New York Times FTW on a real minimum wage for tipped employees

Ryan Crierie CC

Writing about the restaurant industry’s attempts to weasel out of Los Angeles’ new $15 minimum wage, the New York Times editorial board is exactly correct:

A challenge will be to ensure that all employers are held to the new higher wage. California is already one of eight states that prohibit the deplorable practice of subminimum wages for tipped workers. So waitresses and waiters in Los Angeles will be eligible for the higher $15 minimum wage along with everyone else. Policy makers at all levels of government should follow California’s lead in outlawing subminimum tipped wages.

The restaurant industry, however, will not go down without a fight. The Los Angeles City Council has pledged to study the potential effect of allowing restaurants to add a service charge to bills to meet the increased costs. It is past time, however, to stop coddling an industry that has come to regard itself as entitled to special dispensation. If restaurants can’t pay their servers the minimum wage, they need to pay higher earners less or raise prices. If restaurants are franchises that can’t afford to pay adequate wages, their corporate parents should share the burden.

There are two points worth adding. First, it’s important to keep in mind that even though crisp, black clad servers delivering expensive plates of halibut cheeks and rabbit saddle may be the image that comes to mind for many of us, it’s actually the IHOP waitress working the graveyard shift that we should be thinking about. Just as so many jobs are invisible, the bulk of the restaurant industry remains hidden in plain sight. Instead of worrying about your favorite stylish bistro, IHOP, Denny’s, Waffle House, Olive Garden, Pizza Hut, or a million diners where a $2 tip is a big deal – is what should come to mind when you think of the “restaurant industry”. Industry is always happy to let the prevalence of small businesses in the public imagination do their work for them in making the argument against higher standards.

The second thing to bear in mind is that the restaurant industry’s warnings that ending their exemption from minimum wage laws will lead to job loss doesn’t square with the empirical evidence.

Of course, the restaurant industry, the leading employer of minimum-wage workers, always warns about the perils of raising their salaries.

But now it’s possible to gauge some of these effects, thanks to the range of base pay in different states with different rules.

The NRA’s own projections show that restaurant sales are expected to grow this year at a rate exceeding the national average in at least some of the states with higher base wages, including California, Oregon and Nevada. And overall restaurant hiring hasn’t been driven down in the Western states that require higher minimum wages (although DeFife says there are complaints from restaurateurs in Oregon and Washington that they’ve had to cut back).

For a more detailed analysis of the data around the issue, check Politifact’s takedown of industry claims about the effects of Oregon’s law and the Economic Policy Institute’s policy brief on the federal subminimum wage [PDF].


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