Restaurateurs are very afraid of Biden’s relief package. It will double the wages for tipped workers this year, during a pandemic. This comes after so many restaurants were in lockdown for nearly a year. It is even worse than that. There is a plan to destroy the tipping policy and put salaries more solidly in the hands of the federal government.
President Biden’s $1.9 trillion coronavirus relief package does more than boost the minimum wage. It would completely overhaul how tipped workers are paid with a restaurant industry struggling to survive.
Restaurateurs fear the move would squeeze the industry’s tight profit margins and put an unnecessary strain on the still-sputtering economy.
And their profit margins are very, very tight.
THE PLAN TO KILL RESTAURANTS
House Democrats’ plan would more than double the minimum wage for tipped employees this year, to $4.95 per hour, before ultimately equalizing it with their proposed hourly $15 minimum wage by 2027.
To say it another way, Biden would eliminate the tip credit and raise the full minimum wage to $15 for everyone, including servers. Federally, the minimum wage has remained at $7.25/hour since 2009; the national tipped minimum wage is just $2.13. New York City already has a $15 minimum, but since Gov. Andrew Cuomo likes to be ahead of the curve, he could prompt the state to eliminate the tipped minimum even sooner.
Waiters don’t want that. They do better with tipping, much better. These are often well-paying jobs for people who wouldn’t ordinarily be able to make anywhere near what they make with tips.
The National Restaurant Association says the combination of negatives they see in the proposal outweighs the positives in the rest of the package, such as the billions of dollars in aid for restaurants and bars.
“There is not an economist yet who has offered that an increase in the minimum wage and elimination of the tip credit is going to result in more restaurants expanding operations or opening their doors,” said Sean Kennedy, the group’s executive vice president for public affairs.
At least 110,000 restaurants have closed, and 2.5 million jobs have been lost due to the pandemic, Mr. Kennedy said.
EMPLOYERS HAVE TO MAKE UP THE DIFFERENCE TOO
Employers are supposed to make up the difference if employees’ tips don’t bring them in line with the standard minimum wage — known as the “tip credit.”
The tip credit would be eliminated by 2027 under the Democrats’ plan.
Mr. Kennedy said the average server makes $19 to $25 an hour, including tips, and their wages could be slashed if they are equalized too quickly.
He said the restaurant industry is willing to have a broader conversation about wages but now is not the time to impose drastic changes.
“A quick increase — five years to $15 [an hour] and a quick elimination of the tip credit — the restaurant industry cannot support that,” he said.
Frankly, how often would you go to a restaurant if they do that? Here on Long Island, lunch for two with a drink, no dessert, in a nice restaurant costs $70 to $90. Right away, that eliminates seniors who are freer to go out to eat.
Advocates of abolishing the tipped minimum wage say the “sub-minimum wage” structure has exacerbated racial inequities during the pandemic.
“Tipped work is a legacy of slavery,” said Liz Theoharis, co-chair of the Poor People’s Campaign. “Someone has been hurting our people, our workers, and our tipped workers. It’s gone on for far too long, and we won’t be silent anymore.”
That’s absurd and is just another excuse to put the government in charge of private enterprise.
The stimulus package would also reinstitute COVID-19 paid sick leave, which expired at the end of 2020. The proposal would eliminate exceptions for companies with fewer than 50 or more than 500 employees. Democrats say it expands protections for nationwide restaurant workers. The only problem is it kills the restaurants where they would have worked.
It will kill restaurants, but our elites don’t care. They can always go to The French Laundry.
That is socialism, baby. The big, untrustworthy, greedy, inefficient, ideological government rules over everything.