One of the left’s favorite mantras is that government regulations and special interest groups provide the only ways that workers can get ahead. This notion was on display at a congressional briefing held on February 13 by the labor advocacy group Restaurant Opportunities Centers United (ROC).
At ROC’s briefing, “Gender Equality in the Restaurant Industry,” speakers equated the tipped minimum wage — the base a restaurant must pay its workers before the employee receives cash tips — with gender discrimination, as 66 percent of tipped workers are women.
What is ROC’s angle? First, to further its political agenda by helping Rep. Donna Edwards, the keynote speaker at the briefing, push her bill. The tortuously named Working for Adequate Gains for Employment in Services (WAGES) Act (H.R. 631) would raise the national minimum wage for tipped workers from $2.13 an hour to $5.50 an hour within two years. The second is to help ROC push discrimination claims against restaurants it is trying to target.
The law already stipulates that if tips do not equal the federal minimum wage, the employer must make up the difference. Therefore, it is illegal for waitresses to earn less than $7.25 an hour, despite the grim picture Edwards and ROC attempt to portray.
This argument relies heavily on the myth that there is no upward mobility in the industry and tips never increase. The speakers continually attempted to drive home the point that “tipped workers [read women, who are more likely to work for tips] haven’t received a raise in 20 years.”
This “found” discrimination will no doubt be used by ROC against the restaurants it is trying to target. According to Crain’s New York a ROC attack “often includes noisy and prolonged protests outside the eatery. Settling is often the less expensive option for restaurateurs mindful of their brand’s image and the cost of a long court fight.”
ROC conducts harassment campaigns (better known as corporate campaigns when used by unions) — which include picketing, media attacks, and lawsuits — against targeted restaurants, hoping to threaten their business to the point that they capitulate. The pressure tactics are calculated to drive away customers, the very customers on whom restaurant employees (including women) depend for tips and income.
Edwards recently published an op-ed in The Hill, which lamented Congress’s failure to increase the tipped minimum wage, saying, “This missed opportunity to address the tipped minimum wage has ultimately disproportionately affected women.”
This line of reasoning has numerous flaws. It assumes that workers are never promoted and that tips never increase. The cost of dining out in 1992 was less than and the cost of going to a restaurant today. Tips are a percentage of the bill, so workers who rely on tips do take home more in today than they did 20 years ago.
However, like increases in the regular minimum wage, an increase in the tipped minimum wage would hurt the very workers it is supposed to help. The implementation of a higher tipped minimum wage will also disproportionately increase unemployment and restrict entry into the job market for women. As Heritage Foundation labor economist James Sherk notes, “Most studies find that, when the minimum wage goes up, employment goes down. A higher minimum wage places many unskilled and inexperienced workers out of the job market.”
Proponents of increasing the tipped minimum wage rely on the false assumption that workers who start by waiting tables or doing entry level jobs never move up. Probably without realizing the holes they were creating in their own argument, two of the keynote speakers destroyed this line of reasoning. Both Rep. Edwards and restaurant owner Barbra Sibley recalled their days waiting tables when they were younger. Sibley told of how she worked in almost every aspect of the industry before eventually owning a Mexican Restaurant in New York, telling the crowd, “I have never forgotten what it was like to start at the bottom.” [Emphasis added]
That’s right. Of the two women who attempted to argue that women’s wages in the industry are static after they both started in the industry, one now sits in Congress and the other owns a restaurant.
Another reason for skepticism regarding ROC’s claims is that its attacks have made it a lot of money. ROC has obtained millions from settlements it has reached with targeted restaurants. As Crain’s reports, “ROC NY [ROC’s New York Chapter] has made its mark in the city by targeting high-profile restaurateurs…. The group has won nine campaigns in all, securing $5 million in settlements from restaurants accused of sexual harassment, wage and hour violations, and discrimination.”
Rep. Edwards’s legislative initiatives and ROC’s tenuously legal tactics would cause for women working as waitresses more harm than good. Not only will raising the tipped minimum wage increase unemployment, ROC’s tactics destroy jobs by chasing away customers and imposing burdens on job creators.