Restaurant Hospitality: What would a $15 per hour federal minimum wage look like for restaurants?

By Joanna Fantozzi
Restaurant Hospitality, Feb 5, 2021

... It was a campaign promise by President Joe Biden, who proposed slowly doubling the current federal minimum wage of $7.25 per hour to $15 by 2025. And it’s a move that has gained increasing support. Eight states are already in the process of phasing in a $15 per hour minimum wage — including most recently the conservative state of Florida — and it’s already in place in Washington, D.C. ... Here are some arguments for and against the increase to a $15 per hour minimum wage — and the proposed elimination of the tip credit — from analysts, legal experts, and operators.

... Pro: Reducing employee turnover ...

Adam Orman, who opened L’Oca d’Oro, an Italian neighborhood restaurant in Austin, Texas, in 2016 with his business partner, started paying $15 an hour once the pandemic hit. The restaurant’s dining room closed in March and has been open to off-premise dining-only since then.

“Less turnover saves money and is better for morale,” Orman said, adding that his full-time staff also receives paid time off and medical benefits. “You create relationships with your guests that are priceless, and everyone likes working for a staff that’s like family. If everyone has healthcare and no one has to come to work sick and people can afford to live, it’s just better.”

Orman noted as a point of pride that since 2017, he has not had a single employee on the service side leave to work for another restaurant.

... Pro: Labor costs aren’t too high

“People like to say, ‘If you can’t afford to pay your employees more than $2 an hour than you shouldn’t be in business,’ but that’s not my response,” Orman of L’Oca d’Oro said. “My response is if your entire industry can’t afford to pay more than $2 an hour [for tipped employees], then maybe there’s something wrong with the industry.” ...

“We’re telling people this salad costs X amount more than the restaurant down the block because it’s organic and we know where it comes from,” Orman said. “But we’re working in the wrong direction. We can’t tell people ‘your bill is more because I’m paying my workers a living wage.’” ...

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Copyright 2021 Informa

 

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