Catalyzed by efforts from leftists, including actresses Jane Fonda and Lily Tomlin, to raise the minimum wage but in the process eliminate the tip credit, some full-service restaurant workers have struck back, announcing the creation of Restaurant Workers of America (RWA), which is devoted to preserving restaurant servers’ tip income.
The creation of RWA was triggered in 2017 when thousands of restaurant servers organized in Maine to restore the state’s tip credit after it had been terminated as part of a minimum wage ballot measure. RWA is battling an organization called the Restaurant Opportunities Center, which wants to eliminate tipping.
AS RWA explains on their website:
Federal law and most states allow tipped workers to be paid a lower minimum wage, as long as they earn at least the full minimum wage when tips are included. (The difference between the tipped wage and the full minimum wage is called the “tip credit.”) Service workers are guaranteed to earn at least the minimum wage per hour during any pay period; if tips plus the tipped wage does not equal at least the current minimum wage, then businesses are legally required to make up that amount. With the current model, most servers and bartenders make well above the minimum wage when their tips are included. – READ MORE
[divider][/divider]The CEO of fast-food restaurant Jack in the Box said “it just makes sense” to replace cashiers with robots due to the minimum wage increase in California.
“As we see the rising costs of labor, it just makes sense” to swap cashiers with kiosks where customers can order their food themselves, CEO Leonard Comma said Tuesday at the ICR Conference in Orlando, Fla., Business Insider reported.
However, Comma said that while his fast-food restaurant has tested products with technological advances at their establishments, he has decided to not go forward with the kiosks.
California, where Jack in the Box is based, will raise its minimum wage to $11 in 2018 and again in 2023 to $15. California and 18 other states have proposed to raise their respective minimum wages, Grub Street reported. – READ MORE
[divider][/divider]On Monday, the national restaurant chain Red Robin announced it would eliminate busboys at all of its 570 restaurants, as the company expects it will save $8 million in 2018 by doing so. Red Robin’s chief financial officer Guy Constant told attendees at the ICR retail conference, “We need to do that to address the labor increases we’ve seen.”
Michael Saltsman, director of the Employment Policies Institute (EPI), told FOX Business, “I read that as minimum wage. Somebody like Red Robin, which has a lot of exposure in western states [where the minimum wage is rising faster] … this is sort of a burger and beer chain. If they can’t pass those increases off in higher prices … they have to find a way to do more with less.”
851Franchise.com editor-in-chief Nick Powills added, “From a business standpoint, [Red Robin made a] very smart move. From an employee standpoint, you just cut out $8 million worth of labor. The interesting thing about the minimum wage hike is that those that made the decisions to do it, did it on behalf of the employee … when intentions are good, and you can’t appease everybody, someone is going to eventually be on the short [end of the] stick.” – READ MORE
[divider][/divider]On January 1, the Canadian province of Ontario raised its minimum wage from $11.60/hour to $14/hour. How are businesses responding? Probably exactly how you would expect.
According to the Bank of Canada, because of the forced wage hike there will be an estimated 60,000 fewer jobs available in Ontario by 2019. Not just that, businesses are beginning to do what businesses do: react to changes in the market. Both Pizza Hut and Subway — to name a few — notified their customers that prices would increase as a result of the minimum wage hike
According to Aaron Aerts and Laura Jones of the Canadian Federation of Independent Business, “The negative impacts will ripple throughout the economy: layoffs, reduced hours and fewer opportunities for young workers; higher prices for consumers; increased automation; and reduced investment. Pretending these impacts don’t exist is fa-la-la-la-la economics.” – READ MORE
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