Congress<\/a>\u00a0not to include a $15 minimum wage measure in the American Rescue Plan.<\/p>\nRoark Capital has warned its investors that its portfolio companies could be “adversely affected by changes in governmental policies,” including the minimum wage. The firm’s managing director serves on the National Restaurant Association’s board, according to his firm bio.<\/p>\n
But a top executive at the Cheesecake Factory told investors in February that raising the minimum wage would not cause problems for the company.<\/p>\n
“Labor input is just a cost input,” said Matt Clark, Cheesecake Factory’s chief financial officer. “And you can try to put some technology around it to improve efficiency and such. But at the end of the day, most competition prices for it. And I think that’s the necessity to maintain margin structures that are competitive and attractive for continued investment.”<\/p>\n
Clark added that a wage hike could affect some of the company’s competitors, and “ultimately the stronger survive and take market share.”<\/p>\n
The comments were hardly anomalous: over the last two months of earnings seasons, top executives from DiamondRock Hospitality, Kroger, HCA Healthcare, Hilton, and Six Flags all downplayed the negative effects of a prospective minimum wage increase, and some have argued it would boost consumer spending. The statements from leaders across various service industry sectors undercut corporate lobbying groups in Washington that have pretended such a wage increase would destroy the economy.<\/p>\n
“Many including me are supportive over time that the minimum wage needs to move up,” said Hilton CEO Chris Nassetta in a February earnings call. “I think we should all assume that the minimum wage is going to be going up over time. In fact, because it needs to.”<\/p>\n
“To the extent that there is minimum wage increases in certain of our demographics where we operate, that has got a halo effect on the revenue side,” said Six Flags chief financial officer Sandeep Reddy during a February earnings call, in response to a question about whether a higher wage helps boost spending at its parks.<\/p>\n
Six Flags’ CEO Michael Spanos added: “We’re roughly half teens and young adults and roughly half families and children. And to Sandeep’s point, we think it absolutely helps in that regard, putting more money in their pockets.”<\/p>\n\n \n \n
\n “We Don’t Really See an Impact to Tips”<\/h2>\n \n
The federal minimum wage for jobs that rely on tips, such as restaurant servers, is currently $2.13, although most states require companies to pay more than that. The Raise the Wage Act would phase out this subminimum wage by 2025, and then companies will have to pay tipped workers the federal minimum wage.<\/p>\n
A recent study from the Center for American Progress found that workers who are paid the $2.13 federal tipped minimum wage are more likely to live in poverty than tipped workers in states that have eliminated the subminimum wage for such workers.<\/p>\n
Last summer, the advocacy group One Fair Wage wrote that the subminimum wage was becoming an even bigger problem during the COVID-19 pandemic. “In numerous states around the country, restaurant workers are reporting that tips are down 50-70 percent,” they wrote.<\/p>\n
Nevertheless, the restaurant industry has often tried to argue that ending the tipped wage will be bad for workers and ultimately reduce the amount of money they make. The argument is that customers won’t tip as generously if restaurants are forced to raise their prices, or because customers won’t feel like restaurant workers need their money as desperately as they do now.<\/p>\n
The National Restaurant Association, for example, wrote in a press release in January: “The elimination of the tip credit will cut the take-home wages of thousands of tipped employees who make far above the proposed minimum hourly wage.”<\/p>\n
There is no evidence that workers are tipped less in states that have eliminated the minimum wage. In February, a top executive at the steakhouse chain Texas Roadhouse said on an earnings call that the company’s employees haven’t been losing out on tip money in states like California and Minnesota, where there’s no subminimum wage for tipped workers, or in Colorado and Arizona where tipped workers must be paid more than $9 an hour.<\/p>\n
“We don’t really see an impact to tips for those servers in those higher-wage states,” said Tonya Robinson, Texas Roadhouse’s chief financial officer. “They continue to get [tipped] well, and their overall average wage is pretty high.”<\/p>\n\n \n \n \n\n \n
\n You can subscribe to David Sirota\u2019s investigative journalism project, the\u00a0Daily Poster<\/em>,\u00a0here<\/a>.<\/p>\n\n\n\nThis post was originally published on Jacobin<\/a>. <\/p>","protected":false},"excerpt":{"rendered":"Big restaurant chains are telling investors that a national minimum wage hike wouldn\u2019t be a big deal \u2014 even as their corporate lobbying groups in Washington fight plans for a $15 minimum wage. \u201cWe share your view that a national discussion on wage issues for working Americans is needed \u2014 but the Raise the Wage [\u2026]<\/p>\n","protected":false},"author":1641,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"_links":{"self":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/107787"}],"collection":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/users\/1641"}],"replies":[{"embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/comments?post=107787"}],"version-history":[{"count":2,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/107787\/revisions"}],"predecessor-version":[{"id":108193,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/posts\/107787\/revisions\/108193"}],"wp:attachment":[{"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/media?parent=107787"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/categories?post=107787"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/radiofree.asia\/wp-json\/wp\/v2\/tags?post=107787"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}