Leaked E-Mail Shows Big Business Trying to Use Small Businesses to Weaken $15 Minimum Wage

Comments

1
All of the best #brands have CapitalizedWordsMadeIntoOne.
2
I miss the days when you could gloat about paying interns a living wage of $0 an hour.

3
Instead of OneSeattle, Lets talk about big labor. Lets talk about David Rolf.

David Rolf gets paid. He gets paid a lot. Some speculate that he is a member of the "1%" the Occupy Movement is so fond of vilifying.

But what is more interesting is his influence over Seattle politics. Both Seattle City Council members, like Kshima Sawant, and our own Mayor want him on their side. He was put on the mayors task force to explore the issue of raising the minimum wage to $15 an hour.

And more interesting still is how he makes his money. He is the head of the Big Union SEIU Healthcare WA. Yes, in other words, he has no interest in exploring the impact of such a minimum wage hike. He has no interest in exploring the debate.

Instead, he and his organization have every incentive to raise the minimum wage as it supports their Big Union interests. (Examples include that many of their contracts are indexed to the minimum wage. So more money for their contracts, more money for them.) Which makes the Mayor's task force just a force to make sure that the task is to raise the minimum wage.

I dont know about you, but I am against Big Business influencing our elected officials. I am also equally against Big Union dong the same thing. Unions are good things. Big Unions using money to change policy in government is another. The Mayors "task force" is nothing other than an excuse to pass a law that has been jammed down the throats of the citizens of Seattle.

This issue has very little to do with the unemployed, working poor, low skill laborers, teenage jobs, or small business owners. This issue has everything to do with our local government playing favorites to the Big Unions.

4
Does OneSeattle really think raising prices will kill their businesses?

Didn't Seattle invent the $4 cup of coffee?

Give me a break.
5
Hey Nick CapHill, go have a shot of Jagermeister.
6
Total compensation is a non-starter.

A phase-in, sure, lets talk about it. I'm not convinced on a tip credit, but I'm following the discussion and open to hearing more from all the stakeholders about who that would help/hurt.

Deducting people's healthcare and retirement, on the other hand, is appalling and people should be embarrassed to ask for that publicly.

I'm more and more convinced that 'Cap Hill' really is a douche bag thing, btw.
7
Brilliant, co-opting underpaid workers to march against their own best interests. That feels like intimidation to me. Customers will tip if they want to tip, it's ingrained in our culture. I hope these workers aren't falling for this BS of "doing away" with tips, or more importantly, being pressured to participate in ridiculous marches and social media propaganda.
8
Tipped worker here, and no one's speaking for us but US. The 15now people aren't speaking for us and big business isn't either. We actually WANT a tip credit that will allow our wage and our tips to stay exactly as they are. So don't assume any of these groups have our interests in mind.
9
Lams Market also is featured in a Chase bank radio commercial on heavy rotation, at least on KZOK, that all but blames local banks for the 2008 crash. Lams Market is not a friendly local business, they are a capitalist ass kissing corporate shill.
10
15Now needs to reach out and really get the small business community on their side. History has shown that those in power stay in power by playing the lower classes against each other.
11
@8 hate to break it to you, but a lot of people in 15now are tipped workers. I wonder how many members of the chamber of Commerce are.

@10 there are a lot of small businesses on our side; my local bodega has a 15now sign in their window. Unfortunately the media only gives white restaurateurs a voice.
13
I've been thinking about "total compensation" and it seems like bullshit to me. Companies are asking that they be able to pay their workers little to nothing provided that the public kicks in enough in gratuities to cover their wages.

I think it has the potential to set a bad precedent where wages are expected to be covered by customers rather than by employers. I'm sure businesses would like to transition to a system where they can dictate when people work, but not have to pay them, but it seems altogether absurd.

A big step back from where we are now with a low minimum wage that is equal for all workers.
15
"And more interesting still is how he makes his money. He is the head of the Big Union SEIU Healthcare WA. Yes, in other words, he has no interest in exploring the impact of such a minimum wage hike. He has no interest in exploring the debate."

@3, if you want to have impact, find someone to write for you. You're embarassingly bad and you're picking the wrong people to condescend to.
16
Perhaps restaurants could abolish hidden customer surcharges, aka tips. If they can't retain employees that way, they could just pay them more!
17
@8, so can you confirm back to me that you, as a tipped worker, would prefer to have your tips count as part of your $15 per hour versus getting $15 guaranteed PLUS whatever else you can make in tips?
18
Yes, that's exactly what I'm saying. I make very good money and I don't believe I would make as much with a $15 wage. Others may think differently, and they should support whatever they want, but I would say most of us like things as they are now. I've talked to people with 15now and they seem more interested in telling me why tips are bad than in listening to what I have to say.
19
Bob Donegan, CEO of Ivar's restaurant chain, reportedly acknowledged that about 70 percent of Seattle voters support a $15 minimum wage without exceptions

Haven't I been saying that business has their own polls that agree with 15Now's released poll? They've been keeping it quiet because the consequences are damning.

Their only hope is to confuse the issue and hope to get people to vote for something they don't understand. The faster 15Now gets this on a ballot and gets everyone voting, the better.
20
Jess of 15 Now is against tipping and makes a very compelling argument.
21
@11 15now should get the business on their side to speak out. Cause right now it seems one sided.

Also totally composition is BS. And I bet it scares of people who support a tip credit.
22
I'm pissed off that a SLOG writers put pressure on Sawant to present a compromise other than 15 now for everybody . . . PERIOD! Forces are going to chip away at this and the poor are going to still be poor and the rich just get a pass. Fuck.
23
@22 its not just slog, CM Sawant needs to be smart about this cause if it gets fuck up the the right will have something to point to to scare away others who try to raise the min wage. What she did was smart and showed real leadership.
24
Get involved in the 15 Now Conference here in Seattle on Saturday April 26th. This is for EVERYONE who is a $15.00/hour supporter. I'll be there!
25
@3 According to the annual report that the SEIU 775 had to file the US Department of Labor, Office of Labor Management Standards, David Rolf made $190,596
26
Tipping is fine, but a worker's ability to make ends meet shouldn't be dependent on it. Tips should be extra, not base. Seattle voters agree and that's why a tip credit will never pass.

But this leak is utterly damning. Now we know David Meinert, Mr. 99%, is now a shill for big business. We need never take him seriously again.
27
http://www.cnbc.com/id/101451789 "As Washington guarantees the state's full minimum wage for servers, who would continue to make tips on top of it, the drive [to $15] has pitted the lower middle class against the working class who serve them food."

Big business doesn't need to worry about coercing small businesses to tell their staff that 15Now wants to do away with tipping. 15Now has been great about telling everyone that is their agenda all by themselves.

CNBC's unscientific poll: 77% said they would stop tipping if they knew their server was getting $15. The service industry has every right to be concerned about this experiment taking place in Seattle.
28
@26 Is Meinert part of OneSeattle? I didn't see any of his businesses listed...?
29
I'm surprised at the laser focus here on high end restaurant work when the most sympathetic (and mostly female) minimum wage workers do elder care and house cleaning. Two generally untipped lines of work. Why that's not part of the The Stranger and Slog discussion, instead of endlessly engaging fine dining purveyors on the tip credit instead, is a either mystery or an example of journalists getting snookered off the main point by purposeful digression. Talk to the woman who's vacuuming your apartment building's hallway (or diapering your great-grandfather) instead of your bartender friend for a change of pace.
30
We'd have to wonder why Microsoft or Boeing would really care unless they though it was going to hurt the local economy.

They can't have a lot of under $15/hr positions. Microsoft, being non-union can easily lower their great benefits to cover any additional costs.

Boeing isn't included because they are union.

Just because they are members doesn't mean they are driving the discussion.
31
@18: Fnbs wrote, "I make very good money and I don't believe I would make as much with a $15 wage."

If you think your customers tip inversely proportionate to the wage your employer pays you, why not tell customers that you're volunteering your time? If the lying bothers you, just donate those wages back to your employer.
32
Dom, I honestly cannot believe the spin you have put on some of the events that are happening right now. 20 bars and restaurants did not have a meeting with tipped employees- tipped employees FROM 20 bars and restaurants showed up to a meeting. Understand the difference? They showed up because they read the comments of the articles you write; because they read the articles and statements that Jess Spear writes and says.

Every day the articles in the Slog are followed by tons of comments from people on the side of $15Now saying that tips should be abolished, that people shouldn't work for them, that they degrade women. Then, when tipped employees react and say "Um, no thanks, we like the way it works for us now", you say that they are being manipulated or that there is a "strategy" on the part of the business owners. Why do you think so little of people in our industry? Why do you insist on making them into victims? The tipped employees that people like you and Jess are trying to "save" are doing their own research and deciding for themselves what they think is right. As someone that has been a tipped employee for over 20 years, I'm tired of people that know nothing about our business spouting off about the audacity of tipping without recognizing that tips are what allows a great many Capitol Hill residents to- gasp- continue to be Capitol Hill residents. They also allow students to work while they go to school, for artists and musicians to work and still follow their dream, for teachers and other low-paying professions to supplement their income by working a shift or two a week. I hate to break it to all of you flat wage proponents out there but they are also far above $15, so stop assuming that we're going to be thankful to have a flat wage and people tipping 10% or not at all. It still will not add up for us.

Stop victimizing us. Stop trying to come to our rescue. Stop spouting off national talking points and statistics in a state that they do not apply. Acknowledge that perhaps, just perhaps, there is a better battle to be fought.
33
By the way, Dom- when all of this is over, I hope that you can hang your activist hat on whatever the next big social issue is because you have lost all credibility as an objective reporter. You are inspiring the folks that are demonizing a lot of people that prior to this issue were consider a blessing to the community, the great local and independent alternative to all the corporate crap that we are all trying to rally against. Now, if someone actually has the audacity to differ in opinion to you, in any way, even if it's with the benefit of employees in mind, they are vilified. It's the worst kind of journalism, the sort I'm used to hearing from the Fox News idiots. It doesn't matter what side of the political fence you're coming from- you're still inspiring hate and anger.
34
No business is a blessing for the community. You people got to get over huffing your own farts.
35
@33 Not one past, current, or future $15 policy proposal contains any language that would outlaw, discourage or otherwise inhibit tipping. Any suggestion that it would is pure fear mongering.

In fact, we already don't have tip credit in WA, and tipping still occurs. So why should it be any different under a $15 min wage?

No one in the pro $15 camp is trying to change how people get paid, we just want the base to be higher. Yet people in the anti-minimum wage camp would like to change the basic definition of what minimum wage means in this state.
36
"No business is a blessing for the community."

I guess you don't own a business then? Just yesterday a long time customer told me what a blessing our store had been to her. Now perhaps we could parse what the term "blessing" means to different people. I consider it just to be, wow I really appreciate that you have opened this business here.

Perhaps you just aren't visiting the right businesses. Get out of Walmart and visit your local businesses.
37
Socialist Kshama Smart, a Seattle City Council member, misled people on the minimum wage issue in an effort to attack conservatives.
By Maxford Nelson│Freedom Foundation

Newly-elected Socialist Seattle City Council Member Kshama Sawant is better known for her incendiary rhetoric than her policy acumen. Her recent comments at a minimum wage forum at Seattle Central Community College exhibit either a lack of knowledge on the issue or a startling deficiency of candor.

One attendee asked Sawant about the economic consequences of increasing the minimum wage. In his comments, the gentleman noted that the U.S. territory of American Samoa had recently experienced significant economic damage after Congress mandated sharp increases in the territory’s minimum wage.

Sawant responded by claiming that the American Samoa study “has been done by some organization called the Freedom Foundation, which is a right-wing think-tank.” Her comments about the study’s validity were unequivocal.

“As an economist and as an academician,” she explained, “I feel strange calling it a ‘study’ because it’s a spurious analysis that has no basis in reality… Even by the standards of right-wing analysis it’s not that great.”

Sawant contended that, since American Samoa’s minimum wage was increased at about the same time the 2008 recession hit the mainland U.S., Samoa’s massive job losses were the result of the recession and not the minimum wage hikes.

“Just because we’re determined fighters for economic justice does not mean that we cannot see through this haze that’s being created,” she concluded. “We know the facts. We understand how the economy works.”

There’s only one-problem: the report was actually written by the Obama Administration’s Government Accountability Office (GAO), not the “right-wing” Freedom Foundation. While we have cited the study, we are not its authors.

First, some context. In 2007, Congress mandated that American Samoa and the Commonwealth of the Northern Marianas Islands (CNMI) increase their minimum wage in yearly, 50-cent increments until they reached the $7.25 federal minimum wage. The GAO was tasked with providing regular reports on the impact of the minimum wage increases.

In 2011, the GAO’s 147-page report found that, from 2008 to 2009, employment in American Samoa fell by 19 percent and employment in the CNMI fell by 13 percent. Major employers took cost-cutting actions like “laying off workers and freezing hiring,” and “attributed most of these actions largely to the minimum wage increases.”

In emotional testimony before Congress in 2011, American Samoa’s Democratic Governor, Togiola Tulafono explained that “we are watching our economy burn down.” He harshly criticized the GAO report, arguing that it “does not adequately, succinctly or clearly convey the magnitude of the worsening economic disaster in American Samoa that has resulted primarily from the imposition of the 2007 U.S. minimum wage mandate.”

Congress and President Obama responded by freezing the increases and significantly delaying implementation of the mandate.

There is no question that the minimum wage increases, not the mainland U.S. recession, are what devastated the territory’s economy. Sawant’s comments at the forum make it painfully clear that she was either entirely unaware of the facts or deliberately misrepresenting them. Before relying on her experience as “an economist and academician” to dismiss a study out-of-hand, she should at least take the time to read it and understand the context.

Some of Sawant’s other comments also reflect a refusal to consider all of the evidence.

Responding to one attendee’s worry that a $15 minimum wage might decrease employment, Sawant claimed that “not one single example exists which shows that if minimum wage was raised it increases unemployment or it shuts down businesses.”

On the contrary, in addition to American Samoa’s example, there are a number of studies which have found that higher minimum wages decrease employment, especially for low-skill workers. The Congressional Budget Office recently issued a report saying as much.

While the effect of higher minimum wages is admittedly controversial, Sawant could not even bring herself to acknowledge the debate exists.

Lastly, while Sawant often speaks sympathetically of small businesses, businesses owners of all stripes should expect no mercy from Sawant and her army of activists.

“It is extremely difficult to be a start-up business,” Sawant explained. “If you start looking at the cost of rent, the cost of capitalization, the cost of getting a, you know, location that is conducive for you to sell your goods, whatever they may be, it is an obstacle-ridden path to start any small business.”

But labor costs are not part of the problem, according to Sawant. “Workers are being paid poverty wages and small businesses still find it extremely difficult to survive in this economy.” Therefore, according to Sawant’s twisted logic, since Washington’s small businesses are already struggling to cope with the cost of the highest state minimum wage in the nation, we should increase the minimum wage to $15 an hour and expect no negative consequences.

Then again, Sawant’s goal is not so much to fix the economy as it is to overthrow it entirely. “If an economy is so ridiculously incapable and dysfunctional that it cannot pay something close to a living wage to a majority of its workforce, then we don’t want that economy,” Sawant proclaimed. “What are we trying to protect?”

38
Slog commentators concentrate on restaurants because that is the service that we all use. This is not the right community for perspective on elder care or housecleaning.

If you look back through Slog I think you'll find a lot of noise made about ending tipping on all sorts of articles. It's something people whine about, but are too polite to actually do.

Aside from the douche at Six Arms who didn't take my order even after I was sitting there for half an hour waiting, I have tipped every server in excess of 20% for the better part of my life. Oh, and I think we stiffed someone at our local diner, but I feel really bad about it.
39
" Sawant proclaimed. “What are we trying to protect?”"

So tellling. The more I follow this women the more convinced I am that she doesn't understand America, that she is bringing her experience in India to bear on something that isn't what she thinks it is. She doesn't have any interest in small business. She has just learned that other people do care about, well about opportunity so she is pretending.

"it is an obstacle-ridden path to start any small business.”

My biggest obstacle has been the government. In my 6 years there have been several laws devastating my industry where so many people, particularly women with children lost their small businesses because, and only because of the cost of complying with insane government regulations to make kids safer when these companies were doing NOTHING unsafe. The loss of those jobs was considered "unintended consequences".

And yes, she misses the boat again, labor costs are an issue. How can she suggest the biggest expense of a business isn't an "issue". It isn't necessarily the wage itself as much as the taxes associated and additional federal, state, county and city taxes all piled on one another. Now, I'm not against all the taxes, just pointing out that labor is indeed an expense more than those outside the business see.
40
This is not advocacy journalism. This is yellow journalism. At it's yellowest...
41
@3 - "The Mayors "task force" is nothing other than an excuse to pass a law that has been jammed down the throats of the citizens of Seattle."

I don't disagree at all. This committee has not one relevant representative for non-tip/commission-based retail, who have totally been left out of the conversation. All we have is vested interests on all sides, and very few genuine & legitimate caring org.'s that represent the REAL parties in this situation that will be harmed if this comes to pass - the employees of small biz and the small biz themselves.

Actually, there is one group of only small businesses owners. It's called Forward Seattle, and as a member of this group, I can only say that the group's goals are to find a balanced solution to what so many have created as a problem.

Yes, it looks like this One Seattle group is another mishmash of power players who may or may not care about the individual person who works at a small business. Dominic, I would encourage you to ask some questions before you spread your bias–laden nonsense. All you are doing is contributing to the miasma that is causing people to pick sides when really – there does not need to be any side picked because we all need to work together.

Dominic, if you did your job as you are supposed to do as a professional reporter, you would go out and speak to businesses. You go out and speak to employees of many of the businesses who have spoken out. You would do your job you would find out what the realities are. Instead, you aren't a professional – you are just another biased partisan making matters worse. And, I think that this is a low point in your professional career and that you should be ashamed of yourself for actively working to separate the very people in Seattle that should be coming together to find a solution.
43
The idiots behind 15now want to end tips because it doesnt fit into the structure that they DO want to mandate. It has nothing to do with "sexism" (Sawant quote), it has nothing to do with customers bias, and being an unfair system. It has everything to do with it just not helping what their ultimate goal is.

15now folks, Sawant and the Big Unions need to listen to the people that they are claiming that they are helping.
44
I am a tipped employee and have been for the past 14 years. This is my career, not a "job." I work hard and I get paid very well. Over the past 14 years, I have averaged $28/hr. I am not someone who needs saving with an increase to minimum wage.

There are some fears over people tipping less due to a raise in the minimum wage without including a tip credit. But bigger fear comes from what businesses have to do to adapt to such a large minimum wage increase. Most restaurants and bars try to operate with a 5-8% net profit, if you built a business that makes more, good for you, but many fall short of this goal. Labor is a restaurant/bar's biggest expense, and without making large changes to the operations of a business, nearly all of them would close.

So what are the possible changes? A price increase is inevitable, likely 20%. Another possibility is that the business has a service charge added to every bill instead of a tip. The business can then use that service charge to supplement the increase in payroll, with leaving some left over as a tip. This effectively cuts our tip pool from 20% down to likely 10%. We care about the businesses we work for and don't want them to have to close, or make drastic changes that would end up slashing our pay by more than 25%

I'm all for an increase in minimum wage, but without considering total compensation, it's a threat to my entire industry.
45
While I sympathize with tipped employees' concerns, their arguments don't pass the common sense test.

Firstly, there is not support for getting rid of tips altogether, so it doesn't really matter what people in $15 Now think on that subject. Unscientific surveys to the contrary, there is no reason to believe that people will stop tipping because of a minimum wage increase. If anything, they'll be tipping more when the prices increase. Anyone who doesn't tip due to a $15 minimum wage is already not tipping.

Personally, I'd be fine if the expectation of tips were replaced with a service fee added to all bills. Many restaurants already do this for large parties, and many parts of the world do this for all bills. If you're a tipped employee who makes a decent wage, there's no reason to believe that you won't continue to do so if it's a service fee on the check.

Afraid that management will take a bigger cut of that? Work for another restaurant where the management aren't assholes trying to cut into your wages. Hell, let's include in the legislation that it is illegal for management to apply such service fees to anything other than the wages of their service employees (including the back room employees, though).

Think that you get better tips than your coworkers because you offer better customer service? You're wrong: studies have shown that there is very little correlation between the level of service provided and the amount of tips received (it actually is based more on the customers' moods).

But assuming that tips are for the most part here to stay, you will continue to get tips, and common sense and social pressure dictates that it will continue to be at the same rates relative to the checks as they are today. Any restaurant that would try to introduce a no-tipping policy without introducing higher wages and/or service fees to compensate is a restaurant that will be out of business soon enough because its staff will walk away, just like they would today if they tried to pull that shit.
46
@37

Oh, look. Freedom Foundation. Let me look that up. Wow, the first link that popped up includes "Tales of Tyranny." I wonder what kind of right wing bullshit this entire site really is.

@39

And look, one of the anti-MWers using said right wing bullshit. And he even uses the "scary foreigner" tactic. Go fuck yourself
47
@44, brand-new Slog commenter JimR wrote, "I am not someone who needs saving with an increase to minimum wage."

This isn't about you, Jim.

Four days ago, Jim wrote, "I currently work as the bar manager of a bar." Then, today, Jim wrote, "I am a tipped employee and have been for the past 14 years."

Jim, you accept tips as a manager?

I guess it should be little surprise to see Slog comments suddenly flooded with sock puppets whenever this topic comes up.
48
I think a 10-15% price hike is an unrealistic number to achieve $15/hr minimum. Everybody now who currently makes $15/hr will all-of-the-sudden become a minimum wage worker. They won't get a bump in their wage, but will move backwards relative to their current compensation for the work that they do.

102,000 workers will benefit from $15/hr. How many workers will "become" minimum wage workers? A shift manager who currently makes $15/hr all of the sudden becomes a minimum wage worker making as much as an entry level position. My guess is that they are going to demand a $5ish/hr raise to reflect comparative compensation for the added responsibilities they have over the entry level position.

So now we pay the now $15 shift managers $20/hr, which is what the assistant manager makes. So the AM gets bumped to $25/hr, and the manager from $25 to $30/hr and so on.

I think you're looking more like 25-30% price hikes which correspond to the 25-30% wage cost hike. Wage hikes lead to price hikes that have ripple effects in more places. Landlords see that people are, on average, making more money so they raise their rents. Higher rents means more gentrification. Do we really want to become San Francisco or New York?

The quality of life in Seattle is pretty great compared to these over priced metropolises, IMHO, and I would hate to see Seattle become a place where the workers who support, and are themselves the culture of this place can't live here because $750/month for a 100sf Seattle efficiency apartment is a shitty way to live, so they leave and take their culture with them, just leaving the high-paid tech assholes (like myself) the only people who can afford to stay in Seattle. And even high-paid tech assholes like myself would probably go out less because even to us a 25-30% price hike on already overpriced Seattle prices on beer, food and the such is a sting we would feel.
49
@45, "Firstly, there is not support for getting rid of tips altogether," - madcap

That's true, but his point was not (if I understood it) that there's an attempt for "getting rid of tips altogether", but that BECAUSE of this rash, illogical and damaging rise in wages, one of the only tools that businesses will have to STAY IN BUSINESS will be to add a service charge and use some of that income to pay some of their bills, a result which will be LESS money going to the servers while STILL raising the prices on the menus. That would be simply a survival attempt. So, I understand how this seems/sounds/read as odd, but any small businessperson will understand it in a moment. Yes, it sounds like a bunch of crap, but it's an honest reflection of what many will have to do to simply stay afloat. And, that's hospitality, what will the non-tip/commission-based businesses so, like the art or pet supply stores, the clothing stores, the manufacturing? They can't add a "service charge", so they will just have to raise their rates and hope to stay competitive.

"Unscientific surveys to the contrary, there is no reason to believe that people will stop tipping because of a minimum wage increase."

Again, very true, but the same "Unscientific surveys" (or, comments here as evidence) shows that if people in restaurants are paid $15hr., AND there's a service fee, tipping would be marginalized or ended for many people.

As I have stated many times, my bare numbers show that I would have to raise my prices by 25% just to stay in biz and make hopefully a few % above my costs. So, every business would do something different. Some would increase costs, some would add a service fee, some would do a combination and many would just up and close.

"Many restaurants already do this for large parties"

Sure, but that fellow's point was that the money for that service fee won't all go to the server. It'll in part have to go to help pay for the 20+% increase in costs... So, how much will the servers/bartenders get? Tough to say. That'd depend on each individual business, I suppose. Those with deeper pockets would give more to the servers and those with less competitive advantage would give less. That seems natural.

"If you're a tipped employee who makes a decent wage, there's no reason to believe that you won't continue to do so if it's a service fee on the check."

Didja catch the part where he says that he made $28/hr.? That will be a number of the past if this goes into action. There's NO WAY that on top of their $15/hr., they'll get ANOTHER $13+ if the business has to use that service feel to pay some of their bills (including, of course, payroll). So, you are making an argument for a LESSENING of income. That's the point that we're all trying to make. $15/hr. is LESS than most service-people make.

"Work for another restaurant where the management aren't assholes trying to cut into your wages. "

See, that's the kind of statement that's really sad to see when someone simply does not know enough about the subject to opine with any intelligence. In fact, it's ironical, because you're purporting to 'solve' the problem but you don't have enough info to know that you're actually working AGAINST your own logic.

Again, because prices will RISE, perhaps 20%+, some or much of this service fee will have to go to balance out the rising costs for the business, which I have estimated to be NO LESS than 25%. For me, that'd be for JUST payroll, more than $100K/yr. And, then I have to add on the increase in costs from my purveyors, which I estimate will be another $60K or so... And, I run a small biz., what about the larger ones? At least they have a competitive advantage, but that does not mean that they are out of the woods, at all.

But, you're right, employees would move around to the larger busiensses that could stomach and take the hit in their bottom line. Like the larger chains...do you recognize that's what you just stated? The small guys lose their best employees, which will be a compounding issue to the already-serious cost disadvantage that they'll be under...so now you want those "assholes" to lose their best employees because the larger chains can afford to let them keep more of their tips/service charges? Wow. That's just so...crazy.

50
Thank you, ahoogen. Your take on this is obviously correct.

The sad fact is that none of these people will believe you. To do so, they'd have to go against their inset bias and be forced to a) learn about the issue, and then b) speak out against their bias if they were honest.

Seriously, I feel like offering a Biz Economics 101 class just so people can understand the most basic issues related to how this seemingly-simple rise in MW will have such a cascading negative effect.
51
@47 Sock Puppet? I'm not sure what you mean by this, but if you've ever worked in the restaurant industry at all, bar managers are also bartenders who earn tips 99% of the time. And I still make more in tips than my salary.
52
I posted the same comment on another thread, but it bears repeating here:

I am a tipped employee and have been for the past 14 years. This is my career, not a "job." I work hard and I get paid very well. Over the past 14 years, I have averaged $28/hr. I am not someone who needs saving with an increase to minimum wage.

There are some fears over people tipping less due to a raise in the minimum wage without including a tip credit. But bigger fear comes from what businesses have to do to adapt to such a large minimum wage increase. Most restaurants and bars try to operate with a 5-8% net profit, if you built a business that makes more, good for you, but many fall short of this goal. Labor is a restaurant/bar's biggest expense, and without making large changes to the operations of a business, nearly all of them would close.

So what are the possible changes? A price increase is inevitable, likely 20%. Another possibility is that the business has a service charge added to every bill instead of a tip. The business can then use that service charge to supplement the increase in payroll, with leaving some left over as a tip. This effectively cuts our tip pool from 20% down to likely 10%. We care about the businesses we work for and don't want them to have to close, or make drastic changes that would end up slashing our pay by more than 25%

I'm all for an increase in minimum wage, but without considering total compensation, it's a threat to my entire industry.
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Sorry, I accidentally repeated a comment here meant for another thread
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