Guest MINDSETTER™ Joseph Fortune: Industry Leaders Want Their Golden Goose

Monday, March 09, 2015

Guest MINDSETTER™ Joseph Fortune

 

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On Friday, John Elkhay wrote an opinion piece in opposition to legislation in the Rhode Island General Assembly that would raise the state’s subminimum wage for tipped workers for the first time in nearly 20 years. He titled the piece, “RI is the State that Wants to Kill the Golden Goose.” 

As a longtime restaurant server who knows firsthand what it is like to survive on a base wage of $2.89 per hour, I would argue that the only “Golden Goose” that stands to be killed by this legislation is the remarkable rule that allows restaurant owners like Mr. Elkhay to employ full-time staff at basically no cost to himself.

Think about it: what other industry in the entire world operates by having you, the consumer, pay the entirety of its workers’ wages? Of course Mr. Elkay opposes legislation to raise the state’s tipped minimum wage; for the last 20 years he’s benefited from an incredible deal. But while this two-tiered wage system may be a “Golden Goose” for certain restaurateurs like Mr. Elkay, it’s a terrible deal for the 22,000 tipped workers in Rhode Island.

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I understand what it means to live entirely off of tips because I have been working in the restaurant industry at the $2.89 minimum wage for 10 years now, most recently at Ruth’s Chris Steak House. This life is difficult and unstable. While a server can sometimes luck out and have a great Friday or Saturday night - and those are the nights that people like Mr. Elkhay point to when they claim that tipped workers are living the high life - this is not the norm. In fact, according to the most recent report by the Bureau of Labor Statistics, the average hourly wage for tipped workers in Rhode Island (including gratuities) is $8.90, and tipped workers are twice as likely to be on food stamps as non-tipped workers. Even at higher-end places like Ruth’s Chris Steakhouse, servers have to work multiple slow shifts for every good shift. During my years waiting tables, it would not be uncommon to come in on a slow day, spend hours on my feet, and leave with barely enough earnings to cover my gas to and from work.

This system also creates opportunities for abuse. Because tipped workers’ pay is so connected to our shift schedule, we are vulnerable to exploitation from managers. For example, instead of paying someone the regular minimum wage to clean the restaurant, a manager might order some servers to stay late and clean all the tables (even though that should not qualify as “tipped” work). The servers could speak up, or file a complaint with the Department of Labor. But that will guarantee their manager never gives them a good shift again, and without a good shift they have nothing. So generally tipped workers stay quiet and take the abuse.

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But it does not need to be this way. Raising the subminimum wage would provide much needed security to thousands of Rhode Islanders. And here’s the kicker: despite self-interested claims to the contrary by folks like Mr. Elkhay and the Rhode Island Hospitality Association (the lobbying group for the state’s big restaurant and hotel companies), research and experience show that raising the subminimum wage has no negative impact on jobs or growth in the restaurant industry. All we need to do is look at the states surrounding us.

At $2.89, Rhode Island has the lowest subminimum wage in all of New England. Connecticut’s tipped minimum wage is $5.69 for servers and $7.39 for bartenders, and the Connecticut legislature is considering raising it further. New York State recently raised their tipped minimum wage to $7.50. And seven states across the country - including California, Oregon, Washington, Minnesota, Montana, Nevada, and Alaska - have completely eliminated their subminimum wage. Those states have thriving restaurant industries with expected growth rates and tipping rates that are higher than the average subminimum wage state. They also, unsurprisingly, have lower poverty rates for their tipped workers. If restaurateurs in these states can survive and thrive while honestly paying their employees for an honest day’s work, I don’t see why restaurateurs in Rhode Island can’t, as well.

In fact, raising the tipped minimum wage would have an important stimulative effect for our state as a whole. I know every dollar I earn goes back into the Rhode Island economy, whether it’s helping me pay my bills or keeping food from the local store on the table. If my wage goes up, I will earn more and can spend more, which keeps me afloat while helping Rhode Island businesses. Indeed, an analysis by the Restaurant Opportunities Center found that the wage proposal currently in the General Assembly would add over $64 million to the local economy. It would also likely increase state income tax revenue and reduce the number of tipped workers who are forced to rely on government assistance (many of the staff who serve your meals cannot afford food for their own families, which is why tipped workers in Rhode Island receive $638,325 in food stamps every month).

Over the coming weeks, I am sure we will hear more dramatic claims from Mr. Elkhay and the Hospitality Association. Which is why I think it is significant that Mr. Elkhay’s opinion piece last week coincided with the 10 year anniversary of Rhode Island’s indoor smoking ban. The truth is, his arguments against raising the tipped minimum wage are exactly the same as those the Hospitality Association made against this legislation a decade ago. “Restaurants have such thin margins that they will not be able to absorb the change,” they said. “The smoking ban will decimate our state’s hospitality industry,” they declared. Of course, this fear mongering turned out to be false. Restaurants adapted, the industry continued to thrive, and countless Rhode Islanders were protected from the toxic effects of secondhand smoke.

Today, we face a similar crossroads. Will Rhode Island choose to be on the right side of history and offer some of its lowest-paid workers their first guaranteed raise in 20 years? Or will we continue to bow and scrape to well-connected industry leaders that want to hold on to their “Golden Goose” - the right to not pay their employees - for as long as possible?

Here’s hoping.


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Joseph Fortune is a Providence resident, musician and a longtime restaurant worker.

 

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