Subminimum wage-a-vu
Sure, the deal to raise Seattle’s minimum wage has been in effect for ten years, which is a long time… but the arguments being deployed by the restaurant industry lobby are even older. That’s because they’re the same discredited arguments that get rolled out every time workers fight for higher wages, and they date back more than 100 years.
No matter what the minimum wage is, no matter what minimum wage increase is up for discussion, and no matter where in the country it’s happening, restaurant industry lobbyists always make the same old tired argument: the industry simply cannot swallow a wage increase without destroying businesses, and perhaps causing locusts to descend.
Just look back to 1988, when Seattle restaurant owners were faced with eliminating the state’s subminimum wage for tipped workers so they had to raise wages from $2.13/hour to $3.85/hour — an increase of more than 80%! The restaurant industry said it would be impossible, arguing in the voter’s pamphlet that year that “Tips are considered wages” and that raising wages for tipped workers amounted to the industry being “unfairly penalized millions of dollars”.
Familiar arguments. But voters raised the wage, owners adjusted, and the industry grew.
Then in 1998, the state restaurant association said raising the minimum wage to $6.50/hour would “have a devastating impact,” and they continued to complain about it for years afterwards. Just think — that’s more than three times the federal subminimum wage of $2.13/hour for tipped workers.
But voters raised the wage, owners adjusted, and the industry grew.
It was the same old story in 2014, when Seattle restaurant owners said that increasing what they paid workers from $9.19/hour to $15/hour without a special subminimum wage for tipped workers could have disastrous results because “such a leap forward, from a position of already having one of the highest minimum wage levels in the country, is unprecedented.” The person who wrote that was then an owner of Poquito’s… which restaurant has now become a restaurant group with12 locations.
And consider Michigan, where the subminimum wage for tipped workers is slated to soon increase from $3.93/hour to $6/hour. Restaurant owners in that state are trying to roll back that increase, saying the consequence will be “a $40 cheeseburger, a salmon Caesar salad north of $50 and hundreds of thousands of dollars in labor cost increases.” Amusingly, the restaurant lobby in Michigan is also arguing that they need ”some clarity” and more time because “they’ve got to plan for that [wage increase].” Meanwhile in Seattle they are arguing that 10 years of planning time is not enough. Almost makes you wonder if these arguments are not entirely in good faith!
So today, when Seattle restaurant owners say it’s impossible to increase what they pay workers to the same minimum wage as every other worker, pay attention to their track records, not their tall tales. Despite their threats and protests, the sky remains aloft, and the industry continues to grow
Additional background:
In 1997, the restaurant industry said that that 15¢ increase in the minimum wage to $7.16 and hour left “their plates now are so full of labor costs that there’s little room for profits” and that they would launch a campaign for a tip credit because “tipped employees often earn more than managers and owners.”
In 2008, the state restaurant association said that owners “feared” that an upcoming minimum wage adjustment to $8.55/hour would be “crippling” to the industry.
In 2011, they said that year’s minimum wage adjustment to $9.04/hour “is going to make tough times tougher for a lot of restaurants,” because “the margins can’t get much tighter.”
In 2012, they said that as a result of that year’s $9.19/hour minimum wage, “66 percent said they planned on eliminating jobs or halting hiring.”
In other words: this stuff has never turned out to be true for the 100+ years they’ve been saying it, and there’s no reason to take it seriously anymore. The effort this year to create a permanent subminimum wage for tipped workers is just wage-a vu all over again.
