moving forward with trying to give workers a much needed pay boost, including restaurant employees. It is only a matter of time before the fight for a $15 minimum wage becomes the norm in the US. Restaurant operators need to start planning now for how they’ll deal with that increase. We’ve detailed a how-to on that earlier in the year.
About the Author
Marissa Lambert works in marketing and editorial at SuccessFuel, and spent the summer conducting research on how Americans, and our politicians, feel about the federal minimum wage. She has a passion for both politics and storytelling, and strives to tell impactful stories through the lens of her community.
