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A Minimum Wage Bump Isn’t off the Table

Published

2 years ago

March 29, 2021

fast food workers and their supporters marched along 8th Ave calling for an increase in the minimum wage-minimum wage bump-ss-featured

The minimum wage bump didn't make it into the coronavirus relief package that President Joe Biden signed into law on March 11, but Democratic lawmakers are unlikely to drop the issue.

The contentious piece of legislation would have gradually raised the federal minimum wage to $15 an hour and phased out subminimum wages for tipped workers.

Why Arizona restaurant leaders clash on the issue

It failed in the Senate earlier this month. Democratic Sens. Mark Kelly and Kyrsten Sinema of Arizona split on their votes, with Sinema giving the minimum wage increase a resounding thumbs-down.

Sinema released a statement saying in part that the “Senate should hold an open debate and amendment process on raising the minimum wage, separate from the COVID-focused reconciliation bill.”

Independent Sen. Bernie Sanders of Vermont, who introduced the legislation, indicated to CNN's Anderson Cooper it won't be the last time Congress votes on the bill. But Arizonans aren't in agreement with how the potential minimum wage increase could impact restaurant industry workers.

What's the minimum wage in Arizona right now?

At $12.15 an hour, Arizona's minimum wage is already among the highest of the 50 states.

Arizona's minimum wage got a modest increase of 15 cents on Jan. 1 and has already risen four times in the last four years. In 2016, voters passed Proposition 206, a statewide ballot measure that increased Arizona's minimum wage:

From $8.05 an hour to $10 in 2017.
To $10.50 in 2018.
To $11 in 2019.
To $12 in 2020.

But employers may pay servers and other tipped workers, such as baristas and bartenders, up to $3 an hour less than the minimum wage. If tips don't bring those workers up to minimum wage, then employers are required to pay the difference.

Kinder diners: How to be a better restaurant customer during COVID-19

The Raise the Wage Act of 2021, which did not pass with the COVID-19 relief package, would have increased the federal minimum wage to $15 by 2025.

It also would gradually phase out the subminimum wage for tipped workers, requiring employers to pay all workers at least $15 an hour by 2027. This includes youth workers and workers with disabilities who currently make a subminimum wage.

These Phoenix restaurants already got rid of tipping

At least two Phoenix restaurants have already gotten rid of the concept of tipped wages for servers. While it's not common in Phoenix, restaurant owners say it brings more pay equity among workers.

Jessica Bueno, co-owner of Xanadu Coffee Co. in Phoenix, attended a February rally in support of raising the minimum wage. Xanadu has multiple revenue streams, as a wholesale coffee roaster and coffee shop. It's also a co-op with partners including Mythical Coffee in Gilbert and AT Oasis in Phoenix.

Bueno told The Arizona Republic in February that her coffee shop already pays baristas a starting wage of $15 an hour.

“I really value our employees and I value the skill sets that hospitality workers have, and I think it's time we start paying them and respecting them, especially during this pandemic,” Bueno said.

The coffee shop has a no-tipping policy and the owners believe pay distribution should be their responsibility, not their customers.

A blog post on the coffee company's website explained that the tipping system “creates a weird seniority dynamic where the ‘old guard’ always has the best tipping shifts and the newer employees have to be grandfathered into better tipping shifts.”

Chef Christopher Gross said he wants to close the wage gap between servers and back-of-house workers, such as dishwashers and cooks. His fine-dining restaurant Christopher's at the Wrigley Mansion opened on March 23 and does not have a traditional tipping system.

The intimate restaurant will offer eight-course tasting menus. Gross said he's trained his cooks to double as servers, learning to present dishes and suggest wine pairings to guests.

“It’s always been young people wanting to become a chef, the pay is generally terrible when they take their first position,” Gross said. “Cooks don’t get paid well compared to the service side of the house. You’ll see a server having an excellent night take home $200 to $300 while a cook gets paid $15 an hour.”

He said he pays his cooks “well over” $15 and that the cost of the wages is built into the food prices. After a certain period of time, workers will be eligible for 401(k) and health benefits, Gross added.

Diners do have the option of leaving a “Team Appreciation” amount, but unlike a tip, that money will be divided evenly among all non-salaried workers, Gross said.

‘It will be a shock for the public'

The topic of a minimum wage has divided the restaurant industry, however. In an op-ed for The Republic, Stephanie McQuaid, a server at White Chocolate Grill in Scottsdale, wrote that eliminating tipped wages would result in a net loss for tipped workers and “jeopardizes that dynamic” between server and customer.

“It will remove servers’ incentive to build relationships by taking our earning potential out of our own hands,” McQuaid wrote.

Pat Christofolo, owner of The Farm at South Mountain and other restaurants, said it will be difficult to change people's perception of tipping culture and food prices.

“It will be a shock for the public,” she said. “It’s very hard for an American who’s used to tipping to not tip. They feel like they’re being cheap.”

If a meal has a price tag of $100, people don't see it as a $120 meal because of added gratuity, she explained. Customers might balk if a meal itself is priced at $120, though. Plus, customers could end up paying slightly more overall because sales tax is only levied on the price of food, not tips.

Restaurants already operate on slim margins and costs would go up across the board, Christofolo said.

“Every provider you have, from linen to paper goods to food, has costs,” she said. “Every single vendor is affected. It just makes it tough. The amount of money we have to increase to get our product to the end consumer, it’s just going to get a little crazy.”

Reach the reporter at [email protected]. Follow @priscillatotiya on Twitter and Instagram.

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Article Source: AZCentral