Local business community weighs whether $15 minimum wage would help or hurt restaurants

 

SALISBURY, Md. – $15 an hour minimum wage has been a hot button topic across the nation for years now. With President Joe Biden now in office, that “if” is looking more like a “when”. The local business and restaurant community tells 47ABC it could drastically decrease pay for tipped restaurant workers.

President and CEO of the Salisbury Area Chamber of Commerce Bill Chambers says President Biden’s Raise the Wage Act could also be the final nail in the coffin for restaurant owners amid the COVID-19 pandemic. “At a time when this industry can least afford to have any new regulations or expenses piled on them, this is really bad timing at best. It’s ignorance at its worst,” said Chambers.

The act would raise the federal minimum wage to $15 an hour by 2025, and eliminate tipped wages by the end of the 2020’s. Owner of Roadie Joe’s Jeremy Norton says that’s a far cry from the current tipped minimum wage. “Right now the current wage for a server, which a lot of people probably don’t know, is only $3.63 per hour in Maryland,” said Norton.

Currently, Maryland’s tipped restaurant workers make up that gap between the $3.63 an hour and minimum wage by earning tips throughout their shift. But if they’re having a shift where the tips just aren’t flowing, that’s when the restaurant steps in to make sure they’re making at least minimum wage. “The very people this is intended to assist will actually, in some cases, not have a job. In many other cases they’ll be making less money,” said Chambers.

Norton says if the act is approved, workers’ pay could be dramatically increased. “The good employees know that on a Friday night they can make $300. Now they’re working a five hour shift and only making $60 instead. That’s tough,” said Norton.

Chambers says it doesn’t just stop with the individual workers. Restaurant owners would be left with paying their employees even more and the payroll tax that comes along with it. He says this would all be happening while operating on often razor thin margins. “You would see in full service restaurants entree prices rise dramatically. They have to cover their costs somehow,” said Chambers.

Chambers says the consequences most likely wouldn’t end with increased menu prices. “The bottom line is there’s some establishments – many as a matter of fact – that won’t raise their prices. They’ll just cease to exist,” said Chambers.

But Norton says the Raise the Wage Act might not be all doom and gloom. Norton points out that most other countries in the world don’t operate on a tipped wage system, and their restaurant industries are doing just fine. “It’ll be a shock at first, but eventually it’ll all level itself out. It has to,” said Norton.

Norton adds that while it make some getting used to, the minimum wage hike could even improve business for some restaurants. “There will be restaurants that close over it, and there will be restaurants that actually will probably do better because of it,” said Norton.

Back on Capitol Hill, many Republican members of Congress have said they oppose raising the minimum wage. But Democrats could use a process that’s called budget reconciliation to increase minimum wage federally.

Categories: Local News, Maryland, Money